Page 13 - Nexia SAB&T Property and Tax Guide 2025

◆ The balance of the purchase price is normally secured by a bank guarantee,
usually coupled with a mortgage bond to be registered over the property. The
seller’s conveyancer must make sure that guarantees are provided timeously, and
the purchaser must ensure that the contract provides sufficient time to arrange
finance and provide guarantees.
LEGAL PRACTICE ACT (LPA)
Section 86(4) of the LPA allows legal practitioners to invest client monies in a separate
trust savings account where there is an underlying transaction with an explicit mandate
from the client to do so. 5% of the interest earned will automatically be paid monthly to
the Legal Practitioners Fidelity Fund by the bank (which has been approved by the LPFF).
In addition, the Act requires an attorney who receives written instructions from a client,
to set out the intended scope of the engagement with clarity and in writing, including
estimated costs for the services to be provided.
FATCA
In order to invest funds, the requirement of disclosure of world-wide tax registration
is required in terms of the US Foreign Account Tax Compliance Act, and an Inter-
Governmental Agreement (IGA).
OCCUPATIONAL INTEREST
Where occupation takes place on a particular date and transfer takes place after the
date of occupation, occupational interest is paid at an agreed amount for the period
of occupation until transfer. In most cases this is paid by the purchaser, who may take
occupation prior to transfer being registered. The terms should be stipulated in the deed
of sale. In some cases, it is the seller who is the one who has to stay on in the property
he or she has sold and where transfer has been registered. In this case, the seller will
be required to pay occupational interest to the purchaser. In general, on occupation,
risk passes to the purchaser. Clauses dealing with occupational interest and risk (who
is at risk while the purchaser is in occupation) should be included in the deed of sale.

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