REAL ESTATE FRAUD

The purchase of a property, a home or a piece of land usually involves a great deal of money exchanging hands. You should thus be extremely vigilant when engaging in any transaction regarding a venture of this nature.

Use the following guidelines as a means of protecting your interests:

1. Always engage the services of a reputable estate agency and a bona fide attorney. South African Estate Agencies are compelled by law to register with our national regulatory body, which is the Estate Agents Board. Estate Agents are required to subscribe to the strict codes of business ethics and conduct as set down by the Board. The same set of rules apply to Attorneys who are compelled to conform and act in accordance with the stringent standards set down by their national regulatory body.

2. South African law dictates that you may not register a property in your name unless you possess a bond on that property or until you have paid for it in full. This implies that should a seller become bankrupt before you have paid all that you owe on that property, you could well lose your investment.

3. There are many legal and personal details that need to be included on the contractual document designed to purchase a property ?? all intended to protect both you and the seller. Your bank, your attorney, your estate agent and your consultant should all be consulted on this crucial issue before you sign any such document.

4. 'Voetstoets'?? the South African concept of 'voetstoets' in a property deal is defined as such: Most property in South Africa is sold 'voetstoets', that is, is it is sold as it stands and the seller gives no guarantee and will not be liable for defects. The 'voetstoets' clause removes the seller's obligation to repair any defects on the premises any time after you have taken lawful possession of the property. Thus, close and careful scrutiny from each and every angle of the property you intend purchasing is very strongly advised.

5. A common recurrence in international property fraud is the role played by 'development companies' that simply do not exist. In terms of South African law the company's registration number must appear on the company's official number. Have your bank or attorney check if the company is authentic by having a search performed at the Registrar of Close Corporations or the Registrar of Companies in Pretoria.

6. Check that that the company does indeed own the property it is selling or has the legitimate owner's permission to sell it. Our local authorities or our deed's office will be able to tell you exactly who the legal owner is.

7. Closely scrutinise the company's references. Check out their previous buliding projects as well as verifying details with our local authorities or our building survey departments. Do not limit yourself only to the references provided by the company itself, they could be 'planted' by the company ?? go outside the circle and investigate matters.

8. Ensure that the company you are dealing with has been in existence for a reasonable amount of time. Visit the address detailed on the documentation and check with other companies and people in the vicinity as to the status of the company you are presently dealing with.

9. Ensure that you check the zoning details on the property. Check the nearby vicinity of the area or community you are buying into. Can you indeed build the factory you intend to or is the area currently being rezoned.