PROPERTY TRANSFER GUIDE Meeting your Unique needs
INDEX SELLING OR BUYING A PROPERTY...3 CONVEYANCER...3 WHO CHOOSES THE CONVEYANCER...3 TRANSFER REGISTRATION STEPS...4 BOND REGISTRATION STEPS...5 WHAT HAPPENS BETWEEN LODGEMENT AND REGISTRATION?...6 FINANCIAL INTELLIGENCE CENTRE ACT NO. 38 OF 2001...7 TRANSFER DUTY...8 RATE CLEARANCE CERTIFICATES...9 ELECTRICAL COMPLIANCE CERTIFICATE...10 CONTACT US...11 Disclaimer:- This information sheet has been compiled for your convenience, but is not a comprehensive compilation of the topics discussed.
SELLING OR BUYING A PROPERTY Owning property is the largest and most important investment for most people. Property is also the most expensive asset most people will ever own. Therefore it is important to have a basic understanding of the process followed and how it will affect you as a Seller or Purchaser. When buying or selling property, the Seller will transfer ownership of his property to the buyer and cancel the existing mortgage bond over the property, if there is an existing bond. The Purchaser will take transfer of the property into its name and simultaneously register a new mortgage bond over the property. If the Purchaser is paying cash there will be no mortgage bond registered over the property. When buying or selling property the Seller and Purchaser will deal with a Conveyancer in order to finalise the process of registration. CONVEYANCER A Conveyancer is an Attorney who has written and passed a specialised exam which allows the Conveyancer to attend to property related transactions. The practice of Conveyancing is not limited to the transfer of residential property, however for the purpose of this information sheet, the information will only deal with the Conveyancers roll in the transfer of residential property. To qualify as a Conveyancer you must first become an Attorney. The Deeds Office is the Government Institution which records the ownership of property, mortgage bonds registered over the property and other rights related to property. The entire transfer process and the procedure followed at the Deeds Office are regulated by the Deeds Registrary Act. In terms thereof only Conveyancers may sign documents needed to transfer property or register a mortgage bond. The information lodged with the Deeds Office, all documents related thereto and the co-ordination of the transfer process in compliance with the Act is the responsibility of the Conveyancer. WHO CHOOSES THE CONVEYANCER The Seller chooses the Conveyancer. The Conveyancer will represent both Seller and Purchaser in order to transfer the property. If the parties become involved in a dispute, the Conveyancer will normally represent the Seller, unless the Purchaser is already an existing client of the Conveyancer. In our system of property transfers, the Purchaser pays the Conveyancing costs. The costs are based on a tariff recommended by the Law Society. For further information regarding transfer and bond costs, log onto our website www.ltinc.co.za and click on our Cost Calculator.
THE CONVEYANCING PROCESS TRANSFER PROCESS RECEIVE DEED OF SALE R E Q U E S T TITLE DEED FROM SELLER/BONDHOLDER R E Q U E S T BOND CANCELLATION FIGURES FROM EXISTING BONDHOLDER R E Q U E S T FICA DOCUMENTS FROM SELLER/PURCHASER R E Q U E S T RATES CLEARANCE FIGURES FROM LOCAL AUTHORITY R E Q U E S T LEVY CLEARANCE FIGURES FROM BODY CORPORATE/HOA OR MANAGING AGENT FULFILLMENT OF SUSPENSIVE CONDITIONS R E C E I V E B O N D G R A N T R E C E I V E CANCELLATION FIGURES AND TITLE DEED DRAW TRANSFER DOCUMENTS PAYMENT OF COSTS & SIGNATURE OF DOCUMENTS TRANSFERRING ATTORNEY REQUESTS PAYMENT OF DEPOSIT IN TERMS OF THE DEEDS OF SALE TRANSFERRING ATTORNEY FURNISHES BOND ATTORNEY WITH COPY OF TITLE DEED AND GUARANTEE REQUIREMENTS SELLER/PURCHASER REQUESTED TO SIGN TRANSFER DOCUMENTS AND PAY TRANSFER COSTS PURCHASER REQUESTED TO SIGN BOND REGISTRATION DOCUMENTS AND PAY BOND REGISTRATION COSTS TRANSFERRING ATTORNEY LODGES TRANSFER DUTY WITH RECEIVER OF REVENUE VIA E-FILLING TRANSFERRING ATTORNEY RECEIVES TRANSFER DUTY RECEIPT TRANSFERRING