The conveyancing process is quite daunting and complicated for the first-time home buyer whose unfamiliar with the process, the parties involved and who pays the costs. We have simplified the process for you below so that you’ll understand exactly what it entails.
WHAT IS CONVEYANCING?
The term “conveyancing” describes the legal process whereby a person becomes the registered and legal owner of immovable property and ensures that his ownership cannot be challenged.
A conveyancing transaction involves a number of steps that usually begin with the deed of sale and continue through to the registration of transfer of ownership in the Deeds Office and the payment of the purchase price to the seller.
WHAT IS A CONVEYANCER?
A qualified Conveyancer, i.e. an attorney who has passed the National Conveyancing Examination, is the only person who can register property transfers. It is important to ensure that the Conveyancer has the necessary experience and expertise to fulfil their mandate. A good Conveyancer will clearly explain the process so that the parties understand exactly what it involves, the documents required in terms of the Financial Intelligence Centre Act (FICA), why certain documents are required and what documentation you are signing.
WHO APPOINTS A CONVEYANCER?
It is customary for the Seller to appoint the Conveyancer, however, like other aspects of a sale agreement, this can be varied by negotiation between the parties.
WHAT IS THE FIRST STEP IN THE SALE OF THE PROPERTY?
The first requirement is a valid agreement of sale. This is a written agreement signed by both the purchaser and seller (and by the spouses in cases where the parties are married in community of property). Most agreements provide that terms and conditions which are not included in the written agreement shall not be binding on the parties.
WHAT HAPPENS NEXT?
The Deed of Sale is handed to the appointed Conveyancer. To enable the Conveyancer to prepare the necessary documentation, he/she will have to obtain the title deeds, the parties identity documents, marriage certificates and, if applicable, antenuptial contracts. The Conveyancer will also require the proof of address and income tax numbers (if applicable), in terms of FICA regulations.
Both the seller and the purchaser will be required to sign the following documents to enable the Conveyancer to effect transfer.
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 status- Both parties must depose to affidavits wherein they state their marital status, identity number and confirm their solvency
Transfer Duty and Value Added Tax (VAT) Declaration- Both the parties have to sign these declarations wherein they affirm the purchase price to be paid. Where the seller is a registered VAT vendor then VAT is payable on the purchase price and no transfer duty will be payable.
If the seller has a bond to be cancelled, then the Conveyancer requests cancellation figures and the Title Deed from the Bank, if applicable. 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.
The Conveyancers shall also request figures from the municipality to obtain the Rates Clearance Certificate. Further, the Conveyancer collects the purchase price to account to the Seller when registration takes place.
WHAT ARE THE COSTS INVOLVED?
When purchasing a property, the purchaser pays various transfer fees, which include and are not limited to conveyancing fees, deeds office registration fees and transfer duty, which the Conveyancer pays to SARS.
Transfer Duty or VAT
Where transfer duty is payable, a formula is applicable based on the value of the property.
Rates and Levies
A pro rata portion of the rates charged on the property is payable to the relevant local authority and levies are payable to the Body Corporate, in the case of a sectional title unit.
Fees
The Conveyancer’s fees are prescribed by a tariff and are calculated on a sliding scale based on the purchase price, but it must be noted that our conveyancing fees are negotiable. The tariff is merely a guideline.
CERTIFICATES OF COMPLIANCE
In terms of legislation, an electrical compliance certificate must be obtained with each transfer of immovable property. There is no requirement in Law for a seller to have a certificate confirming that the property is free of wood borer or termites. It is, however, common in coastal areas where wood borer is prevalent, to include an obligation on the seller to provide a certificate confirming that the property is free of woodborer. Generally, the seller is responsible for payment of these certificates, but the parties can agree otherwise.
Once the documents have been signed by both parties and the transfer costs, transfer duty, rates and levies have been paid, and the Conveyancer is in possession of Transfer Duty Receipt and Rate Clearance Certificate, then the Conveyancer may proceed with the registration of transfer of the property in the Deeds Office
WHAT HAPPENS AT THE DEEDS OFFICE?
The Conveyancer will lodge the prepared documents with the Deeds Office for registration. If a mortgage bond is to be registered or cancelled then the bond registration or cancellation documents will be lodged simultaneously with the transfer documents.
The examiners in the Deeds Office will then examine the documents to ensure they comply with all the relevant legislation and regulations, after which the transfer can be registered. On registration, the purchaser becomes the lawful owner of the property. The title deed reflecting ownership will be released to the owner, unless a mortgage bond has been registered, in which case the title deed will be retained by the bond holder as part of its security.
HOW LONG DOES THE PROCESS TAKE?
As there are several parties and institutions involved, delays are possible at any stage. Provided everything runs smoothly, transfer should take approximately 6 to 8 weeks from the time the Conveyancer receives the Sale Agreement. Unforeseen difficulties could extend this period.
If you have any questions, please don’t hesitate to contact us and we’ll gladly talk you through it. We’re here to make your property transfer as smooth and expeditious as possible.
BY: FATIMA SALAJEE