20 Feb Transfer of property – a basic guide to ‘conveyancing’
Conveyancing is the term to describe the legal transfer of immovable property from one owner to another.
After the offer to purchase has been signed and the bond approved, three different sets of attorneys are appointed to handle the existing bond cancellation (cancellation attorneys, who are appointed by the seller’s existing bank), the new bond registration (bond attorneys, who are appointed by the purchaser’s new bank), and the property transfer itself (transferring attorneys appointed by the seller). The transferring attorneys are specified in the offer to purchase and oversee the entire process.
Upon payment of the transfer duty, documents are lodged in the Deeds Office. Registration – which transfers ownership legally – should occur 8 to 10 working days later.
- Step 1: Once the seller has signed the Offer to Purchase, the purchaser pays the deposit and applies for finance for the balance. The bank or financial institution appoints a bond attorney to draw up the bond documents for the purchaser to sign. The purchaser pays the bond attorney’s fees. The bond attorneys provide guarantees for payment of the balance of the purchase price.
- Step 2: The transferring attorneys obtain FICA (ID and proof of residence) of both parties and apply for figures to cancel the seller’s bond (from the bank). The bank instructs cancellation attorneys and provides them with the original title deed. If there is no bond to cancel, the seller should give the title deed to the transferring attorney.
- Step 3: The transferring attorney drafts the necessary documents and the purchaser and seller sign. The transferring attorney then requests figures from the municipality to ensure that all the seller’s rates and taxes are paid up to date to acquire a clearance certificate issued by the municipality. The seller pays the current rates and advance rates for up to 60 days to the transferring attorney, who pays the municipality. The seller pays for and arranges the necessary compliance certificates (beetle, electrical, gas, plumbing).
- Step 4: The purchaser pays transfer duty to SARS (a tax levied on property transfers over R900,000) as well as the transferring attorney’s fees. The transferring attorney pays the transfer duty on behalf of the purchaser.
- Step 5: All three attorneys lodge the required documents at the Deeds Office simultaneously. It takes 8 to 10 working days for these to be examined and, provided there are no changes, the transaction is registered. The purchaser is now the rightful owner of the property!