ATTORNEY RECEIVES CLEARANCE FIGURES TRANSFERRING ATTORNEY PAYS LOCAL AUTHORITY AND RECEIVES CLEARANCE CERTIFICATE GUARANTEES TRANSFERRING ATTORNEY RECEIVES GUARANTEES FROM BOND ATTORNEY TRANSFERRING ATTORNEY SENDS GUARANTEE TO BOND CANCELLATION ATTORNEY LODGMENT AT DEEDS OFFICE TRANSFERRING ATTORNEY ARRANGES WITH BOND & CANCELLATION ATTORNEY TO LODGE AT D E E D S O F F I C E D O C UMENT EXAMINATION PROCESS AT DEEDS OFFICE TAKES APPROX 8-10 WORKING DAYS REGISTRATION THE TRANSFER OF PROPERTY, REGISTRATION OF PURCHASERS NEW BOND AND CANCELLATION OF SELLERS BOND REGISTERED SIMULTANEOUSLY GUARANTEES ELECTRONICALLY PAID OR TRANSFERRING ATTORNEYS PRESENTS GUARANTEE FOR PAYMENT TRANSFERRING ATTORNEY RECEIVES PAYMENT OF GUARANTEES, FINAL STATEMENTS DRAWN AND PROCEEDS DISTRIBUTED The above is only a brief guide and should not be interpreted as being an extensive lay-out of all the steps to effect transfer of a property. The entire procedure should take between 3 8 weeks, failing any unforeseen circumstances
BOND PROCESS Bond Registration Attorney receives instructions from the financial institution in question, to attend to the bond registration on behalf of the Purchaser/Mortgagor (hereinafter referred to as Mortgagor ). Mortgagor is contacted to ascertain whether they will be proceeding with the mortgage bond. If the Mortgagor intends to proceed with the bond a pre-loan agreement is forwarded to the Mortgagor for his perusal and signature. Once the Mortgagor accepts the bond, the financial institution electronically instructs the bond registration attorney to attend to the registration of the bond. The bond registration attorney requests documentary proof in compliance with the Financial Intelligence Centre Act from the Mortgagor, i.e., proof of identity, proof of residential address and marital status. The bond registration attorney requests the draft deed and guarantee requirements from the transferring attorney. Upon receipt of the draft deed and cancellation requirements, the bond registration attorney proceeds to draft the bond documents in compliance with the Deeds Registry Act. The Conveyancer is responsible for the correctness and validity of the information contained in the bond registration documents. The Bond registration attorney calls for the Mortgagor to attend at the office of the bond registration attorney in order to sign the bond registration documents and pay the bond registration fees. Guarantees are then forwarded to the transferring attorneys who forward same to the cancellation attorneys. The bond registration attorney obtains approval from the financial institution to proceed with lodgment and registration. The bond registration attorney waits for the transferring attorney to arrange lodgement of the various registration documents simultaneously in the Deeds office. The documents are lodged in the Deeds Office and follow a process of examination (which takes approximately 8-10 working days). If there are no notes and deeds are in order the Conveyancer executes the deeds before the Chief Registrar and hands same in for registration. The deeds which include the transfer documentation, the bond documentation and the cancellation documentation are then registered simultaneously. The bond registration attorney notifies the financial institution that the bond has been successfully registered and furnishes the bank electronically with the Authority for Payment. The guarantees are paid out by the financial institution within 24 hours of being notified of registration. Once the registered title deed and bond are returned to the transferring attorney by the Deeds Office and forwarded to the bond registration attorney the bond registration attorney returns the title deed and mortgage bond to the financial institution for safekeeping as security for the mortgage bond The above is only a brief guide and should not be interpreted as being an extensive lay-out of all the steps to effect transfer of a property. The entire procedure should take between 3 8 weeks, failing any unforeseen circumstances.
