Once the suspensive conditions are fulfilled, the Conveyancer will be instructed to proceed with The Transfer Process.
Conveyancing describes the legal procedure whereby ownership of immovable property is changed, or in other words, how ownership is "conveyed" from the existing owner (seller) to the purchaser.
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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 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 before signing the agreement. Once the agreement of sale is signed, it is a binding contract between the Seller and Purchaser.
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.
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.
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.
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.
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.
Transfer duty payable are calculated as follow:
R0 – R600 000.00 (exempted)
R600 001.00 – R1 000 000.00 (3%)
R1 000 001.00 – R1 500 000.00 (5%)
R1 500 001.00 and above (8%)
- Rates: the purchaser will be liable for rates from the date of registration of the property in his name. Approximately 3 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 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.
Frequently Asked Questions
- An "offer to purchase", once signed by a purchaser and seller, is an agreement of sale.
- The purchaser applies directly to a bank or through a bond originator for the approval of a mortgage bond.
- The conveyancing attorney requests bond cancellation figures from the current bondholder and apply for the rates clearance figures from the local municipality.
- The conveyancing attorney drafts the documents (affidavits, transfer duty declarations, power of attorney to pass transfer and the deed of transfer).
- Parties sign the transfer documents and pay the costs.
- The conveyancing attorney pays the amount due to the local municipality to obtain a rates clearance certificate.
- The necessary documents are submitted to the Receiver of Revenue to obtain a transfer duty receipt.
- Documents are lodged in the Deeds Office (simultaneously with the bond cancellation and bond documents) for examination; the documents will then come up on preparation and be registered thereafter.
Under ideal circumstances a transfer takes between 50 and 65 days. Various aspects influence the period of transfer of a property.
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- The conveyancer collects the following funds before registration from the seller and purchaser:
From the seller
- Amounts due to the local municipality to obtain a rates clearance certificate.
- Bond cancellation costs (should there be insufficient funds from the proceeds of the sale to pay the bond cancellation attorney directly).
From the purchaser
- Deeds Office registration fees.
- Provision for rates and taxes due to the local authority.
- Transfer duty payable to SARS.
- Professional fees
|Bond Costs||R 0.00|
|Transfer Costs||R 0.00|
|Transfer Duty Costs||R 0.00|
Please note this calculator estimates bond and transfer costs and should be used as a guideline only. Certain additional costs are associated with the registration process which could include inter alia the following: levy/rates clearance certificates, rates, insurance certificate for sectional title and the deeds office search and electronic document preparation fee, amongst other costs. The user shall have no claim and hereby indemnifies van Wyk Attorneys against any liability.
While every effort is made to ensure their accuracy, van Wyk Attorneys cannot be held liable for any loss or damage arising directly or indirectly from the use of this calculator, including any incorrect information generated by the calculator, and / or arising pursuant to your reliance on such information. Under no circumstances, will van Wyk Attorneys be liable for any onsequential loss or damage whatsoever arising from the aforesaid.