When a homeowner in South Africa decides to sell a property that is financed through a home loan, it is important to remember the bank’s 90 days’ notice requirement. Many banks include a clause in their home loan agreements requiring clients to provide written notice before cancelling their bond.
If the required notice is not given, the bank may charge an early termination penalty fee. This fee is intended to compensate the bank for the loss of interest they would have earned had the loan continued for the agreed term.
The notice period does not mean that the property must transfer within 90 days. It simply means the homeowner should notify the bank of the intention to settle and cancel the bond as early as possible once they decide to sell. In most cases, the seller’s transferring attorney will assist with requesting cancellation figures from the bank during the transfer process.
Providing early notice can help sellers avoid unnecessary costs and delays. It also allows the bank sufficient time to process the bond cancellation instructions smoothly.
Estate agents play an important role in educating sellers about this requirement at the beginning of the sales process. Understanding the 90 days’ notice rule can assist homeowners in planning properly and ensuring that the sale of their property proceeds efficiently.
Before listing a property for sale, homeowners are encouraged to check their bond agreement or consult their bank to confirm the applicable cancellation terms and potential penalties.