Conveyancing in South-Africa Explained

THE SOUTH AFRICAN LAND REGISTRATION SYSTEM AND CONVEYANCING

Almost all land has been surveyed by a qualified land surveyor which survey is reflected on a surveyor-general diagram. Further to the above, all these surveyed land is registered in the name of a specific owner in the office of the registrar of deeds. The information contained by both the registrar of deeds and the surveyor-general is accessible to the public at a prescribed fee either by attending the officers or the de electronic media.

The process is thus very transparent and gives legal certainty. Ownership cannot be changed without an intricate registration process. The object of the registration process these to protect the registered rights and to give notice to the public of such protection and it was to provide an accessible record that can be used in the event of disputes.

WHAT IS CONVEYANCING?

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.

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 that is signed by both the purchaser and seller (and by the seller's 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 MOST COMMON TERMS OF SALE TO BE CONSIDERED BY THE SELLER (AND PURCHASER)?

WHAT HAPPENS NEXT? THE CONVEYANCING PROCESS

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;
Declarations 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/she will sign a VAT declaration. If VAT is payable on the purchase price no transfer duty will be payable.

BOND DOCUMENTS

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, an 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 the 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.

Transfer Fees

The Conveyancer's fees are suggested 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

If you are selling or buying property in South Africa you can count on Conveyancing24.co.za to offer you a competitive written quotation. Our free written quotation will be fully itemised with no hidden costs. In just a few clicks you can receive a written conveyancing quote.