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GENERAL PROCEDURE FOR THE REGISTRATION OF A PROPERTY
TRANSFER:
Introduction:
It is a stautory requirement that any transfer of immovable
property be dealt with by a duly qualified conveyancer1
through a specific Deeds Registry2
for it to be binding and valid on all parties.
The Initial Process:
Once a seller has decided to sell their property and they have
found themselves a willing and able buyer, whether with the
assistance of an estate agent or not, the parties are required
to conclude a written agreement setting out the terms and
conditions of the sale of the specific property. One of the
specific terms and conditions which need to be decided on at
this point is the conveyancer who is going to be responsible for
handling the transfer on behalf of the parties.
As it is the interests of the seller that the purchaser complies
with the terms and conditions of the agreement and that the
purchaser fulfils his obligations in terms of the agreement
timeously, it is the seller who is entitled to choose a
conveyancer of his choice in order to give effect to the
transfer. This, however, is not a fixed rule and the seller may
appoint a conveyancer chosen by either the purchaser or even the
estate agent, should he so wish.
Once a conveyancer is chosen and appointed, even though he is
chosen by the seller, such conveyancer is then duty bound to
ensure that the interests of both parties are protected and that
he keep both the seller and purchaser, as well as any other
interested parties, informed of the progress of the matter.
The process to registration:
Once a conveyancer is in receipt of the necessary instructions,
he shall:1.
Firstly proceed to determine whether there is a binding
agreement between the parties and whether there are any
suspensive conditions3 ,
for example the sale is subject to the purchaser selling his
existing property or obtaining of a loan by the purchaser
which is to be secured by a mortgage bond, which need to be
fulfilled before the agreement becomes finally binding on both
parties.
2.
The conveyancer will then do a Deeds Registry search to
determine the proper description of the property, as reflected
at the specific Deeds Registry as well as the present
registered owner of the property. The reason for this is
twofold in that the registered owner is not necessarily always
the seller in terms of the agreement and from such a search he
can determine whether there are any encumbrances (these could
be either, existing registered mortgage bonds, interdicts4,
any notarial rights5,
etcetera) on the property.
3.
Contact the purchaser and seller to obtain necessary
particulars as well as proof of:
3.1 Copies of identity documents;
3.2 Marital status;
3.3 Antenuptial contracts, if married out of community of
property;
3.4 Divorce orders, if applicable;
3.5 Determine the existing bond details from the seller:
3.5.1 The institution in whose favour it is registered;
3.5.2 The bond account number; and
3.5.3 Any other relevant details in respect of the bond;
3.6 The registration number and details of auditors or
accounting officers of the parties if they are companies,
close corporations, trusts, etc.
3.7 Any other relevant information or documents that may be
required by the conveyancer to draft the documents for the
transfer.
4.
The conveyancer shall then request the original title deed6
of the property. If an existing mortgage bond is registered
over the property the original title deed will be held by the
specific institution in whose favour the bond is registered
and therefore the conveyancer will contact the stated
institution and request that the institution forward
cancellation figures7
together with the original title deed to him.5.
The conveyancer shall also inform the purchaser of his
obligations in terms of the agreement and forward to the
purchaser a copy of his Pro Forma account. The
Pro Forma
account of the conveyancer sets out the costs involved in
giving effect to the transfer of the immovable property, which
are to be borne by the purchaser, and include:
5.1 Transfer duties, which normally make up the largest
portion of the costs, and which need to be paid to the
Receiver of Revenue;
5.2 The conveyancer’s costs;
5.3 The Deeds Registry’s costs; and
5.4 The estimated rates and taxes of the Local Authority, to
obtain a rates clearance certificate.
The costs of the
registration process can become costly and
further should the purchaser wish to register a
mortgage bond,
the purchaser’s costs will be greater, and accordingly the
purchaser is advised to make himself aware of the
possible
total costs prior to signing the agreement of purchaser and
sale. The reason for this is that the registration cannot
proceed until such time as the Receiver of Revenue and Local
Authority have been paid in full and therefore, such amounts
have to be made available to the conveyancer by the purchaser,
when he is called on to pay such amounts.
6.
Only once the conveyancer is in receipt of the necessary
documentation and original title deed can he proceed in
drafting the documentation to give effect to the transfer.
After he has prepared the documents he shall contact both the
purchaser and seller to come and sign the documentation and he
shall request guarantees from the attorneys responsible for
the registration of the new bond in order to cover the
cancellation figures and to pay the remainder of the purchase
price to him.
Once the conveyancer is in receipt of the original guarantees
he shall forward the bond cancellation guarantee to the
attorneys responsible for the cancellation of the bond8
.
