Property Transfer Process
1What is a transfer?
A transfer is the registration process whereby ownership of property (like a house, empty erf or building) is transferred from the owner (seller) to the buyer.

The transfer attorney (called Conveyancer) must obtain the following documents to register such a transfer in the Deeds Office (a government department that keeps these records):

• The original Title Deed of the current owner (this can be in the seller’s possession or with his bank that is his bondholder).
• An original Power of Attorney that authorises the conveyancer to register the transaction on behalf of the seller. The conveyancer drafts this document to be signed by the seller.
• A new Deed of Transfer that makes the buyer the new owner of the property on the date of the registration in the Deeds Office. The conveyancer drafts this document to be signed by the Registrar of Deeds.
• A transfer duty receipt that the transfer attorney obtains and pays via the SARS e-filing system. The transfer attorney will require personal income tax numbers of the seller and buyer to obtain this receipt. The buyer is liable to pay the transfer duty as a form of tax payable to SARS.
• A clearance certificate from the local municipality that certifies that all water and electricity are paid up and that rates and taxes on the property are fully paid up for two months in advance. The seller must pay this.
• With sectional title units the transfer attorney also has to obtain a levy certificate where the body corporate certifies that all levies are fully paid up. The seller is the one who must pay for this.
• If the property is in a security estate, the transfer attorney must also obtain a consent from the Homeowner’s Association that confirms that the levies are paid up. The seller is the one who must pay this.
2Who is the attorney nominated as the transfer attorney?
The legal practice is that the seller nominates the transfer attorney of his choice and the buyer will pay for the transfer fees of this attorney.
3What is a suspensive condition in a Contract and how does it work?
The two most general suspensive conditions stipulated in contracts are the following:

• The buyer is given a certain time to apply for and obtain a bond loan from a bank for a specific amount and by a specified date.
• The buyer is given a certain time to sell his current house successfully and within a specified period.

Both of these conditions are created to protect the buyer.
If the buyer is unsuccessful with the bond, the contract falls away as if it was never concluded.
However, if the buyer needs a few extra days to finalise his bond with the bank, the seller can agree to give more time in writing (this is called an addendum), otherwise the contract is regarded as null and void.
4How much does a transfer cost and who is responsible to pay?
The buyer is responsible for payment of the transfer fees of the transfer attorney. The buyer is also responsible for payment of the transfer duty. Important to note the difference between transfer fees (the attorneys’ fees) versus transfer duty (the tax paid to SARS on the transaction).

The buyer is also responsible for payment of the bond fees of the bond attorney if the buyer is registering a bond to pay for the purchase price. As a buyer you must budget to have enough funds available to cover both the transfer and bond costs payable on top of the purchase price.

The fees of the attorneys are prescribed by law and calculated on a gliding scale according to the purchase price amount.
You may request a written quotation of the costs from the attorneys. An estate agent can also provide you with a general guideline of the costs.
5How many attorneys are involved in a transfer transaction?
The TRANSFER ATTORNEY or Conveyancer deals with the transfer of the property and is usually nominated by the seller. The transfer attorney is in charge of the transfer process. The buyer is responsible to pay the costs of the transfer attorney (transfer fees plus transfer duty).

• The BOND ATTORNEY deals with the registration of the buyer’s bond over the property in order to pay for the purchase price. This attorney is nominated by the bank that has approved the buyer’s bond. The buyer is liable for costs of the bond attorney (bond registration fees).

• The CANCELLATION ATTORNEY deals with the cancellation of the seller’s existing bond over the property. This attorney is nominated by the bank who is the existing bondholder. The seller is responsible to pay the costs of the cancellation attorney (cancellation fees).
6What is a bond?
The buyer can apply for a home loan should he not be able to buy the property at a cash price.

The bond is the legal document that is registered in favour of the bank as its security that the buyer will repay the home loan. If the buyer defaults and fails to repay the loan, the bank will repossess the property and sell it at an auction to recover the monies owed by the buyer.
7How do I apply for a bond?
You can approach any bank or financial institution which offers home loans or submit your application via a bond originator who will provide you with all the information and documents required.
Three factors determine whether or not your bond will be granted:

• Your credit record (if you are creditworthy)
• Your income (if you can afford to pay the monthly bond instalment)
• The value of the property that you want to bond
8What is a guarantee?
This is a bank document that guarantees that on date of registration of the transaction, certain payments will be affected electronically by the bank that granted the bond.

When you sign the bond documentation at the bond attorneys, one of these documents will be an authority wherein you instruct how the funds of your home loan must be paid out on registration date.

Subsequently, one guarantee will be issued to ensure payment of the purchase price to the transfer attorneys.

Another guarantee will be issued to ensure payment of the seller’s outstanding bond to the cancellation attorneys, if this applies to the transaction.
9 What is penalty interest / early termination fee?
Upon cancellation of your bond, most banks will charge an additional 90 days interest to your settlement amount.

Should you therefore wish to sell your house, please contact us with your bond account number in order to notify your bank as soon as possible that you are planning to cancel your bond.
10What is Homeowner’s Cover and why does the bank require this insurance?
This insurance covers the structure (house or building) on your property.

The bank requires such insurance cover as security that should anything happen, the costs to rebuild the house or building will be settled by an insurance company.
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