Residential Property Glossary

Offer to Purchase (OTP)

A binding written sale agreement between buyer and seller. In South African residential practice the OTP becomes unconditional once any suspensive conditions (typically the bond grant) are fulfilled. Sometimes called a sale agreement or deed of sale.

Suspensive condition

A condition in the offer to purchase that must be fulfilled before the sale becomes binding. The most common is the bond approval condition, which gives the buyer a stated number of days to obtain bond approval.

Bond pre-approval

A written confirmation from a bank of the maximum home loan amount it will grant the buyer at the time of pre-approval, based on the buyer income, credit profile and existing debt. Non-binding but anchors the bond figure in any offer.

Bond grant

The bank formal approval of a home loan in writing, following a property valuation and final credit assessment. The bond grant satisfies the bond suspensive condition in the offer to purchase.

Bond originator

A free-to-the-buyer service (ooba, BetterBond, MortgageMe) that submits a single bond application to multiple banks at once and presents the buyer with the best offer. Paid by the bank that grants the bond.

Conveyancer

An attorney specialised in transfer of property ownership. In South African residential practice the seller appoints the transfer conveyancer, the buyer bank appoints the bond conveyancer, and the seller bond bank appoints the bond cancellation conveyancer.

Transfer duty

A tax levied by SARS on property purchases above R1.21 million under the 2025/2026 sliding scale. Paid by the buyer at registration. Mutually exclusive with VAT.

Rates clearance

A certificate from the municipality confirming the seller has paid all rates, services and special levies up to a stated forward date. The deeds office requires it before transfer can register.

Title deed

The deeds office document recording the registered ownership of a property. Held by the bank during the bond period and released to the registered owner once the bond is settled.

Sectional title

A form of ownership where the buyer owns a defined section of a multi-unit scheme outright plus an undivided share of the common property. Governed by the Sectional Titles Schemes Management Act 8 of 2011.

Freehold

A form of ownership where the buyer owns the entire erf (the demarcated piece of land) and any buildings on it, registered in their name in the deeds office. No body corporate.

Body corporate

The legal entity that governs a sectional title scheme. Created automatically when the first unit transfers. Every owner is a member. Trustees run day-to-day decisions; the AGM approves the budget and major decisions.

Participation quota

A unit floor area divided by the total floor area of all units in a sectional title scheme. Determines voting weight and the share of the levy each owner pays.

Levy

A monthly amount each sectional title owner pays to the body corporate, in proportion to their participation quota. Covers building insurance, common property maintenance, security, accounting, and reserve fund contributions.

Special levy

A one-off levy raised by the body corporate to fund a specific project (roof replacement, painting, major plumbing) that exceeds the reserve fund balance and cannot wait for the normal budget cycle.

Exclusive use area

A part of the common property in a sectional title scheme (parking bay, garden, storeroom) allocated to a specific owner for exclusive use, with its own portion of the levy. The owner does not own it, but has exclusive use.

Conduct rules

Rules in a sectional title scheme governing what owners and occupants may and may not do: pets, noise, alterations, short-term letting, parking, decoration of common areas. Scheme-specific.

Management rules

Rules in a sectional title scheme governing how the body corporate operates: trustee elections, meetings, voting, financial controls, levy raising.

CSOS

Community Schemes Ombud Service. A statutory body providing dispute resolution for sectional title schemes and homeowners associations, faster and cheaper than court for most scheme disputes.

Homeowners Association (HOA)

A non-statutory association that governs common areas and shared infrastructure in a freehold security estate. Every property owner is automatically a member.

Voetstoots

A clause in a sale agreement that the property is sold as is, with the buyer accepting any patent defects. Under the Consumer Protection Act, the voetstoots clause does not apply where the seller knowingly concealed latent defects.

Latent defect

A defect that is not visible on reasonable inspection of the property. The seller is liable for latent defects they knew about and did not disclose, regardless of any voetstoots clause.

Patent defect

A defect that is visible on reasonable inspection of the property. Covered by the voetstoots clause; the buyer accepts patent defects on purchase.

Occupation date

The date the buyer takes physical possession of the property. Set in the offer to purchase. May or may not coincide with registration.

Occupation rental

The monthly rental the buyer pays the seller for the period between occupation and registration, if occupation precedes registration. Set in the offer to purchase, typically tied to the prime rate on the purchase price.

Registration

The legal moment in the deeds office when ownership transfers from seller to buyer. The new bond is registered, the old bond is cancelled, and the buyer becomes the registered owner.

FICA

The Financial Intelligence Centre Act 38 of 2001. Requires conveyancers to verify the identity, address and source of funds of every party to a property transaction. Standard documents: certified ID, proof of address, proof of source of funds.

FLISP

The Finance Linked Individual Subsidy Programme. A once-off government subsidy from the Department of Human Settlements for first-time buyers with household income between R3,501 and R22,000 per month. Paid into the bond at registration.

Capital Gains Tax (CGT)

A tax levied by SARS on the gain from the sale of a property. The first R2 million of capital gain on a primary residence is exempt. For investment property, 40% of the gain (less R40,000 annual exclusion for individuals) is taxed at the marginal rate.

NHBRC warranty

A warranty under the Housing Consumers Protection Measures Act 95 of 1998 on every new home built by an NHBRC-enrolled builder. Five years structural cover, one year roof leak cover, three months patent defect cover.

Mandate

The written authority a seller gives an agent to market the property. Sole mandate (one agency exclusively, typically 90 days) or open mandate (multiple agencies, commission to whoever brings a successful offer).

PPRA

Property Practitioners Regulatory Authority. The statutory body that regulates estate agents in South Africa under the Property Practitioners Act 22 of 2019. Issues Fidelity Fund Certificates to qualifying practitioners.

Fidelity Fund Certificate (FFC)

A certificate issued by the PPRA confirming an estate agent or principal is registered and compliant. Without a current FFC, an agent cannot receive commission. Always confirm an agent has a current FFC before signing a mandate.

Electrical compliance certificate

A certificate from a registered electrician confirming the electrical installation on a property complies with the Electrical Installation Regulations 2009. Mandatory on every property sale in South Africa. The seller pays.

Comparative Market Analysis (CMA)

An estate agent analysis of recent sold properties, currently active competing listings, and the condition of the subject property, producing a recommended marketing price range.

Need a term explained in context?

The Africa Estate residential guides walk through buying, selling, transfer, sectional title and first-time buyer scenarios in depth.