The registration process:
Once the transferring conveyancer has received the signed
documentation from the purchaser and seller, the transfer duty
receipt and the rates and taxes clearance certificate, and all
the suspensive conditions in the agreement of purchase and
sale have been complied with the transferring conveyancer will
arrange lodgement in the specific Deeds Registry.
The reason for arranging lodgement is twofold. Firstly, it is
to confirm that all the other conveyancers in the transaction
are ready to proceed with the registration. Secondly, all the
documents need to be lodged at the Deeds Registry on the same
date where they are linked9
by the Deeds Registry and the registration process commences.
Once the documents have been properly linked into a single
batch, the registration process in the Deeds Registry takes
between 6 and 10 working days10.
The batch is examined by both junior and senior examiners, who
confirm that all the statutory requirements, to give effect to
the registration of a transfer have been complied with.
These examiners can then raise queries in respect of the batch
documents. If the queries are of a minor nature, such queries
are raised by way of notes at the rectification or prep stage,
where the conveyancer will accordingly attend to the notes in
the documents and have such queries removed from his
documents. However, if the queries are of a more significant
nature, then the examiners will reject the documents and the
conveyancer will have to rectify the problems and re-lodge the
documents, whereupon the whole registration process is
followed again11.
Finalising the transfer:
Once all the notes have been removed by the conveyancers and
all the conveyancers are ready to register their documents,
the transfer will be registered in the Deeds Registry. This is
usually the business day following the day that the documents
were on rectification or prep, however, this is not a hard and
fast rule as there may be other factors which make
registration on the following day impossible.
Upon registration, which occurs by the relevant conveyancers
of a specific batch, signing their documents in front of each
other and in front of the relevant Registrar of Deeds, the
property is transferred into the purchaser’s name and he
immediately becomes the registered owner of the property.
Further, the existing bond is cancelled and the new bond is
registered over the property.
On the same day that the new bond is registered over the
property, the guarantees are presented by the conveyancers for
payment by the relevant institution. Final accounts are then
prepared and the necessary payments are made to the seller,
purchaser (if any) and any other payments which need to be
made.
The only duty left for the transferring conveyancer in this
transaction is to forward the original duly registered title
deed to either the purchaser or the institution in favour the
new bond is registered, as security, if a new bond was
registered.
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1Section 15 of the Deeds
Registries Act, Act 47 of 1937. A conveyancer is an admitted
attorney who has taken an additional examination and who has
been admitted to practice as a conveyancer by the High Court. A
conveyancer is also an attorney who specialises in all aspects
of property law
2There are eight Deeds
Registries presently in South Africa at Bloemfontein, Cape Town,
Kimberley, King William’s Town, Johannesburg, Pietermaritzburg,
Pretoria and Umtata.
3Should a suspensive
condition not be fulfilled through no fault of either party, the
agreement lapses and has no force and effect in law and
accordingly the parties may conclude a new agreement
alternatively the seller may contract with another party for the
purchase of the property.
4One kind of interdict
could be an order of court which has been obtained against the
existing registered owner which have been noted against the
property and will have to be removed prior to the property been
transferred.
5These could be any real
rights which have been registered against the property, for
example a long lease in favour of ESCOM to erect power lines and
to convey electricity across the property, alternatively, a
right which a party has to the effect that such party must
consent to the transfer before the transfer can be registered in
the Deeds Registry, i.e. a right of usufruct.
6A title deed is a document
which has been registered in a specific deeds registry
confirming who the registered owner is of a specific piece of
immovable property, as well as confirming the existence of bonds
and other real rights registered in respect of the stated
immovable property.
7The figures required to
cancel the existing bond, which figures include the capital
amount as at a specific date together with interest thereon up
to an including cancellation of the existing bond by the
registration of a new bond in favour of the purchaser.
8It can be seen that in any
transaction there can be a number of conveyancers who need to
work together to give effect to the transfer of the property
into the purchaser’s name, e.g. the transferring conveyancer,
bond cancellation conveyancer and bond registration conveyancer.
9All the documents relevant
to a specific transfer are physically placed together to form a
batch of documents, and this batch moves through the examination
process in the Deeds Registry as one, in order to ensure that
all the processes i.e. the cancellation of the existing bond,
the registration of the new bond and the transfer of the
property into the purchaser’s name, occur all at the same time.
10This is the usual time
period that a transaction should take in a specific Deeds
Registry, however, this time period may be longer due to other
factors within the Deeds Registry and which fall outside the
control of the conveyancers.
11What must always be borne
in mind with regard to a query which results in the documents
been rejected by the Deeds Registry is that should only one
document in the batch be rejected, the entire batch is rejected,
whether the other documents have any queries or not, and as such
a rejection may fall outside the control of a specific
conveyancer in any given transaction.
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