Transfer and Registration Process of Property in South-Africa
Caveat Emptor (A Latin phrase for "let the buyer beware." The term is primarily used in real property transactions. Essentially it proclaims that the buyer must perform their due diligence when purchasing an item or service.) Remember that for most individuals this will be the
• Before signature of an Offer to Purchase the purchaser should verify the following:
Nature of Title, Full, Sectional Title or Homeowners Association.
Actual size and layout of the property. Acquire a copy of the Surveyor General diagram pertaining to the property,
Conditions as reflected the Title Deed registered in the office of the registrar of Deeds,
Zoning, coverage and allowed usage of the property as reflected in a zoning certificate. Acquire a copy of the zoning certificate from the municipality or consult a Town Planner,
Market related value of the property. Perceived versus actual value of the property. Have a desktop valuation done over the property,
If you are buying the property to let it out consider the market related rental you can expect and calculate management and maintenance costs,
Especially beware of paying more than market value for improvements that represents an over capitalisation on the property. Remember that you will probably not recover the value of the over capitalisation on the property when selling the property,
Restrictive or onerous conditions on the property,
Servitudes or restrictive conditions applicable to the property,
Lease agreements, duration and current rental income of the lease if applicable. A lease will have preference over the sale of the property (Huurgaat voor koop),
Illegal occupation of the property,
Current Levies, Taxes, Municipal Rates. Special levies. Intended special levies.
Costs of acquiring the property. Cost Calculator. Get a written quotation from the Transferring and Bond registration Attorneys. Remember that their fees are negotiable,
Can you really afford the property? Affordability. Consult with your financial institution or Bond Originator,
Land claims over the property especially agricultural land.
Sectional Title. Copy of financial statements, credentials and reputation of Body Corporate manager,
Consult with a Conveyancer (qualified property attorney) to draft the offer to purchase or to assist you with amending the offer to protect your interests.
Location, accessibility and layout of the property,
• Entering into a Deed of Sale.
The Seller signs the offer to purchase. Once signed the Offer to Purchase becomes a binding contract (Deed of Sale). Usually the purchaser makes an offer to purchase, which offer to purchase on acceptance becomes a binding contract between the parties. Click here to download a free comprehensive offer to purchase with a discussion and explanation of the basic conditions of an agreement of sale of fixed property. The contract must be in writing and signed by both the seller and purchaser to be valid and binding. Once signed the deed of sale must immediately be faxed or delivered to the conveyancing attorneys (transferring attorneys). Click here for a list of information and documents that must preferably be supplied to the conveyancing attorneys with the deed of sale.
• Payment of deposit, securing balance of the purchase price and investment of deposits.
The purchaser pays the deposit (if applicable) to the conveyancing attorneys on demand or in terms of the contract. Depending on the amount the deposit or purchase price is invested with the written consent of the purchaser at a Financial Institution. The interest usually accrues to the purchaser.
• Applying for Finance from a financial institution. (Bond origination or directly through your financial Institution). If the contract is subject to the purchaser acquiring finance the purchaser applies for finance in person or through the use of a mortgage originator. Click here for the information and documentation needed to apply for finance or if we need to assist you in this regard. The financial institution grants an approval in principal (A.I.P), values the property and instructs the bond attorneys.
• Applying for Cancellation Figures
The transferring attorneys apply for cancellation figures from the Sellers current bondholder (if any). It is essential that they have your bond account number to do this. Notice in terms of
• Valuation of the Property.
The buyer's Bank sends out a valuator to assess the value of the property
the buyer intends to mortgage. The Bank may also require that the property
be inspected for beetle infestation (coastal properties).
• Obtaining an Electrical Compliance Certificate.
The Seller must obtain an Electrical Certificate of Compliance, and supply it to the Transferring Attorneys. The Financial Institution that grants the new Bond over the property will also require such an certificate.
• Final Grant of Finance
The buyer's home loan is granted, subject to the valuation and credit approval the Bank advises the Bond Attorneys to register a Bond. Panel Attorneys discussion.
• Request rates Clearance Certificate.
The Transferring Attorneys also request a Clearance Certificate for the Rates and Taxes from the Local Municipality.
• Drafting Transfer Documentation.
The Transfer documents are then drawn up by the Transferring Attorneys once all the information in steps 9 & 10 is obtained. The Transfer Documents include:
The Transfer Duty or VAT application to the South-African Revenue Service.
The Rates & Taxes Clearance Certificate. (from the Local Municipality) or the Levy.
Clearance Certificate (from the Body Corporate).
The Consent of the Bondholder (Bank which holds the current bond)
to cancel the current bond.
Consents required in terms of conditions in the Title Deed
(i.e. a right of first refusal waived by the interested party).
• Requesting Guarantees
The Registering (Bond) Attorneys advise the Transferring Attorneys of the amount available for guarantees (the amount of the new bond over the property).
• The Transferring Attorneys then advise the Cancellation Attorneys to
cancel the seller's bond, which is done upon receipt of the guarantees.
• Once the Transferring Attorneys receive the Title Deed and Cancellation Figures from the seller's bank, they send a copy of the Deed of Transfer and guarantee requirements to the Registering (Bond) Attorneys.
• Payment of Transfer Costs.
Transfer Costs, with which the Transferring Attorneys
pay the Rates and Taxes and Transfer Duty to the Receiver of Revenue and
a Transfer Duty Receipt is issued.
• Signature of Bond Registration Documentation
The buyer's Bond Account and Supporting Documentation are prepared by the Registering (Bond) Attorneys.
• Signature of Transfer Documentation.
The Purchaser and Seller sign the Supporting Documentation and pays the Bond Registration Costs to the Registering (Bond) Attorneys. The Transfer Documents are signed by Purchaser and Seller,
with the Transferring Attorneys
The necessary guarantees are prepared by the Registering (Bond) Attorneys and forwarded to the Transferring Attorneys, who prepare the bond documents for lodgement with the Deeds Office.
The Transferring Attorneys then forward the guarantees to the
Cancellation Attorneys, who get consent from the Bank (which currently
has a bond over the property), to cancel the Seller's Bond.
• Lodgement and Tracking in the office of the Registrar of Deeds
Once all the documentation is signed and all the costs are paid, the buyer's
new bond documents, the transfer of the property (into the buyer's name) documents and the cancellation of the seller's bond documents are prepared
by the respective attorneys and lodged in the Deeds Office - simultaneously.
• The Registration Process in the Deeds Office
The Deeds Office takes approximately 7-10 working days to check all the documentation before they are ready for registration by all the attorneys on
the same day.
• Preparation (Prep)
• Registration of the documentation in the office of the Registrar of Deeds on Registration.
• Payment of Guarantees and Final Statement of Account
The Bank pays out the loan in accordance with the guarantees issued and the estate agent is paid the commission.
For further information or to book a consultation please contact us on:
We can be contacted on:
Telephone: 012 343 0267
Fax: 012 343 0269
Postal: Po Box 14382, Hatfield 0028
Park street Law Chambers
Park Street 755