Property Transfers - The Process

The process for property transfers in South Africa is fairly long and often confusing. There are a number of things that happen behind the scenes which are managed by a number of role players. As a seller, it is important that you understand the process and all the stages involved to help keep you in the loop. This includes the following:

• Offer to purchase

The registration of transfer is triggered by the acceptance of an Offer to Purchase by the seller. The Offer to Purchase should contain all the essential details regarding the Purchaser, the Seller, the property description and the payment of the purchase price as well as the particulars of the existing bondholder over the property.

• Bond application

Almost immediately after the acceptance of the Offer to Purchase, an application for the finance of the purchase price must be made by the Purchaser or their representative to a financial institution.

• Instruction to the transferring attorney

For a transfer of property a copy of the signed Offer to Purchase should be handed over to the transferring attorney upon acceptance by the Seller to activate the transfer registration.

• Cancellation figures

The transfer attorney will then immediately request cancellation figures from the Seller's existing bondholder. On receipt of the request the existing bondholder will supply the outstanding amount required for the cancellation of the bond and simultaneously instruct the attorneys to attend to the cancellation. The existing bondholder will also forward the Title Deed to the cancellation attorney.

• Clearance certificate

The property transfers attorney will apply for a Rates Clearance Certificate from the local authorities/Body Corporate. Once they have calculated the outstanding balances, the transferring attorney will be advised accordingly and must then make payment to obtain the necessary Rates Clearance Certificate. No transfer may be lodged with the Deed Office unless accompanied by the Rates Clearance Certificate. Upon approval by the financial institution of the purchasers' finance an instruction will be forwarded to the attorney of their choice (usually the transferring attorneys) to attend to the registration of the necessary bond.

• Transfer duty receipt

The transferring attorney submits an application for a Transfer Duty receipt from the Receiver of Revenue. No transfer may be lodged with the Deeds Office unless accompanied by the said Transfer Duty receipt. The attorney who is registering a bond immediately requests from the transferring attorney the draft Deed of Transfer. This is necessary to obtain details regarding the title conditions, purchase price, dates of sales etc. (This is only done if the financial institution instructs an attorney other than the transferring attorney.) Once instructed to register a bond by the financial institution the transferring attorney may now proceed to draw all documents regarding the transfer of property and arrange for the signature of both the Seller and the Purchaser.

Similarly, on receipt of the Draft Deed the bond attorney proceeds to draw all documents pertaining to the registration of the bond which is signed by the Purchaser. The bond attorney then issues the necessary guarantees in favour of the Seller and/or the existing bondholder of the Seller to procure the cancellation of the existing bond. By this time the transferring attorney would already have received both the Clearance certificate as well as the Transfer duty receipt and will now be in a position to lodge the documents for registration in the Deeds Office.

• Lodgement

The transferring attorney then contacts the bond attorney as well as the cancellation attorney in order to effect the simultaneous lodgement of the various deeds in the Deeds Office. The transferring attorney attends to the registration of transfer of property from the name of the Seller to the Purchaser whilst the cancellation attorney attends to the cancellation of the existing bond of the Seller and the bond attorney on the other hand sees to the registration of the new bond to be registered over the property as security for the Purchasers' loan. The set of three registrations is then submitted simultaneously in the Deeds Office and after being examined by the examiners in the Deeds Office, placed on preparation where property transfers and bond cancellation attorneys attend to any notes made by the examiners in respect of the documents. This takes 10-14 working days.

After the documents are cleared by the examiners on preparation i.e. all the notes are attended to by the various attorneys, they are then forwarded for registration the following day.

Upon registration the attorneys involved attend to the following:

• Present the guarantees for payment of the purchase price, which is then allocated towards the payment of the existing bond in the balance in favour of the Sellers, being the proceeds of the sale.
• Adjustment and apportionment of rates payments are made and the various parties debited or credited as the case may be. The local authority is advised of the registration.
• Agent's commission is paid to the estate agent.
• The property transfers attorney then forwards the Title Deed to the Bond attorney/Bond holder who retains this together with the registered bond document as secured.

• Celebration

And that, in a rather hefty nutshell is that. If you at any time feel in the dark, speak to us. Our agents will provide you with all the information you need to begin the property transfers process. It's all part of making sure that selling your home through Leapfrog is a pleasure.

Please do not hesitate to contact us if you have any questions related to registering a bond or property transfer in South Africa.