The Transfer Process
Once the suspensive conditions are fulfilled, the Conveyancer will be instructed to proceed with The Transfer Process. This involves certain steps:
The Sale Agreement
Buying or Selling property is the biggest financial commitment most of us will ever undertake. It is thus very important that the Estate Agent and Conveyancers are chosen
carefully. The Seller has the right to choose a Conveyancer who will act on his behalf. It is imperative to Give Notice in order to stop penalties raised by the bank. The
Estate Agent will explain the terms of the sale agreement to the parties – who must ensure that they ask questions and understand all the terms and conditions. Before
signing the agreement, the Seller has the option to send Our Firm a copy for our perusal FREE OF CHARGE. Once the agreement of sale is signed, it is a binding contract
between the Seller and Purchaser.
What are Suspensive Conditions?
The Sale Agreement must contain “Suspensive Conditions”. These are conditions which must be fulfilled before the transfer process can begin. The most common
suspensive condition is the granting of a bond to the Purchaser. A bond is a loan of money to the Purchaser by a bank to enable him to pay the purchase price of the
property, on security of the property purchased. It records that if the Purchaser fails to make the bond repayments, the bank will be entitled to sell the property to recover
the money it has lent. Another common suspensive condition is that the agreement is subject to the sale of the Purchaser property. This
happens where the Purchaser is selling his property and needs the funds from the purchase price of that property to pay for the new property.
The Seller, in this case, must realise that the transfer of the Purchaser’s property will have to be registered before or simultaneously with the
transfer of the Seller’s property. The conveyancers will then correspond closely with and usually obtain an undertaking the conveyancers who
are attending to the transfer of the Purchaser’s property to pay over the proceeds of that sale on registration.
Cancellation of the Existing Bond
If the Seller still owes money to his bank in respect of his bond, because he borrowed money to buy the property himself, then that bond will have to be cancelled at the
same time the property is transferred to the Purchaser. The Conveyancer must obtain the original title deed to the property from the Seller’s bank, who will be holding the
title deed as security. The Seller’s bank will also let the Conveyancer have the “cancellation figures”, i.e. the exact amount still owing by the Seller under his bond. When
the property is registered in the name of the Purchaser and the Seller’s bond is cancelled, the seller’s bank will be paid the outstanding amount and the balance of the
purchase price will be paid to the Seller. The cost of cancelling the bond is payable by the Seller and is thus deducted from the purchase price before the Seller receives the
balance. The Seller’s bank decides which Conveyancer will attend to the cancellation of the bond. If this is not the same Conveyancer who is attending to the transfer of the
property, then the Transferring Conveyancer must correspond closely with the Cancellation Conveyancer to ensure that the transfer documents and the cancellations
documents are lodged in the Deeds Office together.
Registration of a New Mortgage Bond
If the Purchaser is obtaining a bond to pay the purchase price, this bond will also have to be registered simultaneously with the registration of the
transfer and the cancellation of the Seller’s bond. The bank which is granting the bond will appoint the Conveyancer who is to attend to the
registration of the bond. If this is not the same Conveyancer who is attending to the registration of the property, then the transfer Conveyancer
must cooperate closely with the bond Conveyancer to ensure that the bond and transfer documents are drawn up and lodged at the Deeds Office
together. If the Bank appoints the same Conveyancer who is attending to the transfer, then the process is made much simpler and quicker – because
the bond and transfer documents will be prepared and signed at one office. Louis Bergh & Associates register bonds for all the major banks. The
Conveyancer attending to the transfer will obtain guarantees from the Purchaser’s bank to ensure that the money being lent to the Purchaser is available on the date of
registration of the bond. The various banks have different conditions which must be met before the bond can be registered. These conditions include the signing of various
documents by the Purchaser; obtaining insurance on the building that is erected on the property; obtaining and ceding a life assurance policy; the signing of suretyships;
etc. The Bank will not allow the bond to be registered until all the conditions are met and it is thus in the interest of the Purchaser to take all steps necessary to comply
with the Bank’s requirements.
Transfer of the Property
To enable the Conveyancer to prepare the transfer documents, he will require the Purchaser’s & Seller’s details together with copies of their Identity documents, marriage
certificates, ANC’s, divorce orders, etc. After receiving these documents & the original Title Deed, the Conveyancer will prepare the transfer documents & his proforma
account. The Parties will then be called upon to sign the documents and the Purchaser will be called upon to pay the Conveyancer’s costs. These costs will include:
- The Conveyancer’s fees: these fees are charged in accordance with a tariff issued by the law society.
- Transfer Duty: this is a tax payable to the state on all transfers of immovable property and is calculated as a percentage of the purchase price. No transfer can
be registered until the Deeds Office has proof that the transfer duty has been paid.
- Rates: the purchaser will be liable for rates from the date of registration of the property in his name. Approximately 4 months’ payment in advance will be
required by the Conveyancer to enable him to obtain a rates clearance certificate from the rates department. No transfer can be registered until the Deeds
Office has proof that the rates have been paid. If the property is a sectional title unit, then a levy clearance certificate must be obtained.
The transfer, bond & cancellation documents must be lodged in the Deeds Office at the same time to ensure simultaneous registration. If different
conveyancers are attending to the registration of the Purchaser’s bond, the cancellation of the Seller’s bond and/or the transfer of the property, then all
these conveyancers must collaborate. From date of lodgement, it usually takes 7 working days until date of registration. The parties are notified on the
day of registration and the Seller is paid out on the following day. The parties are furnished with final accounts reflecting the final adjustments between
the parties in respect of rates, levies, occupational rent and other matters.