Frequently Asked Questions – Property Law
What is the procedure to transfer a property?
- Once the sale agreement is signed, the Conveyancer receives it from the client / estate agent.
- Once the suspensive conditions are met, i.e purchaser obtaining a bond, the transfer process can commence.
- If there is an existing bond registered over the property (the sellers bond), the Conveyancer requests bond cancellation figures from the current bondholder and applies for the rates clearance figures from the local municipality.
- The Conveyancer obtains FICA documents from the seller and purchaser.
- The Conveyancer drafts the documents (affidavits, transfer duty declarations, power of attorney to pass transfer and the deed of transfer).
- Parties sign the transfer documents and pay the costs.
- The Conveyancer pays the amount due to the local municipality to obtain a rates clearance certificate.
- The necessary documents are submitted to the Receiver of Revenue and payment of Transfer Duty is made to obtain a transfer duty receipt.
- Documents are lodged in the Deeds Office (simultaneously with the bond cancellation and bond documents) for examination; the documents will then come up on preparation and be registered thereafter.
How long will the property transfer take?
Under ideal circumstances a transfer takes between 42 and 65 days. There are a number of factors that can delay the transfer of a property, including:
- Timeous payment of the purchase price/deposit and costs, including the amount for rates and transfer duty.
- If the title deed and mortgage bond is available.
- If the parties have the proper FICA documents available.
- The period the local municipality takes to issue rates clearance figures and rates clearance certificate.
- The period it takes the Deeds Office to examine and register the transfer documents.
Why are there so many attorney firms involved and can I insist on one firm attending to all the work?
There are normally three firms of attorneys involved in the conveyancing process, namely:
- The transfer attorneys, usually appointed by the Seller;
- The bond cancellation attorneys, appointed by the Seller’s bank holding the existing bond over the property;
- The bond registration attorneys, appointed by the Purchaser’s bank.
The banks do not normally allow the purchaser or seller to elect the bond registration or bond cancellation attorney.
What are the costs to transfer a property?
- There is a number of costs payable, including professional fees of the transfer, bond cancellation and bond registration attorneys.
- The professional fees charged are in accordance with the guidelines prescribed by the Law Society of South Africa and are calculated on a sliding scale based on the purchase price of the property.
- The Seller is normally liable to pay the amounts due for:
- Electrical compliance certificate, including repairs required to issue the certificate;
- Woodborer certificate, including fumigation costs if required;
- Outstanding rates due to the local municipality up to date of transfer;
- Amount due to the bank for the cancellation of the bond;
- Professional fees of the bond cancellation attorneys;
- Agent commission is applicable.
If there are sufficient proceeds from the sale of the property these costs are paid by the Conveyancer upon registration of the transfer.
- The Purchaser is normally liable to pay the amounts due for:
- Rates due to the local municipality from date of transfer to the financial year of the local municipality. Thus rates are paid in advance. The purchaser can arrange to pay rates monthly after the first financial year end;
- Professional fees of the transfer and bond registration attorneys;
- Deeds office registration fees;
- Transfer Duty payable to SARS. Transfer duty is currently calculated as follows based on the purchase price or fair market value of the property:
- 0% on the first R 600 000.00
- 3% on R 600 000.01 up to R 1 000 000.00
- R 12 000.00 plus 5% on the value from R 1 000 000.01 to R 1 500 000.00
- R 37 000.00 plus 8% on R 1 500 000.01 and above