What is Conveyancing?
The term "conveyancing" describes the legal process whereby rights in fixed property are registered in the deeds office. These rights include ownership, mortgage, servitude, mineral rights and others. All these rights vest legally in a person only on registration. The registration process, therefore, places an official "seal" on a person's rights in fixed property.
A conveyancing transaction involves a chain of steps which begins with the deed of sale and which continues through to the ultimate registration of ownership and the reconciliation of finances and payment.
Who is a Conveyancer?
A conveyancer is a specialist admitted attorney as such by the High Court after having completed a special qualifying examination. In addition, only a person who has been admitted by the High Court as an attorney, may practice as a conveyancer. All conveyancers are therefore, also attorneys.
To be admitted, the prospective conveyancer has to complete the required academical studies (usually four or more years for the necessary law degree), then a period of "articles" or work in a law-office for the necessary experience and then an extensive practical examination. If the so-qualified attorney wishes to practice in the highly technical branch of the law dealing with fixed property, he or she has to do intensive study of a large number of Acts of Parliament, regulations, Supreme Court decisions and decisions by Registrars of Deeds relating to fixed property. Then he or she has to pass an extensive examination. Only after passing this examination will the High Court allow the attorney to practice as a conveyancer.
The Transfer Process
TIME PERIOD | ACTION BY ATTORNEY | | | 10 – 25 Days | *Receive Deed, Draw Transfer Documents (in case of Exclusive Use Area with Sectional Title only if in possession of Title Deed);
*Receive cancellation figures for existing Bond;
*Request costs & arrange for Signature of Documents with both Seller & Purchaser; | 25 – 40 Days | *Receive Bond Instructions;
*Draw documents & Costs
*Seller & Purchaser signs documents; | 40 – 50 Days | *Pay Transfer duties & Council for rates;
*Receive Rates Clearance Certificate;
*Receive Guarantees forward on to Bond cancellation Attorney; | 55 – 65 Days | *Arrange for lodgment with all parties;
*Lodge & Register Transfer (normally within 10 working days after lodgment); | 60 – 70 Days | *After registration: Settle Bond, & final accounting to all parties;
*Inform all parties involved;
*Delivery from Deeds Office; |
What happens at the Deeds Office?
The deeds office is a government registry of ownership in all fixed property and other rights in fixed property. The conveyancer attending to the bond will also lodge the bond documents in the deeds office for registration simultaneously with the transfer documents. The examiners in the deeds office scrutinise the documents to ensure that the document comply with all relevant legislation and regulations.
When they are satisfied, they inform the conveyancer that the deeds are ready for registration and thereupon, in the presence of the conveyancer and registrar of deeds, the transfer of the property is registered in the name of the purchaser. The bond is registered simultaneously. The title deed will be handed to the purchaser by the conveyancer, unless a bond has been registered, in which case the title deed is retained by the bondholder.
What are the costs involved?
The costs relating to the transfer of fixed property fall into three main categories:
- Transfer duty or Value Added Tax (VAT). The transfer duty is payable to the Government and is calculated as follows:
| 0% | Between 0 and R500,000.00 | | 5% | Between R500,000.01 and R1,000,000.00 | | 8% | Above R1,000,000.00 | | 8% | Flat rate where the purchaser is a Company or Close Corporation | - A pro rata portion of the rates payable on the property to the relevant local authority (or a pro rata portion of the levies payable to the Body Corporate in the case of a flat (plus Value Added Tax where applicable).
- The conveyancer's fee which is calculated on a sliding scale based on the purchase price and is payable by the Purchaser.
Where a bond is to be registered, the purchaser will have to pay the inspection costs, provisional interest, insurance premiums and the conveyancer's fee (also prescribed and calculated on a sliding scale based on the amount of the bond).
General Facts
Occupancy of the property does not necessarily have to coincide with registration of transfer. Risk in the property passes to the purchaser when the deed of sale is signed, although the consequence can be (and often is) changed in the deed of sale itself. Ownership does, however, not pass on signature of the deed sale. The purchaser becomes owner only on registration of the property in his name in the deeds office. The deed of sale grants the purchaser the right to claim transfer of the property to him.
Why does the process take so long?
Having read this pamphlet you will be aware that conveyancing is a complex field requiring extensive knowledge, skill and attention to detail on the part of the conveyancer. Very often there are whole chains of transactions linked up in this fashion. On average, the time taken to register the transfer of property, where a bond is involved, will be two or three months from the date that the conveyancer is instructed but unforeseen difficulties may cause the period to be extended.
In the usual conveyancing transaction there are a number of parties involved such as: - The seller (and spouse);
- The purchaser (and spouse);
- The institution who previously gave the bond to the seller (and the conveyancer acting on its behalf);
- The Receiver of Revenue;
- The municipality or local authority;
- The institution who gives the new bond to the purchaser (and the conveyancer acting on its behalf);
- Estate agent;
- Conveyancer(s);
- Registrar of Deeds;
- The buyer of the purchaser's previous prosperity (which-the purchaser had to sell to obtain the cash portion of the purchaser price);
- The conveyancer acting on behalf of the purchaser;
- The institutions who gave and are giving the loans in that transaction (and their conveyancers) and so forth.
Common Causes of Delays In Transfers - Incorrectly completed agreements - Ensure full details are given and/or disclosed to the agent;
- Marital status not advised - Provide the agent with copies of ID documents, ANC, copies of marriage certificates and divorce order. Your marital status is a vital part of your description in the Title Deed or Bond;
- Insufficient funds to cover transfer and bond costs - Ensure that you are aware of all the costs involved and that you have made sufficient arrangements to cover them;
- Delays in payment of costs - Costs are usually payable on demand. Prompt payment of these can ensure speedy registration of your transaction;
- Bond application - Apply for the bond immediately upon having signed the sales documentation and arrange to sign documents as soon as you are contacted by the attorney to do so in respect of both the transfer and the bond;
- Contract not complied with - Be aware of your obligations in terms of the contract and comply with them, such as occupation dates, electrical certificates, issuing of guarantees timeously etc.;
Make a full disclosure of all aspects that may cause delays - Details of all bonds registered over the property, any interdicts or servitudes of which you are aware.
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