WHAT HAPPENS BETWEEN LODGEMENT AND REGISTRATION? DEED OFFICE PROCESS STEP 1:- STEP 2:- Documents lodged in Deeds Office Personal and Property printouts are done. Interdicts are checked STEP 4:- STEP 3:- First examination by Junior Examiner Deeds are sorted for distribution to the examiners STEP 5:- Second Examination by Senior Examiner STEP 6:- Third Examination by Monitor Examiner APPROXIMATELY 10 WORKING DAYS STEP 8:- Rejected Deeds sent for delivery STEP 7:- Deeds passed or rejected STEP 9:- Passed Deeds sent to Prep for notes to be dealt with by Attorney STEP 10:- If all in order Deeds are put forward for registration 5 TO 7 DAYS STEP 11:- Execution/Registration in Front of Chief Registrar
FINANCIAL INTELLIGENCE CENTRE ACT NO.38 0F 2001 The Financial Intelligence Centre Act ( FICA ) is an anti-money laundering legislation that was introduced to South Africa in 2003. In basic terms this Law aims to stop money laundering and to identify and prosecute those involved in such activities. In terms of FICA a firm of Attorneys is an Accountable Institution which is required to verify the identity of every Seller on whose behalf a property transfer is registered, as well as every Purchaser on whose behalf funds are invested. Failure by the Attorney to comply with FICA is an offense and can result in prosecution. Attorneys are also required to verify the identity of every mortgagor for whom a mortgage bond is registered. The various Banks have different requirements with regards to FICA. The common denominator however with each Bank is that the registration of each bond may not be affected until the Bank is satisfied with the FICA status of the mortgagor. In order to comply with the above, Attorneys require the following documentation in order to verify and certify a copy of same:- Natural Person Identity Document Proof of Marital Status (Marriage Certificate and Antenuptial Contract) Proof of Residence, not older than 3 months (e.g. Utility Bill) Proof of Income Tax Number (any correspondence received by SARS) Salary Slip not older than 3 months Legal Entity Company Memorandum & Articles of Association Letter of Incorporation CM49 CM31 Close Corporation Amended Founding Statement (CK1 or CK2) Trust Deed of Trust Letters of Authority In the case of a Legal Entity, we will also require proof of registered address and Tax Number, if applicable and all documents relating to a Natural Person as set out above for each director(s) / member(s) / trustee(s) of the Legal Entity.
TRANSFER DUTY Transfer Duty is a form of tax which is paid in terms of the Transfer Duty Act when a Purchaser buys immovable property. There are various exemptions to the payment of Transfer Duty, in which case a Transfer Duty Exemption Certificate must be obtained. SARS issues the Transfer Duty Receipt of the Transfer Duty Exemption Certificate after receiving necessary documents and payment from the Conveyancing Attorney. The Seller and Purchaser will sign Transfer Duty Declarations which calls for the disclosure of certain information:- Parties income tax numbers Various tax information related to the sale and Capital Gains Tax Various information on the status of the parties Tax information relating to the Estate Agent, if applicable Consideration paid for the property purchased Any outstanding tax issues a party to a transaction may have with SARS could create delays in the transfer process. Both Sellers and Purchasers should be encouraged to resolve any outstanding tax issues with SARS at an early stage, to avoid delays, as the Deeds Office will not register the transfer unless the Transfer Duty Receipts or Transfer Duty Exemption Certificates are lodged, and SARS will not issue a Transfer Duty Receipt or Transfer Duty Exemption unless the parties tax obligations are up to date.
