Conveyancing Process Overview

The property transfer (a.k.a. conveyancing) process can be tricky and time consuming. So here is a conveyancing overview to help you better understand and navigate the process.

First things first – the sale agreement

The first thing you will need in place is a sale agreement (or offer to purchase). This is a contract that governs the sale of the property and a copy thereof will be required by the Deeds Office. This agreement is the first document given to the transfer attorneys.

Getting the transfer process started:

Once the sale agreement has been accepted and signed by both parties, the transfer process begins. You will need to furnish the attorneys who will be handling the transfer (known as the transfer attorneys) with the following documents:

• Copy of your identity document;

• Copy of your marriage certificate;

• Proof of residence;

• Proof of income tax number.

If you are a juristic entity (company, closed corporation or trust), you will need to hand over the following:

• Juristic entity's registration documents;

• Proof of registered address;

• Income tax number;

• VAT number if applicable;

• A copy of the representative's identity document.

If you are the purchaser you will have to let the transfer attorneys know whether there is a mortgage bond registered over the property and if so, through which institution. This mortgage bond will have to be cancelled. The cancellation attorneys will be handling the cancellation of the bond. If you are the purchaser, you will have to let the transfer attorneys know how you are financing the purchase. Should a new bond be registered, you will have to let them know through which institution. If you know who the bond attorneys will be, their details will also have to be given to the transfer attorneys.

If there is both a cancellation of a bond and a registration of a new bond, there will in total be three transactions (cancellation, transfer, registration of new bond). All three these transactions will have to be registered simultaneously in the Deeds Office.

Transfer documents and guarantees:

Once you have furnished the transfer attorneys with all the required documents and information, they will draft the transfer documents. They will also correspond with the cancellation or bond attorneys. If a bond is being cancelled, cancellation figures will have to be obtained to see what is still outstanding on the bond (which will then be paid with the proceeds of the sale). They will also then receive guarantee requirements from the cancellation attorneys.

The transfer attorneys will be responsible for having a guarantee issued by their bank in favour of the cancellation attorneys. A guarantee confirms that there is enough money in the purchase price to cover the cancellation figures and further confirms that the cancellation figures will be paid upon registration.

If a new bond is to be registered, the bond attorneys will be responsible for issuing the guarantees. They will have to furnish two guarantees: one for the cancellation attorneys covering the cancellation figures, and one for the transfer attorneys which will be for the remainder of the purchase price (after the cancellation figures have been deducted). If there is no cancellation, then the transfer attorneys will receive a guarantee for the full purchase price.

No new bond to be registered – cash transaction:

If there is no new bond to be registered, the purchaser must pay the full purchase price into the transfer attorneys’ trust account. The purchaser can then give permission to the transfer attorneys to invest the purchase price in an interest bearing account as provided for in terms of the Legal Practitioners Act. The interest on the account is in favour of the purchaser.

Once the transfer documents have been drafted by the transfer attorneys, they will contact the seller and purchaser to come and sign the documents at their offices.

Clearance figures and clearance certificate:

The transfer attorneys will request clearance figures from the local municipality. The clearance figures are usually a few months in advance (depending on which area you live in). The clearance figures will have to be paid in order to receive a clearance certificate from the local municipality. Not every transfer attorney deals with the clearance figures in the same way, so it is best to take this up with your transfer attorneys.

Pro forma account and transfer duty:

The transfer attorneys will furnish the purchaser with a pro forma account. This account will contain all the costs for registering the transfer. The purchaser is liable for these costs and must pay the account before registration can occur.

Transfer duty is payable on transactions above R 900 000.00. Regardless of whether or not transfer duty is payable, a transfer duty receipt will have to be obtained from SARS by the transfer attorneys.

New bond registration – electrical compliance certificate:

If you are registering a new bond, the bond attorneys normally request an electrical compliance certificate. The responsibility of obtaining this certificate usually falls on the seller (unless agreed to otherwise in the sale agreement). Even if there is no bond being registered an electrical compliance certificate could be requested by either the purchaser or the transfer attorneys. This will have to be obtained before lodegment in the Deeds Office. Tow other compliance certificates may be requested, namely one in respect of gas installations and/or in respect of an electric fence. The electrical compliance certificate, however, is the most common one.

Lodging at the Deeds Office and Deeds Office Procedure:

Once the transfer documents have been signed, the pro forma account paid, and the transfer duty receipt and clearance certificate have been received, the transfer attorneys should be ready for lodgement. They will correspond with the other attorneys involved if there is more than one transaction, and ensure that everyone lodges on the same day at the Deeds Office. If there are no queries from the Deeds Office, the registration period takes approximately 10 business days. It is important to note that the Deeds Office may have questions/queries about the transaction that will have to be answered by the various attorneys. The more complicated the transfer, the more questions they might have. This could slow down the registration period at the Deeds Office. Don’t worry or get impatient. The property WILL register. It might just take a bit longer than expected.

Upon registration:

Once the transfer has been successfully registered in the Deeds Office, the transfer attorneys will let you know as well as furnish you with a settlement account. This account will indicate all the costs/fees and money received as well as any money that may be due back to you.

The transfer attorneys will also furnish the local municipality with a registration letter confirming the details of the new owner (purchaser). It’s a good idea to get a copy of this letter in case you need it later. The Municipalities don’t always change the details immediately.

Depending on which area you live in, the purchaser should receive the new original title deed from the Deeds Office within a month (or sometimes more). If a new bond was registered, the bond attorneys will receive the new title deed which will be kept by the bank for safe keeping until the bond is paid up.