How Do You Become a Home Owner?
How Do You Become a Home Owner? – HOW DO YOU BECOME A HOME OWNER?
Title deed
If you would like to buy a home you can either look in the property sections of the newspapers or view houses that are on show. You will usually have to talk to an estate agent who is helping the owner to sell the home, and who is acting on behalf of the owner. These houses could be existing houses in existing suburbs or they could be new houses in new developments. Sometimes, when you buy a new house in a new development, you will only be shown a show house and the plans of the house, because the house has not been built yet – this is called buying ‘off plan’. See Also: DPSA Circular <<Apply Now
When you have decided on the home that you want and agreed to the selling price, you sign a Deed of Sale, which is a legal contract between you and the seller for the purchase of the home.
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When you buy a home in suburbs that fall under the control of a municipality, ownership of the home is when the title is transferred into your name (i.e. you have full title). Once you/your financial institution have paid the price to the seller the title will be transferred to your name. A special lawyer, called a conveyancer, will ‘carry across’ the title by getting you to sign the necessary documents and lodging them at the Deeds Office where the registrar of deeds will formally register the property in your name. If you have a mortgage loan the bank’s claim to your property will be written into the title deed.
Instalment sale agreement
In some cases, for instance in inner cities in high rise buildings, the owner or developer will sell to you by means of an instalment sale. You will not have full title until you have paid off the last instalment. You sign an instalment sale agreement, which is a legal contract between you and the seller of the home.
Permission to Occupy (PTO)
If you want to own a home on land under the control of a traditional leader you will first have to get his permission. The procedure might be different in different parts of the country – you will have to enquire with your traditional leader what the procedure is. For instance in KwaZulu-Natal, the traditional leaders will give you the following documents to indicate that you have their permission to occupy land:
- Recommendation from traditional leader to the KZN Department of Traditional and Local Government Affairs for issuing of permission to occupy certificate.
- Site Inspection Certificate.
- Sketch of the site.
You must submit these documents to the KwaZulu-Natal Department of Traditional and Local Government Affairs in Ulundi, who will then issue a Permission to Occupy (PTO). The PTO proves that you ‘own’ the land in the traditional area.
Therefore, in order to become a home owner you must either
- Have your name on the title deed of the home; or
- Sign an instalment sale agreement with the seller; or
- Get a Permission to Occupy certificate from the Provincial Government of the province where you have your traditional home
You will then be able to show that you are a home owner and that you qualify for the housing allowance.
State Guarantee
When purchasing a home one is required to pay a cash deposit, monies that one does not necessarily have. To this end you could access the State Guarantee Scheme, which seeks to promote home ownership by obtaining a 100% home loan/bond. In this case the State (Minister of Finance) guarantees maximum 20% of your loan/bond. Such a guarantee is only issued to financial institutions that have agreements with the State.
Note: It is not a pre-requisite to obtain a State Guarantee to secure a bond/home loan. You could secure a bond without a State Guarantee
There are however certain rules that should be complied with, e.g.:
- The loan should be used to buy or build a dwelling or to effect immovable improvements.
- You should be-
1. a contributing member of pension fund; and
2. 21 years of age with one year’s service, but if you are older than 55 years of age you must have at least 10 year’s pensionable service. - The property must be permanently occupied by yourself, your spouse, dependent children and other dependants (if applicable).
The guarantee is redeemable in the event when you resign from the Public Service, pass away or become insolvent. In the case of resignation you are indebted with the balance of the guarantee. This amount is usually deducted from the pension monies you receive at resignation. If insufficient it is recovered directly from you. In the case of death, a claim will be lodged against your estate. Should you for some reason become insolvent, your department should determine the outstanding balance of the guarantee, which must be redeemed with the financial institution. It might happen that your property could be sold in execution to cover the debt.
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Please consult your personnel office should you enquire further detailed information on the State Guarantee and procedures to apply for a guarantee.
Rates, Electricity and Water Accounts
When you move into your home you will, as a property owner, have to pay rates to the municipality. You will also have to pay the municipality for the electricity and water that you use on the property – unless you are using a pre-paid meter for the electricity, in which case you will only pay a once off fee and then each time that you buy electricity with your pre-paid card. The municipality will send you an account every month for the rates, and also for the electricity and water consumed.
If you have bought an apartment in a high-rise inner city building the ownership of this unit will be subject to a sectional title scheme. If you live in a sectional title scheme, the body corporate will send you an account each month to pay your electricity and water as well as a levy – this levy includes rates owed to the council.
Depending on the procedures in different parts of the country you may have to pay a fee to the traditional leader for the land you are occupying.
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