Wednesday, February 21, 2018
The parties involved in the registration and transfer process:
- The Buyer;
- The Seller;
- The Estate Agent;
- The Bank (The seller's bank and they buyer's bank);
- The Transferring Attorney (appointed by seller to transfer the property to the buyer's name);
- The Bond (Registering) Attorney (appointed by the bak who is granting a new loan);
- The Cancellation Attorney (appointed by the bank cancelling the bond of the seller).
The same attorney could be dealing with more than one or all of the above transactions.
A Step-by-Step Guide Through the Process...
There will be instances where some steps outlined below will happen simultaneously, or in a slightly different order, but this gives you a good idea of what is involved and why this process is such a lengthy one.
- The buyer makes an offer on the home he wants, by signing a legal agreement called the Offer to Purchase.
- The Buyer pays his deposit to either the Estate Agent or Transferring Attorneys, who must hold it in an interest bearing trust account until the property is registered in the buyer's name. The buyer must make sure that he receives a receipt. Remember that the buyer is entitled to the interest earned on the deposit being held in trust.
- The buyer applies for a mortgage loan (bond/home loan) with his bank.
- The buyer's loan application goes through a process of approval by the Bank's Credit Division.
- The buyer's Bank sends out a valuer 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).
- The seller must obtain Electrical Certificate of Compliance, and give it to the Transferring Attorneys.
- The buyer's home loan is granted, subject to the valuation and credit approval mentioned above, and the Bank advises the Registering Attorneys to register a Bond.
- The transferring Attorneys get a copy of the agreement and request the Title Deed and Cancellation Figures from the Seller's Bank (which currently has a bond over the property).
- The transferring Attorneys also request a Clearance Certificate for the Rates and Taxes from the Local Municipality.
The Transfer documents are then drawn up by the Transferring Attorneys once all the information in the above steps is obtained. The Transfer Documents include:
- The Transfer Duty or VAT Receipt (from the Receiver of Revenue).
- 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 requires in therms of conditions in the Title Deed (i.e. right of first refusal waived by the interested party).
- 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 they 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.
- The Transfer Documents are signed by the buyer and the seller, with the Transferring Attorneys.
- The buyer pays the Transfer Costs, with which the Transferring Attorneys pay the Rates and Taxes and Transfer Duty to SARS and a Transfer Duty Receipt is issued.
- The buyer's Bond Account and Supporting Documentation are prepared by the Registering (Bond) Attorneys.
- The Buyer signs the Supporting Documentation and pays the Bond Registration Costs to the Registering (Bond) 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.
- Once all the documentation is signed 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 Deeds Office takes approximately 2 weeks to check all the documentation before they are ready for registration by all the attorneys on the same day.
- On Registration, the Bank pays out the loan in accordance with the guarantees issue and the estate agent is paid the commission.
The whole process can take anything from 6 - 8 weeks, if there are no complications.
What could Delay the Process?
- The seller could be in arrears on the instalments of the existing bond, and could have difficulty in coming up with the money.
- Either/both the buyer and seller could disclose insufficient or incorrect essential information.
- Any of the parties involved could delay the provision of documentation, guarantees, certificates, employee subsidy documents and so on, on time.
- A delay in signatures and/or payments if conveyancing documents/costs.
- Delay by the buyer in obtaining government capital subsidy approval/employee subsidy documents for new bondholders and failure to comply with other requirements of the bank.
- Special consents in terms of the title deed may need to be obtained.