Do you know what documents banks require during a sale?
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It can be confusing knowing what documents banks may require during a sale process with regards to commercial and industrial property. Here are the documents potentially required:
- Sale Agreement
A signed sale agreement between the buyer and seller detailing the terms of the sale.
- Title Deed
The current title deed of the property, showing ownership and any encumbrances (e.g., mortgages, liens).
- Zoning Certificate
A certificate from the local municipality confirming the zoning of the property.
- Building Plans
Approved building plans, especially if there are structures on the property.
- Rates Clearance Certificate
A certificate from the local municipality showing that all municipal rates and taxes have been paid up to date.
- Environmental Impact Assessment (EIA)
If applicable, an EIA report may be required, particularly if the property's use could impact the environment.
- Occupancy Certificates
If the property has existing buildings, occupancy certificates may be required to prove compliance with local regulations.
- Financial Statements
The buyer's financial statements, typically for the last two to three years, to assess their ability to service the loan.
- Business Plan
A business plan or feasibility study, particularly for new developments or when the property will be used for a new business venture.
- Company Documents
If the buyer is a company, the bank may require the company's registration documents, memorandum of incorporation, and details of directors and shareholders.
- Tax Clearance Certificate
A certificate from the South African Revenue Service (SARS) indicating that the buyer is in good standing with their tax obligations.
- Proof of Insurance
Proof of property insurance, including cover for the building and possibly for business interruption or liability.
- FICA Documentation
Compliance with the Financial Intelligence Centre Act (FICA), which includes providing proof of identity and address for the buyer (and directors if a company).
- Property Valuation
Although typically arranged by the bank, the buyer may need to facilitate access for a professional valuation of the property.
- Other Legal Documents
Any other legal documents related to the property, such as servitude agreements or lease agreements if the property is tenanted.
The bank may request additional documents depending on the specifics of the transaction, so it's advisable for both parties to consult with their legal and financial advisors to ensure all requirements are met.
Author: Marder Properties
