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<< ASK THE EXPERT

Legal rights for liquidated property development I

s a purchaser bound to pay for a property if the developer is liquidated?

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o answer this question it must be established at what stage the development is at the time of liquidation. If the land is not yet registrable Section 26 of the Alienation of Land Act 1981 prohibits a seller (developer) from receiving any payment until the property is capable of being registered. There are however two exceptions. Firstly, a purchaser can pay the purchase price to an attorney or an estate agent who

Nicola Strydom, Seeff Tzaneen

must retain the moneys in his trust account until the property becomes registrable. Secondly, if the purchaser is given an irrevocable and unconditional guarantee by a registered bank or insurer in terms of which the bank or insurer undertakes to repay the amount paid by the

purchaser if the property is not registrable. Should the seller become insolvent, any amount the purchaser has paid to an attorney or an estate agent in trust, or which was guaranteed by a bank or insurer, is immediately repayable to the purchaser. The rights of the purchaser are therefore protected. If the land is registrable As a general rule, liquidation does terminate a contract. The trustee of the insolvent’s estate however has a choice to either repudiate or enforce the contract, whichever is more beneficial to the creditors. If the trustee repudiates the contract, the purchaser has a concurrent claim for any payments that he has made. He will share in the proceeds of the sale of the assets of the insolvent estate. If the trustee elects to enforce the contract, the purchaser will be liable to pay the purchase price against transfer of the property in his name. Chapter II of the Alienation of Land Act however provides that, if the purchase price is payable in two or more instalments over a period exceeding one year, the trustee does not have the choice whether to repudiate or enforce the contract. The purchaser must decide whether he wishes to enforce

Transferring a UK mortgage C an you transfer a UK mortgage to South Africa, in other words: take out a loan here and buy in SA?

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he short answer is no. I can’t see a UK bank being willing to mortgage a property in SA, except perhaps if it has an operation / branch in SA that would handle the whole transaction locally. An option might be to secure another type of loan in the UK – or perhaps take out a home loan on a UK property - and then bring the money into SA through the Reserve Bank in order to buy a property here outright. However to do that you will need to have funds in the UK to keep up the monthly repayments on your loan or you could risk losing the UK

JULY 2012

property and / or having a judgment taken against you for unpaid debt. So before you make any decisions about this, I would strongly recommend that you consult the international finance expert at your own bank.

the contract. If the purchaser proceeds with the contract, the trustee must transfer the property to the purchaser against payment of all amounts still owing by the purchaser. If the purchaser elects not to

enforce the contract, the trustee can sell the property and the purchaser is entitled to be compensated before any other creditor out of the proceeds of the sale of the property. The contract must however have

been registered in the Deeds office. If the contract was not registered, the purchaser is merely a concurrent creditor. Nicola Strydom Licensee: Seeff Tzaneen www.seeff.com

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Earlsfield Business Centre, 9 Lydden Road, London, SW18 4LT Tel: +44 (0) 208 875 2070| Fax: +44 (0) 207 160 9333 enquiries@qi-properties.co.uk | www.qi-properties.co.uk Robby Du Toit

www.sapropertymonthly.co.uk

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South African Property Monthly – July Issue  

Homeowners sell and opt to rent; SA house prices grew by 8.9% in June; Ask the Expert: Transferring a UK mortgage

South African Property Monthly – July Issue  

Homeowners sell and opt to rent; SA house prices grew by 8.9% in June; Ask the Expert: Transferring a UK mortgage

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