Buyers Trust provides property buyers an alternative proposition for the investment of their property deposit.
The investment is with a reputable South African bank, in an account in the buyers own name, operated by Buyers Trust (an FSCA registered entity) under an investment mandate signed by the buyer. The proposition provides buyers with security, transparency and a competitive investment return on their deposit.
Buyers Trust
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Frequently asked questions
Buyers Trust is a company that is 100% owned by ooba (Pty) Ltd. ooba has been operating in the home loan origination and insurance industries for over 20 years. Buyers Trust is licensed by the Financial Sector Conduct Authority under license number 49092, to provide advice to customers on long term and short term deposit investments.
Importantly, Buyers Trust is purely the advisor and administrator of your investment. Buyers Trust does not directly handle any of the monies, with all monies being invested directly into a bank account, with a reputable South African bank, in your own name.
Should anything happen to Buyers Trust, your money will remain invested in the bank account opened for you by Buyers Trust, and your investment will not be negatively impacted in any way.
As a buyer, you do have choices as to where you would like your property deposit invested, pending the transfer of the property into your name. You could:
- a. Arrange with your own bank for them to issue a guarantee to the transferring attorney appointed by the seller, however this is generally a time consuming and expensive process.
- b. Invest the deposit into your estate agent's trust account. Many estate agents no longer wish to hold deposits in their trust accounts, given the risks to them and costs of managing the deposit.
- c. Invest the deposit into the trust account of the conveyancing attorney who has been appointed by the seller to handle the property transfer. This is currently the option that is most often used.
Investing your deposit with Buyers Trust gives you the peace of mind of knowing that:
- a. Your deposit is invested in your own name in a bank account in your name, administered by Buyers Trust under a specific investment mandate given by you.
- b. Buyers Trust is regulated under the auspices of the Financial Sector Conduct Authority.
- c. A guarantee is issued to the transferring attorney from your account, ensuring that you meet all your contractual obligations to the seller.
- d. There is complete transparency as to the interest return you will earn on the monies you have invested in this account.
- e. With the large amount of fraud on property deposits happening in the market at present, Buyers Trust has taken all possible steps to ensure that the process of receiving and paying your deposit is as risk-free as possible.
Buyers Trust will open the bank account on your behalf (we are authorised to do so in terms of our agreement with the bank and have access and training on the bank systems to do this). Buyers Trust will conduct the necessary FICA requirements directly with you on behalf of the bank. As soon as the account is opened (this takes a few minutes), we will communicate the account details to you.
No, the Buyers Trust fee for the administration of your deposit is the only fee you will pay. There are no additional banking administration fees or guarantee fees. The fee to be charged by Buyers Trust will be transparently communicated with you upfront in the investment mandate document and will be deducted from the interest earnings on your deposit invested.
No, unfortunately not. Once the property has been transferred, and the deposit has been paid to the sellers' attorneys, Buyers Trust will close the bank account and at the same time will return the net interest earnings on the account to you.
If the property transfer falls through, and there are no disputes, the guarantee issued to the sellers' attorneys will be cancelled and the amount invested, plus net interest earnings, will be paid back to you. The bank account will thereafter be closed. Should there be a dispute amongst the parties, the deposit amount will remain invested in the bank account, in your name, until such time as the dispute has been clarified.
The interest rate will be linked to the prime rate of interest and will change as the prime rate changes. Furthermore, the rate will be dependent on the size of the deposit, with larger deposits attracting higher interest rates. The rate applicable to your transaction will be confirmed upfront with you and will be in your investment mandate.