Finance is offered in terms of the Alienation of Land Act 68 of 1981. The Act regulates the purchase of a property of which the purchase price is paid to the developer in instalments.
Should a purchaser wish to make use of this facility, an agreement is entered into which, apart from the details of the property and the other standard content of our normal agreement of sale, stipulates the way in which the purchase price is to be paid i.e. the deposit amount, monthly instalments, term of the agreement, interest charged etc. This agreement is lodged with the Deeds Office in terms of the Alienation of Land Act (ALA) which then secures the property in favour of the purchaser.
The property is transferred to the purchaser at the end of the term of the agreement or when the purchaser has paid off at least 50% of the purchase price.
There is probably no safer way to finance the purchase of a property: Whilst the agreement is in operation the property is allocated to the purchaser and secured by way of an endorsement which is registered on the title deed of the property in the Deeds Office. This means that the developer can not sell the property or encumber it or deal with it in any way until the conclusion of the agreement. Even in the unlikely event that the developer suffers financial loss and files for bankruptcy the purchaser will still retain the right to the property in terms of the agreement with the developer and will be able to carry on with the transaction until its conclusion.
Finance in terms of the Alienation of Land Act is only offered regarding the sale of vacant land, should a purchaser wish to construct a house on the erf which is financed in this manner, he/she will at that time have to obtain finance from a financial institution and transfer the property to his/her name in the normal manner of purchasing a property.
The benefits of this facility are:
1. Easy and simple way to purchase a property.
2. Virtually no initial costs.
3. Structure a payment plan to suit your needs.
4. No property rates payable for the duration of the agreement term (rates paid by developer).
5. Low risk.
6. Low interest rates.
7. Capitalise on the low prices of erven to secure a property without having to front a large deposit amount.