Sale and Cession of Future Property Sale Proceeds
STANDARD TERMS AND CONDITIONS
1. DEFINITIONS
1.1 Terms refer to this standard terms and conditions.
1.2 Agreement means the Application Schedule together with this Standard Terms and Conditions as signed by the Applicant(s) and SCH.
1.3 SCH means SOUTHERN CAPE HOLDINGS (PTY) LTD t/a SCH BRIDGING AND DISCOUNTING SOLUTIONS (Registration number: 2023/814796/07).
1.4 Applicant(s) means the party or parties selling the claim to SCH and may consist of the Seller or Agent as the context requires
1.5 Discounting Transaction means the sale of a claim by the Applicant(s) to SCH, as described in the Application Schedule.
1.6 Claim means the Applicant’s claim against the Conveyancer for:
i) a defined portion of the Net Proceeds due or becoming due to the Applicant(s) in respect of the transfer; or
ii) a defined portion of the commission due to the agent in respect of the sale.
1.7 Agent means the registered property practitioner, appointed by the Seller, who was the effective cause of the sale and has accordingly earned commission which is payable by the conveyancer upon registration of transfer.
1.8 Commission means the remuneration earned by the Agent in terms of the sale agreement, calculated in accordance with the agreed mandate.
1.9 Sale Agreement means the agreement in respect of the sale of the property described in the Application Schedule.
1.10 Net Proceeds means the amount due to the Seller of a property which amount consists of the Purchase Price of the property described in the Application Schedule after deduction of bond settlement amount, commission, any Municipal fees, Transfer fees, Bond registration or -cancellation fees as well as any other applicable fees or agreed to deductions.
1.11 Transfer means the transfer of the property described in the Application Schedule.
1.12 Application Schedule refer to an application which must be completed by the Applicant, and which contain the details of the transaction.
1.13 Purchase Price means the amount paid by SCH to the Applicant for consideration of the claim as stipulated in the Application Schedule under Capital Amount.
1.14 Minimum Charge Period is equal to 30 calendar days and applies to all transaction regardless of the Settlement Date.
1.15 Settlement Date means the date on which SCH receive payment of the proceeds from the conveyancer.
1.16 SCH’s Standard Operating Window refers to a period within which settlement is assumed to occur and on which assumption the transaction is priced. This Standard Operating Window is a minimum period of 30 calendar days and a maximum of 59 calendar days after payment of the Purchase Price.
1.17 Daily Discount Rate means a percentage used to calculate the discount on the Purchase Price as stipulated in the Application Schedule.
1.18 Escalated Daily Discount Rate means the applicable Daily discount rate plus 0.025% increase from day 60 after payment of the Purchase Price onward.
1.19 Maximum period refers to the maximum amount of calendar days within which the Applicant must make payment and constitutes 105 calendar days from payment of the Purchase Price.
1.20 Full Outstanding Amount means the Purchase Price, all accrued discounting fees, the administration fee and any other amounts due under the agreement.
2. NATURE OF TRANSACTION
2.1 These Standard Terms and Conditions govern all transactions concluded between SCH and an Applicant(s) in terms of which SCH purchases a defined portion of an Applicant’s Net Proceeds or commission earned at a discount.
2.2 Each transaction constitutes:
a) an out-and-out sale of a claim;
b) a cession of all right, title and interest in the Nett Proceeds or Commission on an absolute basis; and
c) a discounting transaction, not a loan or advance.
2.3 No credit is granted by SCH, no money is lent, and no repayment obligation arises other than as expressly provided for in these Terms.
2.4 The parties expressly agree that the National Credit Act 34 of 2005 does not apply to any transaction governed by these Terms.
3. INCORPORATION AND HIERARCHY OF DOCUMENTS
3.1 These Terms are incorporated by reference into every application, quotation, approval, or transaction schedule issued by SCH (“Application Schedule”).
3.2 In the event of any conflict:
a) the Application Schedule shall prevail in respect of transaction-specific terms;
b) these Terms shall prevail in respect of all general rights, obligations, and enforcement mechanisms.
4. OUT-AND-OUT SALE AND CESSION OF A CLAIM
4.1 The Applicant sells, assigns, transfers, and cedes to SCH all of the Applicant’s right, title, and interest in and to the Net Proceeds or commission arising from the sale of the immovable property identified in the Application Schedule.
4.2 The cession is:
a) absolute;
b) unconditional; and
c) irrevocable upon payment by SCH.
4.3 Ownership of the ceded claim passes to SCH on payment of the purchase price, irrespective of the date of property transfer.
5. PURCHASE PRICE AND ADMINISTRATION FEE
5.1 The consideration payable by SCH for the Claim shall be as set out in the Application Schedule under Capital Amount.
5.2 SCH shall be entitled to charge a fixed administration fee per transaction, as disclosed in the Application Schedule.
5.3 The administration fee:
a) is once-off;
b) is charged in addition to the discount pricing;
c) is non-refundable once any funds are released by SCH;
d) payable on approval or deducted from the first payment.
6. DISCOUNT PRICING MECHANISM
6.1 GENERAL
6.1.1 The Purchase Price reflects a discounted value of the Claim, determined by reference to time, capital utilisation, and settlement risk.
6.1.2 Any daily rate applied:
a) is a discount rate, not interest;
b) does not compound;
c) accrues daily until settlement or enforcement.
