What is conveyancing

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What is conveyancing

 

WHAT IS CONVEYANCING?

 

The term "CONVEYANCING" describes the legal process whereby a person, company,

close corporation or trust becomes the registered and lawful owner of fixed

property and ensures that such ownership cannot be challenged. It also encompasses

 the process of the registration of mortgage bonds. (See our brochure on "Mortgage Bonds").

 

WHAT IS A CONVEYANCER?

A Conveyancer is an attorney who also passed the national conveyancing examination

 and by law is the only person who can register fixed property transfers. This is

 necessary to ensure the protection of the various interests the parties have in

 the transaction and to maintain the high standard of land registration.

 

WHO APPOINTS A CONVEYANCER?

The seller usually appoints a Conveyancer to attend to the transfer of fixed

property, although this, like other aspects of a sale agreement, can be varied

 by negotiation between the parties.

 

WHAT IS THE FIRST STEP IN THE SALE OF FIXED PROPERTY?

The first requirement is a valid agreement of sale. This is a written agreement

 which is signed by both the purchaser and seller (and by the sellers’ spouse

 in cases where the parties are married in community of property, or account to

 the laws of a foreign country). A written "Offer to Purchase" signed by a

purchaser and accepted by a seller also constitutes a binding agreement. An oral

 contract for the sale of fixed property is invalid.

 

WHAT ARE THE TERMS OF SALE TO BE CONSIDERED BY THE SELLER (AND PURCHASER)?

 

 The name, address, identity numbers and marital status of both buyer and seller,

 (e.g. married in or out of community of property, or by way of foreign marriage);

 if a company is buying, the capacity of its signatory;

 

• A clear description of the property;

 

• The selling price and manner of payment. If a deposit is payable, that it be

 held in trust by the named Conveyancer or estate agent;

 

That the buyer is to pay all transfer costs and all taxes and other municipal

 charges on the property from the date of possession;

 

The date on which the buyer is to take possession and occupation; the date on

 which transfer is to take place;

 

That the property is sold "voetstoots" or "as is" (in other words without any

 guarantee by the seller regarding visible or hidden faults);

 

The name of the Conveyancer who will attend to the transfer;

 

That commission is due to a named estate agent, and the amount thereof; that

 the specific agent introduced the buyer to the property; or was the cause of sale;

 

That if occupation is taken before the date of transfer, the buyer will pay

 occupational interest or rental from that date. The amount and manner of payment

 must be stated;

 

 If a borer-free certificate has to be obtained, who must pay for the inspection

 and any work required;

 

Who will pay for an "electrical certificate" and any work required;

 

That no amendment to the agreement of sale will be valid unless it is in writing

 and signed by both parties;

 

 Where the sale is subject to the purchaser obtaining a loan, the amount of such

 loan, the institution to whom he/she may apply and the date by which the loan must

 be approved;

 

 Where the sale is subject to the sale of the purchaser's property, a description

 of the property, the amount for which it is to be sold and the date by which it must

 be sold.

 

Any special condition which has been inserted either at the instance of the buyer or

 the seller must be carefully checked. The seller may wish to ensure that certain

items are not regarded as immovable, forming part of the property sold. He must

check to see that these have been properly listed. It is usually wise to obtain

legal advice on special conditions.

 

WHAT HAPPENS NEXT?

The Deed of Sale is handed to the appointed Conveyancer, who will draft the necessary

 documents. Both the seller and the purchaser will be required to call at the offices

 of the Conveyancer to sign the necessary documents. The documents to be signed

include the following:

 

A 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 Marital Status, Identity Number and Insolvency

Both purchaser and seller must depose to an affidavit wherein they state their marital

 status, identity number and confirm their solvency.

 

Transfer Duty and Value Added Tax (VAT) Declaration

Transfer duty is a form of tax payable, normally by the purchaser, to the Government

and is calculated on the value of the property. Both the purchaser and seller have

to sign transfer duty declarations to be furnished to the Receiver of Revenue in

which they affirm the purchase price to be paid. VAT is not usually payable on

transactions between private purchasers and sellers but will be if the seller is

 a registered vendor under the VAT Act. Where the seller is registered as a vendor,

 he will sign a VAT declaration. If VAT is payable on the purchase price no transfer

 duty will be payable.

 

Bond Documents

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. To enable

 the Conveyancer appointed by the financial institution to prepare the necessary

documentation, the purchaser must submit his/her identity document, marriage certificate

 and, if applicable, Antenuptial Contract to the Conveyancer concerned.

 

WHAT ARE THE COSTS INVOLVED?

The costs relating to the transfer of the fixed property fall into three categories.

 

Transfer Duty or VAT

Where transfer duty is payable, a formula is applicable based on the value of the property.

 Transfer duty normally constitutes the majority of the costs; sometimes 90% or more of

the costs of transfer, and is payable by the purchaser.

 

Rates and Levies

Whilst not a cost of transfer, rates and levies must be paid in full on date of transfer.

 A pro rata (normally to date of possession) portion of the charges payable on the fixed

 property to the relevant local authority or the levies 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. The purchaser is normally liable for payment thereof

together with VAT thereon.

 

Bond Registration Costs

Where a bond is to be registered, stamp duty is payable to the Receiver of Revenue,

 the amount whereof depends on the amount of the bond. The Conveyancer's fee is

calculated on a sliding scale based on the amount of the bond and is payable by

the purchaser to the Conveyancer who registers the bond together with VAT thereon.

 

Bond Cancellation Costs

If the seller has a bond registered over his/her property, this must be cancelled

 on transfer and the seller is responsible for payment of the Conveyancer's fee

for cancellation together with VAT thereon. Once the documents have been signed

by the purchaser and the seller, and the transfer costs, transfer duty and rates

 and levies have been paid, the Conveyancer may proceed with the registration of

 transfer of the property in the Deeds Office

Click here to download a comprehensive Offer to Purchase/Deed of Sale/Koopkontrak van grond

Click here for a writer conveyancing quotation

For further information please contact us on:

Telephone:     0870010733 / 0518

Fax:               0862764377

Cell:               0828805646

Postal:            Po Box 14382, Hatfield 0028

E-mail:            This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Website    http://www.louwrenskoen.co.za

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