The Transfer Process
Category Home Buying/Selling Tips
What does the transfer of property mean?
The transfer of property is when the ownership of a property is moved from one person to another. This happens when a property is sold, or when the owner of a property dies and leaves the property to another person. Ownership is a right that isn’t tangible, but the evidence of ownership can be found in a deed of transfer (“deed”). This deed must be registered at the Deeds Office to be validated and binding.
What is an agreement of sale?
When a purchaser makes an offer to buy the property of the seller, and the seller accepts the offer of the purchaser, an agreement of sale comes to existence.
An agreement of sale is a contract containing the terms and conditions of the sale of the property negotiated between the purchaser and the seller, such as:
- property description
- personal information about the purchaser and seller
- purchase price and / or deposit (if any) payable
- details of the attorney instructed to transfer the property (“conveyancer”)
- estate agent commission payable
- any conditions the agreement of sale is subject to, for example, the purchaser obtaining a loan (“bond”).
An agreement of sale will only be valid if it is in writing and signed by both the seller and the purchaser. An oral agreement of sale is not binding. The agreement of sale forms the basis for the transfer of property. Without a valid agreement of sale, and compliance with the terms and conditions contained therein, there can be no transfer of property.
How the transfer process works:
The transfer process can take up to 3 months.
There are different phases involved in the transfer of a property, these phases are:
There are different phases involved in the transfer of a property, these phases are:
Purchasing of Property:
Purchaser and Seller sign Offer to Purchase. Purchaser applies for loan (bond) at a financial institution. Transferring Attorney (conveyancer) is instructed to attend to transfer of property. The conveyancer requests cancellation figures for the Seller's bond. Request rates / levy clearance figures from the local municipality or managing agent.
Instruction:
The conveyancer receives the instruction to transfer the property.
Bond Approval:
Bank approves bond and sends electronic instruction to the bond attorney to attend to the registration of the bond. The bond attorney advises the conveyancer of amount available for guarantees.
Documents Drafted:
Title deeds obtained from holder and receives cancellation figures. Transfer documents drafted. The conveyancer advises the bond attorney of guarantee requirements and provides draft deed of transfer. Bond documents are drafted.
Communication:
The conveyancer communicates with the various role-players involved in the transfer process, such as the seller, purchaser, transfer and bond attorneys, municipality, bank, South African Revenue Service (SARS) and so on.
Collection:
Certain information and documents are required, such as the agreement of sale, deeds office search, existing deed, bond cancellation figures from the bank and so on. The conveyancer should continuously report to the various role-players about the progress being made.
Drafting and signing:
As soon as all the information and documents have been collected, the conveyancer will draft the transfer documents and request the seller and purchaser to sign them. These transfer documents will include a power of attorney and various affidavits.
Finances:
Financial arrangements include requesting an advance payment for the conveyancer’s interim account for certain expenses, requesting the bank guarantee, collecting the purchase price or deposit and so on.
Transfer duty:
Obtaining a transfer duty receipt from SARS, confirming that the tax relating to the transfer of the property has been paid by the purchaser.
Clearance certificate:
Obtaining a clearance certificate from the municipality, confirming that all amounts in respect of property have been paid for the last two years.
Preparation:
The conveyancer prepares for lodgement (submission) of the deed of transfer and other documents necessary for registration at the deeds office.
DEEDS OFFICE PROCEDURE
DAY 1 :
Lodgement counter
Documents lodged by all attorneys. Documents are individually captured on the system.
DAY 2-3 :
Data and Sorters
Documents are linked and then relevant batches are captured on system.
Printouts of both property and persons involved are made available for examiners.
DAY 4 :
Examiners (Deed Controllers)
Deeds are examined by First Examiner (Junior). Deeds are endorsed and remarks are stated.
No Rejections.
DAY 5 :
Sorters
Documents are received back from First Examiner (Junior) and re-issued to Second Examiner (Senior).
DAY 6 :
Examiners (Deed Controllers)
Deeds are examined by Second Examiner (Senior). Deeds are either passed or rejected.
DAY 7 :
Sorters
Documents are received back from Second Examiner (Senior) and re-issued to Assistant Registrar (Monitor Phase).
DAY 8 :
Examiners (Deed Controllers)
If Monitor finds any matter (issue) passed by Second Examiner (Senior), which should have been rejected, then Assistant Registrar (Monitor Phase) may also reject the deeds.
DAY 9 :
Preparation Phase
Deeds received back from Assistant Registrar (Monitor Phase) are split and issued to each Attorney to remove Notes from Examination. Once Notes are removed deeds are issued to registration.
DAY 10 - 14 :
Registration Phase
Deeds ready for registration are received in this Phase where it may stand over for 4 days. If not registered by the 4th day the deeds are automatically rejected.
Registration:
Once the deed of transfer and other documents have been lodged it, takes the deeds office about 7 – 10 working days to examine these documents. If the deeds office is satisfied that the requirement for the transfer of property has been met, the deed of property is registered. The conveyancer will notify the various role-players of the registration.
Accounts:
Once registered, the conveyancer makes the necessary calculations and payments relating to the sale, for example, the estate agent’s commission, purchase price and so on. The conveyancer’s final account is also drawn up and sent to the purchaser and the seller for payment.
What else should a person know about the transfer process?
- Normally there are 3 attorneys involved in the transfer process, being the transfer attorney, bond cancellation attorney and bond registration attorney
- The transfer attorney is the conveyancer that has been instructed to attend to the transfer of the property and registration in the deeds office.
- The bond cancellation attorney is the attorney that cancels the existing bond of the seller over the property and ensures that the bank receives the outstanding bond amount when the purchase price is paid on registration.
- The bond registration attorney is the attorney that registers the purchaser’s bond over the property. The purchaser is responsible for his/her bond payments.
The costs relating to the transfer of property are:
- transfer duty to SARS;
- rates payable to the municipality;
- conveyancer’s interim and final account payable; and
- fees to the relevant banks.
The registered deed is given to the purchaser if the property was paid for in cash, alternatively the purchaser’s bank if a bond was registered over the property.
We hope that this gives you a clear picture of the Transfer Process, our agents are 100% happy to help clarify any questions you may have. Click Here to Find an Agent
Why not choose Homes of Distinction when selling your property?
Homes of Distinction has been successfully employing an online marketing, SEO and social media strategy for several years now, with a large increase in views on our website and your properties. We can assure you that you cannot afford to fall behind the curve here, no matter what your business is!
Sale listing, sale, sales, to sell, for sale, sold, just sold, estate agents, realtors, estate brokers, to let, rent, real estate agents, estate agency, estate agencies, property specialists
Author: Georgina Roberts