6.1.3 A minimum charge period applies to all transactions, regardless of early settlement, as specified in the Application Schedule.
6.2 DAILY DISCOUNT RATE
6.2.1 The Daily Discount Rate is not interest, accrues daily until settlement, does not compound and is subject to the minimum charge period.
6.2.2 The Standard Rate applies to a Purchase Price up to and including R1 000 000.00.
6.2.3 The Reduced Rate applies to the full amount of a purchase Price exceeding R1 000 000.00.
7. SETTLEMENT ASSUMPTIONS
7.1 Each transaction is priced on the assumption that settlement will occur within SCH’s Standard Operating Window.
7.2 If settlement occurs outside the standard period:
a) the applicable discount rate shall escalate automatically;
b) such escalation constitutes price adjustment, not default interest;
c) escalation shall apply prospectively only.
8. ESCALATION FOR DELAYED TRANSACTIONS
8.1 If settlement occurs after day 59 the applicable Daily Discount Rate automatically increases by 0.025% per day from day 60 onward.
8.2 If settlement occurs after day 89 the applicable Escalated Daily Discount Rate automatically increases by a further 0.05% per day from day 90 onward.
9. MANDATORY ACCELERATION
9.1 Automatic Acceleration
If settlement has not occurred within the Maximum Period:
9.1.1 the Applicant shall be deemed to be in material breach of this Agreement; and
9.1.2 the Full Outstanding Amount shall automatically and immediately become due and payable, without the need for any notice or demand.
9.2 Post-Acceleration Rights
From day 106 onward, SCH shall:
9.2.1 No longer be obliged to allow the transaction to continue; and
9.2.2 Be entitled to proceed directly to enforcement without further notice.
10. ADDITIONAL SECURITY – MORTGAGE BOND
10.1 Failure to settle within the Maximum Period shall constitute a material breach of this Agreement.
10.2 Upon the occurrence of such breach, SCH shall be entitled, without prejudice to any other rights or remedies available to it, to register a mortgage bond over the Property in favour of SCH as continuing and additional security for:
a) the Purchase Price paid by SCH;
b) all accrued and unpaid discounting fees;
c) the administration fee;
d) any default charges or penalty amounts; and
e) all legal and enforcement costs incurred by SCH.
10.3 The Seller hereby irrevocably consents to the registration of the mortgage bond and undertakes to sign all documents and do all things reasonably required to give effect thereto.
10.4 In the event that the Seller fails, refuses, or is unable to cooperate, the Seller hereby grants SCH an irrevocable power of attorney to:
a) sign all documents relating to registration of the mortgage bond;
b) take all steps necessary to procure registration of the mortgage bond; and
c) apply to a court of competent jurisdiction, if required.
10.5 The mortgage bond shall constitute additional security only and shall not novate, replace, or limit:
a) the cession of the Claim;
b) the conveyancer’s undertaking; or
c) the Seller’s personal obligations under this Agreement.
10.6 SCH shall be entitled, where reasonably possible, to require that such mortgage bond be registered as a first-ranking bond.
10.7 All costs relating to the preparation, registration, maintenance, and cancellation of the mortgage bond, including legal costs on the scale as between attorney and client, shall be for the Seller’s sole account and recoverable by SCH on demand.
11. FAILURE
11.1 In the event that the ceded proceeds fail to arise and SCH shall be entitled to:
a) to enforce its rights arising from the cession and the Applicant’s warranties;
b) cancel the Agreement and claim restitution in terms of which the amount to be restored by the Applicant shall equal the original purchase price paid by SCH together with the accrued discount adjustment calculated in accordance with the agreed daily discount rate up to the date of restitution, which amount represents a reversal and re-pricing of the purchase consideration and shall not constitute interest, a finance charge, or repayment of a loan or credit.
11.2 cancel
12. ENFORCEMENT AND RECOVERY
12.1 SCH may, without prejudice, enforce its rights by:
a) directing payment via the conveyancer;
b) enforcing against the Applicant personally for breach of warranty;
c) instituting legal proceedings.
d) cancel the agreement and claim restitution.
12.2 All legal costs shall be recoverable on the scale as between attorney and client.
13. CONVEYANCER UNDERTAKING AND PAYMENT DIRECTION
13.1 The Applicant irrevocably authorises the appointed conveyancer to:
a) acknowledge SCH’s cession; and
b) pay the Claim directly to SCH on registration of transfer.
13.2 SCH’s entitlement to payment shall rank first against the Proceeds, prior to any payment to the Applicant.
14. WARRANTIES BY THE APPLICANT
14.1 The Applicant warrants that at all times:
a) the property sale agreement is valid and enforceable;
b) no prior cession of the Proceeds exists;
c) no sequestration, liquidation, or legal disability applies;
d) all information supplied to SCH is true and complete.
14.2 Each warranty is material and independently enforceable.
15. CONFIDENTIALITY
All transaction details are confidential unless disclosure is required by law or for enforcement.
16. GOVERNING LAW AND JURISDICTION
These Terms are governed by the laws of the Republic of South Africa. The parties consent to the jurisdiction of the Magistrate’s Court.
17. GENERAL
17.1 These Terms constitute the standard contractual framework applicable to all SCH transactions.
17.2 No indulgence shall constitute a waiver.
17.3 Any amendment must be in writing and signed by SCH.
