Conveyed by Benaters is Your One-Stop Shop for Selling and Transferring Your Property

Conveyancing relates to the legal process that transfers ownership of the home from the seller to the buyer. The conveyancer (who is an attorney) is usually appointed by the seller, but paid for by the buyer (due to the nature of the transaction, the seller is at greater risk and this appointment is therefore a general rule of thumb).

A conveyancer performs a vital function when completing a property transaction. In fact, you would not be able to call yourself the “owner” of a new property without one. Conveyancers attend to the process of actually transferring legal ownership of fixed property from one person (or a company or trust) to another. In a nutshell, this process amongst other things, involves ensuring the deed of sale meets all the legal requirements, including requesting and collecting supporting information (such the mortgage bond, cancellation figures, title deeds, compliance certificates, and the amounts from the municipality for a rates clearance certificate). The conveyancer is also tasked with drafting all the necessary documentation (such as a “power of attorney to pass transfer” for the seller to sign, a declaration in respect of marital status, ID Number as well as the bond registration documentation for the purchaser when registering the bond) that needs to be lodged with the deeds office to finalise the registration of the sale.

The seller appoints the conveyancer. However, this can be varied by agreement between the parties. It is a misunderstanding that the estate agent appoints the conveyancer which is not the case.

Firstly, it must be noted that there are distinct and separate fees related to the overall transfer costs of a property. And conveyancing fees is only one of them. The others are transfer duty and bond registration costs.

To complicate matters, conveyancing fees are variable based on guidelines that are issued by the Law Society of South Africa (LSSA) and are not set minimums. Generally, they are calculated on the purchase price of the property (or the capital amount of the bond) which were most recently updated and applicable from 1 July 2020.

To assist you with ascertaining the approximate transfer costs together with estimated registration fees and transfer duty, refer to the Transfer Cost Calculator.

The agreement will stipulate to whom the deposit is paid. The deposit is paid into the trust account of either the agent or the conveyancer. The agent or the conveyancer will then invest the deposit in an interest-bearing account for the benefit of the Purchaser.

A suspensive condition is a condition in an agreement of sale that suspends the rights and obligations of the agreement until the occurrence of a certain future event. E.g. until the purchaser obtains the required bond grant.

The agreement is null and void and no claim for damages can be made.

The purchaser pays the transfer costs to the conveyancer, including transfer duty. The purchaser is also liable to pay the bond registration costs.

Transfer duty must not be confused with transfer costs, which include all the expenses associated with a property transfer.

Transfer duty is paid to SARS and is therefore statutory. Meaning it cannot be negotiated.

According to the Transfer Duty Act 40 of 1949, transfer duty is owed over and above the purchase price and is based on the bank valuation amount, not the selling price of the property. This tax is paid by the buyer and the payments thereof handled by the appointed conveyancer on the buyers behalf. SARS will generally regard the purchase price of the property to be its value, unless of course SARS is of the opinion that the purchase price does not correspond with the true value of the property i.e. the value has been understated, in which case transfer duty will be paid on the true, market or fair value.

As of 1 March 2020 to 28 February 2021, transfer duty rates changed. To assist you with ascertaining the approximate transfer costs together with estimated registration fees and transfer duty, refer to the Transfer Cost Calculator.

Once a bond has been granted and the buyer has accepted it, he/she will pay fees to register the bond and to transfer the property into his/her name, a process which is handled by the conveyancer (whose fees cover the bond registration over the title deeds).

Very briefly - once a seller has accepted an offer to purchase (meaning the transfer process has officially begun), the buyer must produce proof that that their bond application has been successful. The seller must then appoint a transfer attorney, (who is a conveyancing attorney) to handle the process. Transferring attorneys are one of three attorneys who will play an important role in the home buying process. This team of attorneys includes (a) the transfer attorney, responsible for registering the property in the new owners name, b) the bond attorney (appointed by the bank) who I responsible for registering the bond in the home buyer’s name and (c) the cancellation attorney (appointed by the bank) who is responsible for attending to the existing bond cancellation.

Once the transfer duty has been paid, all documents have been lodged at the Deeds Office and the transfer attorney has finalised their accounts and paid over all proceeds to the seller, commission to the agent and refunded any credit that is due to the seller (within 12 months), registration of the property (meaning the purchaser is now the new rightful owner of the home) should then occur. This can take anything from 8 to 10 working days. The transfer, new bond and cancellation of the existing bond are all registered simultaneously.

Whilst seemingly straightforward, there are a number of factors which can influence the timing of any of these cogs in the property transaction wheel, resulting in an increase in the time it takes for any one of the above steps to be completed. To understand some of the delays that you could face refer to our article on transfer cost delays.

At Benaters, we understand the pressure and stress involved in finalising a property transaction, especially when it is a family home. We therefore strive to get your transaction finalised as soon as reasonably possible.

After all, we want to ensure that our clients are in their new property or are able to successfully sell their existing property (often filled with memories) as painlessly and seamlessly as possible.

The seller is liable to pay the following:

1. bond cancellation attorneys’ costs

2. rates clearance figures - advance rates, water, electricity payable to the municipality. The Conveyancer will obtain the required amount from the municipality during the conveyancing process.

3. levy clearance figures - advance levies payable to the body corporate (the Conveyancer will obtain the required amount from the body corporate during the conveyancing process)

4. the costs to obtain the required compliance certificates (electrical, gas, electric fence, water)

5. Agents Commission

The transfer costs are levied on the purchase price or value of the property. The fee is based on the tariff set by the Legal Practice Council.

The transfer costs are usually payable after the purchaser has signed the transfer documents.

Transfer duty is the tax levied by SARS (South African Revenue Service) on the purchase price or value of any property acquired by any person or legal entity.

The transfer documents are drafted and signed once all the conditions of the offer to purchase have been met, the conveyancer has received the requested FICA documents from all the parties and has received a copy of the title deed from the Seller or the bank (if there is a bond registered over the property).

Yes they can, however certain rules for signing will need to be followed. The procedure to be followed will depend on the country where the documents are being signed. E.g. The documents may need to be signed before a Notary Public and then Apostilled or they can be signed at the South Africa embassy.

A transfer takes approximately 8 weeks to register. The time frame depends largely on the time periods set in the Offer to Purchaser, the participation by the seller and purchaser and other factors.

Registration usually takes approximately 7-10 working days from date of lodgement. However, this time period differs depending on the Deeds Office where the transfer is lodged.

After registration the transfer documents (including the title deed) are microfilmed by the Deeds Office and thereafter they are released to the transferring attorneys. If there is a bond registered over the property the transferring attorneys will hand the original title deed to the bond attorneys who will then deliver same to the bank. The bank will hold onto the original title deed until the bond is cancelled. If no bond is registered over the property the transferring attorneys will hand the original title deed to the new owner thereof for safe keeping.