Understanding The Process

The aim of this information is to assist you in understanding the process involved in property transactions.

Step 1

We receive the signed contract / offer to purchase and immediately request the Seller’s cancellation figures (bond settlement amount) and the Local Authority’s clearance figures or Body Corporate levy figures. The cancellation figures of the Seller are critical as the guarantees given by the Buyer will be based on that.

We actively follow up on the bond approval, guarantees and deposits.

Step 2

As soon as we are satisfied that the Buyer’s finances are substantially in place we arrange for signature of the registration documents which are:

– The Transfer documents (the documents that registers the property on the Buyer’s name)

– The Bond documents (the documents required by the Bank to provide finance)

The Transfer and Bond documents represents two separate issues but it is registered simultaneously in the Deeds Office.

On signing of the Transfer and Bond documents by the Buyer we usually request payment of the registration costs as this is necessary to continue the process. In the case of Buyers not having access to the registration costs, most Banks offer innovative products that assist Buyers with

Step 3

On receipt of the costs from the Buyer / Bank, we pay the Transfer duty to the South African Revenue Service and pay the Local Authority any due amounts. Transfer duty refers to tax that the buyer pays on the buying of a property and is payable upfront to SARS (before registration). In the case of developers the developer is usually registered for VAT which implies that no Transfer duties are payable as our law determines that VAT excludes Transfer duties. You can only pay VAT or Transfer duty – not both!

We need the original Title Deed and Bonds for the registration of the new transaction. The Title Deed is usually in possession of the Seller’s Bank.

When we requested the cancellation figures from the Seller’s Bank, we also requested the present Title Deed which we need for registration of the new transaction. If the Title Deed or any Bond documents are lost, it can naturally cause huge delays.

Step 4

When we have the Transfer duty receipt, Clearance Certificate and Title Deed we arrange lodgement of the documents at the Deeds Office. This is on the premise that all involved attorneys are ready to lodge. It’s certainly noteworthy that in any Transfer there may be more than one attorney involved for example: Transferring attorney; Cancellation attorney (on behalf of the Seller’s Bank) and a Bond attorney (on behalf of the Buyers Bond)

Step 5

Most South African Deeds Offices have turnaround times of 8 – 10 working days from lodgement to registration. The final registration date can be manipulated by the Attorney attending to the transaction to a certain extent.

Step 6

Before registration we double check that the important contractual conditions have been met. If all is in order we proceed with registration. Only on this date the buyer legally becomes the new owner. The process after registration at the Deeds Office entails the updating of the Deeds Office records to reflect the new owner as well as various other administrative functions.

The critical date for everyone involved is the date of registration! The eventual delivery of the physical Title Deed by the Deeds Office only becomes important if the Buyer wants to resell the property within a limited space of time. After delivery the Title Deed and Bond Deed are kept by the Bank that granted the bond.

Please note that this is an overview and does not attempt to cover all the legal or property issues involved. It is not intended to be legal advice in any matter. If you do have any queries or need advice, please contact us. We hope this information was helpful.