1. Q - What is the difference between a transfer and a bond?
A - When we speak of transfer, we are talking about the formal act of registering the transfer of ownership from the seller to the buyer.
A bond is a form of security that gets endorsed against the title of the property in question to ensure that the financial institution that is providing the finance to the purchaser, has a secured right over the property if for any reason the purchaser defaults on repayments.
Registration takes place in the Deeds Registry.
2. Q - When will I receive the proceeds of my sale?
A - The conveyancer who attends to registration will reconcile all finances after payments clear in their Trust account. Payment of the proceeds of sale can be expected within a reasonable time-period i.e. 24 hours after registration.
3. Q - How long will registration of my transfer take?
A - This is the age old question and regrettably, there is no easy answer as each matter is dealt with on a case by case basis. A transfer could take between 6 to 12 weeks from the date of receipt of the instruction to pass transfer as clearances are required from the City Council. Furthermore, depending on whether we are dealing with sectional title scheme and/or or Home owners associations, clearances will also be required from the managing agents of such schemes.
Given that most purchasers obtain mortgage finance to fund their purchase and that the bond process also takes time, this could cause a delay in transfer as most financial institutions will not allow lodgment of bond documents to take place unless the documents have been checked by their staff internally.
4. Q - How are conveyancing fees calculated?
A - Conveyancing costs are not tariff based i.e. there is no firm rule that dictates the fees that conveyancers are obliged to charge however the Law Society has set down a guideline of fees that it deems as fair. This guideline is based on property/bond values in that the higher the property/bond value, the higher the fee. Most conveyancers have subscribed to this guideline.
Property Transfer Guide
Parties involved in a single Transfer
Typically there are 3 acts that take place simultaneously at the Deeds Office:
Transfer of ownership of the property
Cancellation of the seller’s existing bond
Registration of the purchaser’s existing bond.
Consequently, 3 firms of attorneys could potentially be instructed to attend to the above. They are:
Is responsible for effecting transfer of ownership of the property to the purchaser. The Transfer attorney acts on behalf of the seller and the seller has the right to nominate the Transfer Attorney.
Bond Cancellation Attorney
Is responsible for the cancellation of the existing mortgage registered against the property. The Bond Cancellation Attorney acts on behalf of the existing bond holder i.e. the Bank and therefore is instructed by the said bondholder
Is responsible for the registration of the mortgage bond which facilitates payment of the purchase price.
The Bond Attorney acts on behalf of the bondholder and therefore is instructed by the bondholder. However, the purchaser may nominate a specific Attorney to attend to this transaction, provided said Attorney is on the panel of Attorneys of the said bondholder.
Documents required to be lodged to effect Transfer
In a typical sale, the following documents are required to be lodged at the deeds Office:
Original Title Deed
Usually lodged by the Bond Cancellation Attorney as the Bank retains the Deed/s in safe custody by virtue of their security.
This becomes the new Title Deed once registration takes place
Rates Clearance Certificate
The seller is required to pay municipal rates, taxes and services for at least 4 months in advance in order to obtain a clearance certificate.
The seller is entitled to a refund for all the monies prepaid from the date of registration. It is important that the purchaser opens their own water and electricity account as soon as registration occurs to ensure that the correct party is billed for consumption as the seller could potentially have a claim against the purchaser for compensation of his surplus funds being allocated against the purchaser’s usage.
If the Property is within a Sectional Title Scheme or has a Homeowners Association governing the complex, levies will also need to be paid up in advance in accordance with the respective individual requirements of the Body Corporate of the Scheme/ Homeowner’s Association.
Transfer Duty Receipt
Transfer duty is payable to the Receiver of Revenue on all acquisitions of immovable property save that first R1,000,000.00 of the purchase price is exempt. Any amount exceeding the sum R1,000,000.00 up to R1,375,000.00 is levied at 3% , and any amount exceeding the latter amount up to R1,925,000.00 is levied at 6%, and any amount exceeding the latter amount up to R2,475,000.00 is levied at 8% and any amount exceeding the latter amount up to R11,000,000.00 is levied at 11% and any residue thereafter is levied at 13%.