Conveyancing & The Property Transfer Process
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Conveyancer by South African definition is an attorney who is also duly qualified
and specialises in the legal aspects of buying, selling and transferring title
of property. A conveyancer is a lawyer who has acquired additional conveyancing
qualifications, allowing them to attend to registration at the deeds office
of various fixed property transactions.
What is meant by the term conveyancing?
‘Conveyancing’ is a description of the legal process required to allow for a party to become the registered (and lawful) owner of a property. In broad terms fixed property could be any land, (improved or unimproved) including he likes of a stand, a house, townhouse, flat, cluster, farm etc.
Conveyancing is needed for the registration of the likes of mortgage bonds and numerous other rights in fixed property such as servitudes or use areas in sectional title. A typical conveyancing transaction involves a complex chain of events which starts with an offer to purchase the deed of sale and carries on all the way to the registration of ownership
Who has the right to appoint a conveyancer?
In South Africa, it is usually the seller who appoints a conveyancer to attend to the transfer.
Why do I need a “Conveyancer”?
Large amounts and huge risks are usually involved in the transfer of property. In SA the law at present stipulates that only qualified conveyancers are permitted to attend to the transfer of fixed property. This grant strong protection to the rights and interest of the parties and also safeguards the integrity of our land registration system.
Step 1 in the sale of property?
Buying
a home is the biggest financial commitment most folks ever enter into. To ensure
a smooth transfer its very important that the right Conveyancers are chosen
carefully. Your Chas Everitt Agent will have explained all of the various and
transaction specific terms of your sale agreement to all of the parties. We
encourage both purchasers and sellers to ask questions and ensure the fully
understand all the terms - even before signature of the agreement. It is important
to understand that once the offer to purchase is signed by all, it’s a
legal and binding contract between the Seller and Purchaser. Once your Chas
Everitt Offer to Purchase (OTP) is signed by all the relevant parties it is
forwarded to the conveyancing attorneys (normally selected by the seller). They
will then start on the process of transferring ownership of the property from
the seller to the Purchaser. The process is quite complex and entails a number
of steps which are handled by the conveyancing attorney.
Receipt of OTP and instructions to proceed with transfer
Your conveyancer will be guided by the terms and conditions of the agreement (OTP) finalised between the Purchaser and the seller as recorded in the contract. After reviewing and noting all of the details of the transaction between the parties the Conveyancer will initially open a file, but will only proceed further if and when all of the suspensive conditions that may be contained in the agreement have been fulfilled. This would include the likes of the purchasers bond having been granted.
The Conveyancer will then do a search of the records at the relevant Deeds Office where the property is registered to check property details, all of the relevant ownership records and obviously any bonds or encumbrances which are registered against the property.
Existing bond/s on the property
If the property seller had a bond (or bonds) registered against the property this/these need to be settled prior to any efforts to effect transfer of ownership. Part of the conveyancers duty is that they are required to contact the bond holder for cooperation in the process and will drafty a letter to them to the effect that the property has subsequently been sold and requesting the bond holder to forward the seller’s title deed to them. Mortgage institutions keep the title deed for security.
At the same time the conveyancer will ask the bond holder to advise them of the sum needed to settle the existing bond/s on registration of transfer and ask the bondholder to instruct their own conveyancers to prepare the relevant paperwork as required by Deeds Office to allow the bond to be cancelled at the point of registration of transfer of the property to the new Purchaser. Most institutions or mortgage holders need a minimum period of notice, usually around three months for the cancellation of bonds they hold. If notice is not given there may well be a penalty involved.
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property cannot be transferred without the written consent of the relevant municipal
authority. This will only be granted by the municipality if any and all monies
owing to them it has been settled.
The Conveyancer will draft a letter to the municipal authority requesting a full statement of all monies owing. In recent time and particularly in the Gauteng region, there are often delays in the processing as well as issues surrounding the amounts involved.
The statement will incorporate full details of any and all arrears with regard to rates and services, the balance of rates for the rest of the current financial year and furthermore an estimate for around three months of average billing. Whilst there is often debate again around these amount, failure to accept them at this stage can result in further delays. A portion of the amount paid with respect to the rates for the period from transfer to the end of the financial year of the municipal authority will accrue to the Purchasers account who will be need to pay hisportion to the Conveyancer on demand.
Drafting of required preliminary documents
When your conveyancer has received all of the Deeds Office information (and subject to all/any other suspensive conditions having being fulfilled) they will then go ahead with preparing all the relevant paperwork required for the deeds office and our friendly SARS (South African Revenue Service) folks which will the need to be signed by seller and purchaser. Failure to attend to the signing promptly at this stage can again cause further delays.
On
the parties signature of the preliminary documents, the Purchaser will be required
to settle the full transfer costs bill. This amount will include the attorney’s
fee and VAT, the transfer duty and the Deeds Office fees. The Purchaser needs
to be in a position to settle these costs at minimum a month before the anticipated
transfer date as the Conveyancer needs to pay the transfer duty to SARS before
the Deeds Office can be contacted for registration of the transfer. Unfortunately
transfer duty is payable according to the scaled rates on all sales where the
property is not part of a VAT registered entity and where the property purchase
price is in excess of Five Hundred thousand Rand.
If the Purchaser is registering a mortgage bond to effect payment of the property, the institution who have granted the mortgage will appoint their own selected attorneys to draft the bond documentation. The “bond attorneys” will coordinate with your conveyancer to gate any necessary information needed to allow them to draft and prep the bond documents. These bond attorneys will set up their own arrangements with the Purchaser to sign the required paperwork. They will also give the Purchaser an account for same. Purchaser need to understand all of the conditions required by the bank to grant the mortgage.
Post signature of all documents
Once
all of the parties involved in the process are ready - bond attorneys paperwork
signed/bond cancellation consent to cancel is in their possession and signed
off by the bondholder/transfer duty receipt and rates clearance in hand, the
Conveyancer will communicate with any or all attorneys involved in the transaction
and arrange for a lodgement of documentation at the Deeds Office. On this date
all the attorneys hand their document in at Deeds, which are then packaged up
by the Deeds Office who will the allocate them to a deeds office examiner, who
will check and inspect the documents, and if OK, approves everything to allow
for registration.
In most instances and in usual circumstances it usually takes around 10 days BUT this can vary with some of the unique situations which arise in SA! Should there be any problems with the documentation, they are in deeds office terms, rejected and any notes attached will need to be attended to. If the documents are approved for registration the Conveyancer, after ensuring that all the finances for the transaction have either been paid or alternatively secured, will arrange with all the attorneys concerned for actual registration to take place. At the moment of registration ownership passes from the seller to the Purchaser. On that day the seller receives his purchase price and the transaction is complete.
It is extremely difficult to estimate precisely how long a transfer takes from the time that the Conveyancer receives his instructions. If one is forced to make an estimate, then one can assume that if all the parties involved in the transaction, perform their function timeously, that the entire transaction could be completed within a period of two months from the time of receipt of the initial Sale Agreement.
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