Legal Issues

What legal title in the stands upon which units will be built will be passed to purchasers?

All properties in the Crossways Farm Village residential development will be sold and transferred to the purchasers on freehold title.

Who will own the farm?

The HOA will let out the farming area under separate contract with a caveat that no debt or bond can be registered on the farm land.

Are there any restrictions based on owners selling their stands or units before the development is complete?

Yes, an owner may not sell his or her stand or unit without first giving CFV the first right of refusal to repurchase the stand or unit at market value. In addition, all purchasers must take transfer of an erf before it can be sold on.  All subsequent sales are subject to approval from the HOA, which will be given if there are no outstanding levies due. Re-sales can be done through the CFV sales office or accredited agents. No for sale signs will be allowed within the development.

What formalities are imposed by South African law in respect of the transfer of ownership of immovable property situated in South Africa?

Property ownership may be transferred to a South African national or to a non South African national by registration of the property in such person’s name at a Deeds Registry. The specific Deeds Registry at which the property is registered is determined on the basis of where the property is situated.

The title to the property is confirmed by means of a registered Deed of Transfer or Certificate of Registered Title.

What are the various methods of ownership of immovable property which apply within South Africa?

Individual ownership, co-ownership in undivided shares, corporate ownership (i.e. ownership where a corporate entity owns the property) and ownership as a partnership.

How will the ownership of immovable property held by a corporate body be transferred? What particular formalities are required?

The property can be transferred either by way of sale of the shares of the corporate body that owns the property or by way of selling the immovable property out of the corporate entity. Both these methods will require a formal registration of transfer of ownership and will therefore have to comply with all formalities relating to the registration of a transfer in terms of South African law. In addition, a clearance from the South African Revenue Service as well as the relevant local municipality will also be required prior to the property being transferred.

Can a trust be registered in South Africa?

Yes.

Can a trust registered outside South Africa own residential property in South Africa?

Yes. However, a foreign trust (i.e. a trust created outside South Africa) that wishes to buy immovable property in South Africa, must first register with the local Master of the High Court of South Africa, and the trustees of the trust must first obtain Letters of Authority from the local Master of the High Court before the deed of sale can be entered into for the purchase of the property and before such deed of sale can subsequently be registered in the trust’s name. CFV and its agents can assist with all these administrative requirements.

Which legal system will govern any contracts of sale concluded for the transfer of ownership of stands in the Crossways Farm Village?

South African law will apply and the court of competent jurisdiction is the High Court of the Republic of South Africa.

Can a foreign company become the owner of property in the Crossways Farm Village?

Yes. It is however important to note that the company will also have to register itself as an entity in South Africa and if the shares in the company are owned by a non-resident of South Africa, the company must, in addition, also appoint a public officer who is a South African resident. Again, CFV can assist foreign buyers with all the official administrative work regarding company registration.

Must a non-South African purchaser be personally present in South Africa to sign the documentation required to proceed with the registration of the transfer of the property and/or a mortgage bond?

The purchaser need not necessarily be personally present in South Africa to sign the documentation required to proceed with the registration of the transfer of the property and/or a mortgage bond, but there are strict formalities to be complied with in the event that the purchaser signs such documentation abroad (such as that the documentation can only be signed abroad before a Notary Public or at the South African Embassy).

As an alternative, a Special Power of Attorney authorising a local agent/family member/friend to sign all documentation on the purchaser’s behalf may be executed. However, as an agent cannot sign any affidavits on the purchaser’s behalf, the purchaser will still be required to sign certain documents at the offices of a Notary Public or at the South African Embassy. The conveyancing attorney attending to the registration of the purchaser’s property will explain the requirements in detail when the documentation is sent to the purchaser.

What are the broad terms of the sale agreements with regards to payment of the purchase price?

A 10% cash deposit is required to secure the purchaser’s stand.  This cash deposit is invested in the purchaser’s name in an Investec Bank Deposit Account under the control of the conveyancing attorneys. The deposit will earn interest until transfer of the stand into the purchaser’s name. The purchaser will have to provide certain Know Your Client information to Investec Bank for purposes of opening the interest bearing deposit account (a list of the information required will be available on the website) and it is recommended that the required information be obtained without delay.

When will the purchase price be paid to CFV?

Unless otherwise agreed, the balance of the purchase price is payable on transfer of the stand into the name of the purchaser.

When is the purchaser able to start building on his/her stand?

Building may commence as soon as the stand is transferred into the name of the purchaser. All services (such as water, electricity and sewer), roads and bridges applicable to the first phase of the residential component will be completed to the satisfaction of the municipality by the time transfer of the first stands take place.