The registration of property process
CONCLUDING A WRITTEN DEED OF SALE
The Act prescribes certain information to appear in a deed of sale:
- parties to the agreement;
- price as agreed upon and
- property description.
Supplemental information includes:
- method of payment of purchase price;
- details of financial arrangements to be made;
- date of occupation and occupational interest payable;
- date of passing of risk concerning the property; liability for payment of transfer fees;
- details of agents commission and liability for payment thereof and other terms as agreed upon by the parties on conclusion of the deed of sale.
NOTE: Ownership does not pass on the date of the agreement, but only later on date of registration. Prior to registration the purchaser merely has a personal right to claim transfer of the property.
APPOINTMENT OF THE CONVEYANCER
According to the Common Law, it is the seller's prerogative to appoint a conveyancer of his choice to attend to the registration of the transfer of his immovable property. Keep in mind however
that several attorneys may be involved as one such transaction usually entails the following simultaneous actions:
Transfer of property from seller to purchaser;
Cancellation of sellers existing bond and
Registration of purchasers new bond.
Different conveyancers therefore attend to the various transactions in this process. They are referred to as the transferring attorney (who handles the transfer), the cancellation attorney (who represents the financial institution of the seller existing bond) and the bond attorney (who effects the registration of the new bond in the name of the purchaser). For each of these different transactions there are different fees and expenses payable, respectively linked to the purchase price and to the amount of the bond to be registered.
The estate agent or seller provides the conveyancer with the deed of sale. The conveyancer then proceeds to gather the necessary information and documentation to proceed with the registration process.
This includes:
- full names, identity numbers and marital status of all parties;
- the existing title deed of the property;
- details of the cancellation figure regarding the bond (being the outstanding balance owed on the seller's bond, including capital and interest);
- the outstanding rates and taxes/levies, which are payable monthly;
- the means by which the purchaser intends to finance the transaction, through which financial institution and the amount of the loan and
- information obtained from the Deeds Office regarding restrictions noted against the property or against any party that may influence the transaction.
DRAFTING AND SIGNING OF DOCUMENTS
After fulfilment of all suspensive conditions e.g. granting of a loan and the obtaining of all relevant information, documents are prepared for signature by all the parties.
Transfer documentation
Power of Attorney by which the seller empowers a conveyancer to appear before the Registrar of Deeds on his behalf to register the deed of transfer;
Insolvency and Marital Status Declarations by both parties to the transaction and
Transfer Duty Declarations by both parties in terms of which details regarding the purchase price are declared to the Receiver of Revenue together with the payment of transfer duty.
Bond documentation
Where a part of the purchase price is being financed by means of a loan, the purchaser will sign documentation at a conveyancer acting on behalf of a financial institution, for the registration of the
bond over the property as security for the loan. The required documentation is usually the following:
Power of Attorney to pass the bond whereby the purchaser empowers a conveyancer to register the bond in favour of the financial institution who granted the loan;
Insolvency and Marital Status Declarations and
Standard documentation of the financial institution. Each financial institution has its own set of required documentation to be signed before registration.
STATEMENT OF ACCOUNT
The statement of account regarding the transfer usually consists of
the following:
- Transfer duty: This is a form of tax payable to the Government, calculated at a specified rate on the value of the property.
- If however, VAT has been included in the purchase price, no transfer duty is payable;
- Rates and taxes/levies: Payable in advance to the Local Authority or in the case of a sectional title unit, payable to the Body Corporate;
- Transfer fees: Prescribed by the Regulations and calculated
- according to the value of the property;
- Provisions for postages and disbursements;
- VAT: On services rendered and
- Deeds Office Registration fees: Payable per registration.
The statement of account regarding the bond registration usually consists of the following:
Fees of the financial institution: This can include inspection fees, initiation costs, administration costs and other costs;
Bond fees: Prescribed by the Regulations, payable to the conveyancer and calculated on the amount of the bond to be registered;
VAT: On services rendered;
Provisions for postages and disbursements and
Deeds Office Registration fee: Payable per registration.
FINANCIAL ARRANGEMENTS
The conveyancer is responsible to attend to a variety of financial arrangements during the registration process for example:
Collection of all costs as payable per statement of account;
Payment of transfer duty to the Receiver of Revenue and the obtaining of a transfer duty receipt;
Payment of rates and taxes/levies and obtaining a clearance certificate from the Local Authority or a levy certificate from the Body Corporate. (It is prescribed by law that no account for rates and taxes/levies payable by the existing owner shall be in arrears on the date of transfer);
Guarantees are requested from the purchasers financial institution for the available amount of the loan, for the payment of the outstanding amount of the purchase price. (A guarantee is an undertaking by a financial institution to pay the amount as set out therein on date of registration);
Arranging for the cancellation of the existing bond of the seller through the issuing of guarantees for the amount outstanding on the bond and
Arranging payment of the balance purchase price.
The full amount of the purchase price must be available, (except where the deed of sale states otherwise) either by means of a guarantee or a cash
deposit before registration.
In accordance with the deed of sale, you may request that all deposits made by yourself must be invested in an interest bearing account in your favour, for payment on date of registration.
THE DEEDS OFFICE
Conveyancers attending to the various aspects of the transaction liaise with each other on a continuous basis to arrange simultaneous lodgement and registration of all the documents at the Deeds Office. The Deeds Office is a Government Registration Office and keeps record of all real estate transactions and rights regarding such properties.
There are offices in Pretoria, Johannesburg, Bloemfontein, Cape Town, Kimberley, Pietermaritzburg, Nelspruit and Vryburg.
Each set of lodged documents is examined by Deeds Office officials to ensure that it complies with all relevant acts and regulations. Afterwards it is made available to the various conveyancers for
registration in the presence of the Registrar of Deeds. The linked set of documentation is registered simultaneously.
REGISTRATION
Registration renders the purchaser the registered owner of the property and his real rights are thus protected against third parties.
All financial arrangements are usually finalized within 24 hours after registration. This entails the payment of guarantees by the purchasers financial institution, payment of the amount of the cancellation figure to the existing bondholder, payment of the balance purchase price to the seller and the setting of accounts with all parties.
HOW LONG DOES THIS PROCESS TAKE?
It is difficult to predict the exact duration of a transaction, the reasons being:
a. The deed of sale may be subject to suspensive conditions eg:
- the sale and conclusion of registration of the purchaser's property within a certain time period and
- the obtaining of a loan within a specified time period, before which the transaction does not proceed.
b. Government Offices and other institutions require certain time periods to deliver documentation or issue certificates necessary in the process e.g.:
- clearance certificates from the Local Authority or the Body Corporate (6-10 days);
- transfer duty receipts from the Receiver of Revenue;
- guarantees from the Financial Institutions (7-21 days);
- consents to cancellation from the existing bondholders (7- 14 days) and
- Deeds Office for registration (8-15 days).
Unforeseeable problems: the fact that so many institutions are involved in the registration process adds to unexpected delays (for example postal delays or unusual conditions of title which may prevent timeous finalisation of the transaction).
All the above time periods may vary, but as a rule the usual duration of the registration process is 24 to 35 days after the confirmation of all financial arrangements.