Explained: The process of transferring property
The conveyancing process transfers ownership of property from one party to another. It start when someone selling a property accepts an offer for it. For first-time home buyers in particular, this process can be complex and quite daunting.
Because there are so many parties involved, a property transfer can quickly become frustrating and drawn-out.
We break it down for you:
1. Concluding the sale
Once the written offer to purchase is signed by both the seller and the buyer, it becomes a sale agreement.
2. Securing a bond (buyer)
The sale agreement (the signed offer to purchase) is often subject to the buyer securing a bond (or mortgage loan) from a bank. When a bank grants the bond, the sale then becomes binding and the transfer starts.
The bank who issued the bond appoints a conveyancer to register it.
3. Repaying an existing bond (seller)
If the seller has a bond on the property for sale, it must be repaid and cancelled.
A conveyancer acting on behalf of the seller starts by giving notice to the bank the bond is with. Once again, the bank appoints its own conveyancer to cancel the bond. At the same time, the bank confirms the repayment amount with the seller’s conveyancer, who drafts a guarantee (letter of undertaking) stipulating that the outstanding payment will be settled by the bank granting the buyer’s bond upon registration.
When this guarantee is received by the bank, a document providing consent to cancel the bond is signed.
4. Gathering documents
One of the first things that the seller’s conveyancer will do is verify the full names, ID numbers and marital statuses of both seller and buyer, and obtain the necessary FICA documents. The conveyancer needs this information to prepare the transfer documents.
Besides the sale agreement, other documents must be signed in order for the transfer to be registered. The buyer must sign documents with the conveyancer registering his or her bond and must pay the bond registration costs. Both buyer and seller must also sign documents prepared by the seller’s conveyancer and the buyer must pay the transfer costs.
5. Paying the purchase price
The seller’s conveyancer collects the purchase price of the property, which is given to the seller after registration.
6. Obtaining clearances
The conveyancer obtains a rates clearance certificate declaring that all rates and municipal charges on the property have been paid up to the date of the transfer. This involves paying any amount outstanding as well as a provision for 2 months’ future billing. The conveyancer pays this and charges it to the seller’s final account. The future billing will mean that there will be a credit on the seller’s municipal account. The conveyancer collects this from the municipality and pays it top the seller.
If the property is in a complex, the conveyancer must also obtain a levy clearance. This is similar to the rates clearance, but some complexes require the conveyancer to apportion the future billing between the buyer and seller.
7. Paying transfer duty
If the price of the property is more than R1M, the buyer must pay transfer duty to SARS. The conveyancer pays this on behalf of the buyer and obtains a transfer duty receipt. If the price is less than R1M, SARS issues a transfer duty exemption certificate. .
He or she must present the rates clearance certificate as well as the receipt of transfer duty to the Deeds Office.
8. Registering the property
The conveyancer lodges all of the relevant documents, including the rates and levy clearance certificates and the transfer duty receipt or exemption certificate at the Deeds Office for registration.
Examiners in the Deeds Office will check that all documents comply with legal requirements. Once they’re happy, and if the buyer has met all the financial requirements, the seller’s conveyancer will register the transaction.
We have a world-class property registration system. When a property is registered in your name, you can be sure that you will have no come backs in respect of outstanding rates and levies.
Making sure that a conveyancer you know and trust is handling the property transfer can mitigate delays and make the process smoother and less stressful for everyone involved. Remember that if you are selling a property, you have the right to appoint a conveyancer of your choice; however, a buyer can stipulate in the offer to purchase that they assume this right, and it is then up to the seller to agree to this clause or not.
We take pride in our handling of property transfers, always endeavouring to avoid delays and the stress they cause. If you’re in the property market and are looking for a conveyancer, call us on 011 347 0300 or email us on email@example.com.