RATES CLEARANCE CERTIFICATES Rates Clearance is a Certificate ( RCC ) a document received from the City Council that certifies that the Seller does not owe any money to the City Council. The Registrar of Deeds acts as a policeman on behalf of the City Council and will not transfer a property from the Seller to the Purchaser unless the Conveyancer presents a RCC with the documents lodged in the Deeds Office. Rates Clearances are required for both freehold and Sectional Title property. The Conveyancer calls on the City Council for Rates Clearance Figures. The figures are worked out by the City Council and not the Conveyancer. The RCC will include arrear rates and taxes, Water and Lights and will also include an advanced portion for a period of approximately 6 (six) months from date when the figures were requested. Once the figures are received, the Conveyancer will present them to the Seller and ask for payment, which payment will be forwarded to the City Council in order to obtain a RCC. Once the transfer is registered the Sellers account will normally be in credit due to the advanced portion paid by the Conveyancing Attorney on behalf of the Seller to the City Council, as set out in the Clearance Figures. The Conveyancer will not refund any funds to the Seller in respect of the advanced portion. The City Council is responsible for refunding any credit portion still due to the Seller. The process to obtain the Sellers refund usually takes the City Council approximately 6 9 months. The Seller has to complete a Cancellation of Consumer Agreement form and lodge same with the nearest Local Municipality. The City Council will only attend to the to the journals on the Sellers account and issue the refund cheque to the Seller, once the Purchaser has paid a deposit and opened a new Service Account for Water and Electricity. Until the Purchaser has opened a new Service Account as aforesaid, the Seller will continue to receive monthly statements often reflecting the incorrect status. The Seller can only apply for the refund and the Purchaser can only open the new account once the transfer has been registered in the Deeds Office. Both Seller and Purchaser will receive a letter from the Conveyancing Attorney confirming the date of registration, which is to be taken to the City Council when applying for the refund and opening the new Service Account. The process for the Purchaser to open a new Service Account(Water and Lights Account) can be done in one day. The Purchaser must attend at the City Council either at 61 Jorrison Street, Braamfontein or the nearest Local Municipality to open Service account with the City Council. Then the City Council will start billing the Purchaser. The Purchaser will need the following additional documents in order to open a new account: INDIVIDUAL APPLICANT Identity document of Applicant Identity document of Spouse Bank Account details of Applicant Meter Numbers Copy of Offer to Purchase and letter from Conveyancing Attorney Sufficient funds to pay deposit, which will be equal to the average rates and taxes, sewerage and refuse charge for 3 (three) months Application form for the service LEGAL ENTITY PTY, CC or Trust documents Identity Documents of all Directors, Members and Trustees Letter / Resolution authorising signatory to open account on behalf of entity
ELECTRICAL COMPLIANCE CERTIFICATE An Electrical Compliance Certificate ( ECC ) is a certificate issued by a qualified electrician which certifies that the electrical installation in your home is safe according to the minimum standards set by legislation. Only an accredited person, i.e. a qualified electrician who is registered with the Electrical Board can issue an ECC. The relevant legislation provides that every electrical installation must have a certificate of compliance. This means that every homeowner must have a valid ECC and that the electrical installation is safe when the Purchaser takes transfer of the home. The Seller is normally responsible for obtaining and paying for the ECC and will have to pay for any alterations or repairs that may be necessary in order to issue the ECC. An ECC may sometimes also be a condition of the bond when the Purchaser uses bond finance to purchase a home. It must be stressed however that there is a legal obligation on the Seller to have an ECC that is valid in law.
Deeds office process Guide CONTACT US Physical Address 484 Ontdekkers Road Florida Hills Gauteng 1709 Postal Address PO Box 874 Florida Hills 1716 Docex 22, Roodepoort Tel: 011-472-2828 Fax:011-472-2835 Email:info@ltinc.co.za Website: www.ltinc.co.za 11