Are you buying or selling immovable property? Here’s what you need to know:
What is conveyancing?
Conveyancing is the process whereby ownership of immovable property is transferred from the Seller to the Buyer and includes the process of the cancellation and registration of mortgage bonds. This process is complicated and often misunderstood, and therefore requires the services of a conveyancing attorney.
Who appoints the Conveyancer?
According to our law, it is the Seller’s prerogative to appoint the Conveyancer/Transfer Attorney to attend to the transfer. This appointment is specified in the sale agreement or Offer to Purchase, which is a binding contract once signed by both Seller and Buyer. The Contract of Sale may require an expert hand, as it can have serious repercussions if not done properly.
That is why, it is advisable for a Conveyancer to go through the contract, advise on necessary clauses and explain all the obligations contained therein, before the contract is signed. The Conveyancer is tasked with ensuring that the legal obligations in terms of the contract are met and that the rights and interests of the parties involved are protected.
There are usually three Attorneys involved in the Conveyancing process:
The Transferring Attorney or Conveyancer attends to the registration of transfer of the property from the Seller to the Buyer. The Transferring Attorney/Conveyancer plays a fundamental role in the property transfer and oversees all aspects of the process. The Transferring Attorney is appointed by the Seller, as stated above.
Bond Cancellation Attorneys:
The Bond Cancellation Attorney cancels the Seller’s existing bond registered over the
property. This takes place simultaneously with the registration of the Buyer’s new bond (if
applicable) and the registration of transfer from Seller to Buyer.
The Bond Cancellation Attorney is appointed by the Seller’s bank or bond holder.
Bond Registration Attorneys:
The Bond Registration Attorney registers the Buyer’s new bond over the property, in favour of the bank, and represents the bank granting the Buyer’s bond. The registration of the Buyer’s bond takes place simultaneously with the cancellation of the Seller’s existing bond (if applicable) and the registration of transfer from Seller to Buyer. The Bond Registration Attorney is appointed by the buyer’s bank – granting the Buyer’s bond over the property.
WHO PAYS FOR WHAT?
It is crucial to understand the fees in the purchase equation, so that both Seller and Buyer are able to get their finances in order and be adequately prepared for the transaction by knowing who is liable for what. Over and above the actual cost of the property, the Buyer needs to set aside money for the transfer costs (conveyancing fees), which include but are not limited to; Conveyancer registration fees, Deeds Office registration fees and transfer duty.
- Please note that the Transfer duty and other transfer costs are payable to the Conveyancer before transfer takes place. The Buyer is usually obligated to make payment to the Conveyancer upon the Conveyancer’s request and failure to do so will result in delaying the transaction.
If a new bond is to be registered over the property, there are also Bond Attorney fees, for which the Buyer is liable to the Bond Attorney, for the registration of the bond.
The Seller is in turn, responsible for the Bond Attorney’s cancellation fees, if there is an
existing bond over the property.
- Please be advised that bond cancellation fees and bond registration fees are over and above and separate from the Transferring Attorney’s transfer fees.
The Seller is also responsible for payment of rates and taxes, homeowner’s levies (if applicable) and costs associated with the issue of electrical, plumbing, gas and beetle clearance certificates.
What can be expected from a Conveyancer?
In a typical registration and transfer process the attorney is involved in more than 50 activities, before the transaction can be completed. The Conveyancer has to deal with all the parties involved and he/she assumes responsibility for the collection and payment of all amounts due.
The Conveyancer coordinates most of the transfer process, but is extremely dependent on banks, municipalities, revenue offices, the deeds office and other role players in order to perform such duties.
The process is often delayed and compromised by Buyers who fail to pay deposits or transfer costs on time or fail to comply with the suspensive conditions in the contract within the specified time. Often, it is just one party that defaults, resulting in the other pressuring the Conveyancer to remedy the situation.
Nevertheless, the Conveyancer is tasked to attend to all applications timeously to ensure there are no unnecessary delays.
You can expect the following from your Conveyancer in a typical transfer transaction:
- The Conveyancer informs all parties of the conveyancing procedure and keeps the Seller,
Buyer and Estate Agent informed of the progress of the transaction;
- Advise the parties of the content of the offer to purchase, especially regarding any suspensive
conditions, special conditions and time limits;
- Attend to necessary deed searches and request FICA documents from Seller and Buyer;
- Advise the Seller of the cancellation of his/her existing bond, request cancellation figures, any
penalties, notice periods and other charges which may affect the settlement figure;
- Request guarantees from the bank/bond attorneys in respect of the transaction;
- Apply for the necessary rates and levy clearance certificates from the authorities;
- Attend to SARS application and make payment of transfer duty to SARS;
- Advise all parties of their obligations in order to ensure that the transfer is not delayed and
that the registration of the transaction takes place on or as close as possible to the date agreed
to in the offer to purchase;
- Meet with the Seller and Buyer for signature of the necessary documentation in order to
conclude the transaction;
- Draft and prepare all deeds and other transfer documentation for lodgement;
- Advise all parties of the transfer on the day of registration;
- Attend to the reconciliation calculations, account to Seller and Buyer and make all necessary
Please note that this is a general explanation of the conveyancer’s duties and the Conveyancing process. For further assistance and for more information regarding the transfer process and any other conveyancing relates queries, please contact our offices.
Attorneys involved in your transfer:
Bond Attorneys: Prepares the Buyer’s bond documents for signature and registration.
Cancellation Attorneys: Cancels the Seller’s bond (if applicable).
Transfer Attorney: Transfers the property from one party (Seller) to the other (Buyer).
When the bank lends money to a Buyer to purchase a property, a bond document is lodged and noted against the Title Deed to the property in the Deeds Office to provide the bank security.
The amount still owing on the Seller’s bond account that needs to be paid to the Seller’s bank to cancel the bond.
Sellers are required to obtain certificates (where applicable) from service providers, stating that the property’s gas, beetle, plumbing, electrical and electrical fencing are all in good working order.
The Deeds Office is responsible for the examination, registration, recording, management and maintenance of the property register of South Africa.
The Financial Intelligence Centre Act compels accountable institutions, such as banks and attorneys, to physically identify and verify the identities and existence of their clients as a preventative measure against fraud.
The Buyer’s bank will issue guarantees to the Seller’s bank stating the outstanding amount due on the Seller’s bond / or to the Seller on registration of the property into the name of Buyer.
When all documents are prepared, signed and costs paid, the transfer-, bond- and bond cancellation documents are lodged simultaneously and linked at the Deeds Office for simultaneous examining and registration.
The agreed date on which the Buyer gains full access to the property and the Seller will have vacated the property. It may be before, after or on date of registration of transfer.
Rates Clearance Certificate:
The Seller is responsible for settling all rates and municipal debt on a property, including a projected amount up until a future date (usually 3-4 months). Once settled, a certificate confirming payment has been made is generated by the relevant municipality.
Rates Clearance figures:
The amount the Seller owes to the municipality for rates and services.
A legally binding document, signed by the Buyer and Seller, stating the agreement of the sale and its conditions, as dictated by legislation (also referred to as the Offer to Purchase (OTP).
Any conditions specified in the Sale Agreement that need to be met in order for the deal to proceed, such as bond approval or the sale of an existing property.
Title Deed (Deed of Transfer):
The legal document which provides proof of registration and states ownership of a property. The scanned copy of Title Deed (Deed of Transfer) is filed at the Deeds Office and contains details of the property etc. The originals are then returned to the Transferring Attorney to furnish to the Buyer / Bank, whichever is applicable.
Transfer Duty is acquisition tax paid by the Purchaser to SARS to enable the transfer of a property into their name