This is a simplified summary of the conveyancing process for a standard transfer of immovable property. In reality, it can be a complicated process and we are aiming to break it down to assist in your understanding the process. This is written from the perspective of the transferring attorney. It does not extensively include the role of the Bond Attorney or Bond Cancellation Attorney.
What is Conveyancing?
Conveyancing is a complex legal process involving multiple role players whereby the Purchaser obtains registered ownership of fixed property. This includes improved and unimproved land, houses, farms, flats (i.e. sectional title transactions), as well as registration of mortgage bonds and other rights involving property, for example usufructs and servitudes. The transfer process starts on the date the Deed of Sale is signed and ends on the date of payment of finances and the delivery of deeds.
Who is a Conveyancer?
A Conveyancer is a specialised attorney. By law, only Conveyancers can attend to the transfer of immovable property. Conveyancing work is reserved for practicing conveyancers in order to vest them with the responsibility of ensuring that the title to the land cannot be challenged and to maintain a high standard of land registration. Conveyancers are usually assisted by a conveyancing secretary or para-legal as there is a great deal of work that is involved in the process.
Who appoints the conveyancer?
In the case of property transfers, the Seller is entitled to appoint his own Conveyancer to attend to the transfer. This, however, can be varied by agreement between the Seller and the Purchaser. It is not uncommon for the Seller to allow the Purchaser to nominate a Conveyancer. The Conveyancer is generally nominated in the Deed of Sale.
The Agreement of Sale
Fixed property can only be sold by way of a written Deed of Sale, which is a contract signed by both Seller and Purchaser (as well as their respective spouses should they be married in community of property or the property is owned jointly).
The majority of sales are brokered by Estate Agents who usually have a standard Deed of Sale that is completed and signed by the Seller and the Purchaser. It is only once the Seller has accepted the Purchaser’s offer and signed the Deed of Sale that the Estate Agent will forward the Deed of Sale to the nominated Conveyancer.
Should there be no Estate Agent involved in the transaction, the nominated Conveyancer can draft the Deed of Sale and negotiate the terms and conditions thereof with the respective parties.
The Transfer
Once the transferring attorney receives the signed Deed of Sale, Deeds Office searches are conducted to confirm, amongst other things, that the details on the Deed of Sale are correct and whether there are any mortgage bonds registered over or any interdicts against the property.
The Seller, Purchaser and Estate Agent are then advised that we have received the Deed of Sale and that the process has commenced. The Purchaser is requested to transfer the deposit according to the Deed of Sale into the transferring attorney’s Trust Account to be invested pending transfer.
Most Deeds of Sale contain suspensive conditions that suspend the transaction until they have either been fulfilled or lapsed. A typical example of a suspensive condition is the obtaining of bond approval by the Purchaser. Should this not happen within the specified period of time, the Deed of Sale will fall away and the Seller must look for a new Purchaser.
However, should the condition(s) be fulfilled, the transaction will proceed and the transferring attorney requests certain information from the Seller and Purchaser to enable her to draft the transfer documents. Appointments are made with all parties to sign the documents where the transfer attorney will explain the transfer process, supervise the signing of the transfer documents and discuss the finances of the transaction.
These include transfer duty, the conveyancing fee plus VAT, disbursements, homeowners’ association and/or levy clearance fees, Deeds Office fees and searches etc. This account does not include any bond or bank fees. At this stage, the Seller will be asked to ensure that all compliance certificates are being attended to such as electrical, beetle, plumbing, gas and electric fence.
Is there currently a mortgage bond registered over the property?
If there is a bond currently registered over the property, the transferring attorney will advise the bond holder (the bank) of the sale and that the bond needs to be cancelled. The bank will then instruct its own attorney to cancel the bond and forward the original Title Deed to the transferring attorney.
The bond cancellation attorney will provide the settlement figures required to settle the mortgage bond on transfer date.
If there is no bond registered over the property, the Seller should be in possession of the Title Deed and must give it to the transferring attorney. As no property can be transferred without the original current Title Deed, if it has been lost, the transferring attorney must apply to the Deeds Office for a duplicate original. This process could delay the transfer.
The new mortgage bond
The bank that approved the Purchaser’s loan application will now also instruct their Conveyancers to draft and register the new bond.
As these are all simultaneous transactions, the transfer, bond and cancellation attorneys must work closely together to ensure that these transactions are all lodged and registered together in the Deeds Office. All these transactions relate to the same property, and so one transaction cannot be lodged and registered without the others.
Documents required by the Deeds Office
For transfer to take place, the Deeds Office requires a Rates Clearance Certificate and a Transfer Duty Certificate, both of which must be lodged at the Deeds Office together with the original Title Deed, Power of Attorney and Deed of Transfer.
Rates Clearance Certificate
This Certificate certifies that all outstanding rates and rates in advance for the next three months have been paid in full.
In order to receive the Certificate, the Conveyancer requests the local municipality to provide the rates clearance figures. The Seller is then requested to pay this amount to the Conveyancer who will settle the account. Once settled, the municipality will provide the Certificate.
Transfer Duty Certificate
Transfer Duty is a tax levied on all transfers – the amount depends on the market value of the property and is paid by the Purchaser. SARS will provide the Conveyancer with the Certificate after payment.
From Lodgement to Registration
Throughout this time the Conveyancer is in contact with the Bond and Bond Cancellation Attorneys. Once all parties are ready, or the specified date of transfer as in the Deed of Sale nears, each Attorney places his documents in a folder which is then linked and lodged together at the Deeds Office so that they can be examined and registered simultaneously. The examination period usually lasts 10 working days.
The Deeds Office has the right to reject any documentation that it deems incorrect or if any required documentation is not lodged. The entire batch would be rejected. The problem(s) are addressed by the relevant Attorney and the entire batch re-lodged for examination. When the Deeds Office is satisfied, the deeds become available for registration and the Conveyancers have five working days in which to arrange for registration of transfer.
The deeds are “handed in” for formal registration in the Deeds Office. Transfer of ownership passes from the Seller to the Purchaser when a new Title Deed is formally executed by the Conveyancer and the Registrar of Deeds.
What happens after registration?
Once the transaction is registered in the Deeds Office, the finances of the transaction are finalised by the law firms who ensure that the amounts required to cancel any mortgage bond are paid, the Purchaser’s mortgage loan from the bank is received, the Seller receives his net purchase price and any other payments authorised by the Seller are also made. For practical purposes, this is the end of the conveyancing transaction.
However, after about two to four months, the Deeds Office will deliver the registered Title Deed and mortgage bond to the Conveyancer who ensures delivery of the original Deed to the bondholder or Purchaser.