The term "CONVEYANCING" describes the legal process whereby a person, company, close corporation or trust becomes the registered and lawful owner of fixed property and ensures that such ownership cannot be challenged. It also encompasses the process of the registration of mortgage bonds. (See our brochure on "Mortgage Bonds").
WHAT IS A CONVEYANCER?
A Conveyancer is an attorney who also passed the national conveyancing examination and by law is the only person who can register fixed property transfers. This is necessary to ensure the protection of the various interests the parties have in the transaction and to maintain the high standard of land registration.
WHO APPOINTS A CONVEYANCER?
The seller usually appoints a Conveyancer to attend to the transfer of fixed property, although this, like other aspects of a sale agreement, can be varied by negotiation between the parties.
WHAT IS THE FIRST STEP IN THE SALE OF FIXED PROPERTY?
The first requirement is a valid agreement of sale. This is a written agreement which is signed by both the purchaser and seller (and by the sellersâ€™ spouse in cases where the parties are married in community of property, or account to the laws of a foreign country). A written "Offer to Purchase" signed by a purchaser and accepted by a seller also constitutes a binding agreement. An oral contract for the sale of fixed property is invalid.
WHAT ARE THE TERMS OF SALE TO BE CONSIDERED BY THE SELLER (AND PURCHASER)?
The name, address, identity numbers and marital status of both buyer and seller, (e.g. married in or out of community of property, or by way of foreign marriage); if a company is buying, the capacity of its signatory; A clear description of the property; The selling price and manner of payment. If a deposit is payable, that it be held in trust by the named Conveyancer or estate agent;
The date on which the buyer is to take possession and occupation; the date on which transfer is to take place;
The name of the Conveyancer who will attend to the transfer;
That commission is due to a named estate agent, and the amount thereof; that the specific agent introduced the buyer to the property; or was the cause of sale;
That if occupation is taken before the date of transfer, the buyer will pay occupational interest or rental from that date. The amount and manner of payment must be stated;
If a borer-free certificate has to be obtained, who must pay for the inspection and any work required;
Who will pay for an "electrical certificate" and any work required;
That no amendment to the agreement of sale will be valid unless it is in writing and signed by both parties;
Where the sale is subject to the purchaser obtaining a loan, the amount of such loan, the institution to whom he/she may apply and the date by which the loan must be approved;
Where the sale is subject to the sale of the purchaser's property, a description of the property, the amount for which it is to be sold and the date by which it must be sold.
Any special condition which has been inserted either at the instance of the buyer or the seller must be carefully checked. The seller may wish to ensure that certain items are not regarded as immovable, forming part of the property sold. He must check to see that these have been properly listed. It is usually wise to obtain legal advice on special conditions.
WHAT HAPPENS NEXT?
The Deed of Sale is handed to the appointed Conveyancer, who will draft the necessary documents. Both the seller and the purchaser will be required to call at the offices of the Conveyancer to sign the necessary documents. The documents to be signed include the following:
A Power of Attorney to Pass Transfer
This document must be signed by the seller as it empowers the Conveyancer to transfer the property on his/her behalf.
Declaration in respect of Marital Status, Identity Number and Insolvency. Both purchaser and seller must depose to an affidavit wherein they state their marital status, identity number and confirm their solvency.
Transfer Duty and Value Added Tax (VAT) Declaration Transfer duty is a form of tax payable, normally by the purchaser, to the Government and is calculated on the value of the property. Both the purchaser and seller have to sign transfer duty declarations to be furnished to the Receiver of Revenue in which they affirm the purchase price to be paid. VAT is not usually payable on transactions between private purchasers and sellers but will be if the seller is a registered vendor under the VAT Act. Where the seller is registered as a vendor, he will sign a VAT declaration. If VAT is payable on the purchase price no transfer duty will be payable.
If the purchaser obtains a loan from a financial institution, the lender will require the purchaser to register a bond over the fixed property to secure the loan. To enable the Conveyancer appointed by the financial institution to prepare the necessary documentation, the purchaser must submit his/her identity document, marriage certificate and, if applicable, Antenuptial Contract to the Conveyancer concerned.
WHAT ARE THE COSTS INVOLVED?
The costs relating to the transfer of the fixed property fall into three categories.
Transfer Duty or VAT
Where transfer duty is payable, a formula is applicable based on the value of the property. Transfer duty normally constitutes the majority of the costs; sometimes 90% or more of the costs of transfer, and is payable by the purchaser.
Rates and Levies
Whilst not a cost of transfer, rates and levies must be paid in full on date of transfer. A pro rata (normally to date of possession) portion of the charges payable on the fixed property to the relevant local authority or the levies payable to the Body Corporate in the case of a sectional title unit.
The Conveyancer's fees are prescribed by a tariff and are calculated on a sliding scale based on the purchase price. The purchaser is normally liable for payment thereof together with VAT thereon.
Bond Registration Costs
Where a bond is to be registered, stamp duty is payable to the Receiver of Revenue, the amount whereof depends on the amount of the bond. The Conveyancer's fee is calculated on a sliding scale based on the amount of the bond and is payable by the purchaser to the Conveyancer who registers the bond together with VAT thereon.
Bond Cancellation Costs
If the seller has a bond registered over his/her property, this must be cancelled on transfer and the seller is responsible for payment of the Conveyancer's fee for cancellation together with VAT thereon. Once the documents have been signed by the purchaser and the seller, and the transfer costs, transfer duty and rates and levies have been paid, the Conveyancer may proceed with the registration of transfer of the property in the Deeds Office Click here to download a comprehensive Offer to Purchase/Deed of Sale/Koopkontrak van grond Click here for a writter conveyancing quotation
For further information please contact us on:
Telephone: 012 343 0267
Fax: 012 343 0269
Postal: Po Box 14382, Hatfield 0028
Park street Law Chambers
Park Street 755
- Hits: 1293