Property Advice

Understanding Conveyancing Costs

Private Property South Africa
Private Property Reporter |
Understanding Conveyancing Costs

What is a conveyancer?

Conveyancers are qualified attorneys who specialise in property law. Their role is to deal with all matters related to the law and the transactions with the Deed Office, which is responsible for recording and maintaining property ownership records and other rights related to properties.

When you buy or sell property, or register a home loan over a property, a conveyancer has to ensure the transfer from the seller to the buyer takes place, and, if required, will play a role in registering a home loan so the buyer can pay for the property.

Why role of the conveyancers

By law, only conveyancers can sign and prepare the documents required for the transfer of a property. In this they need to ensure that all the legal requirements are complied with and will ensure that the buyers and sellers similarly comply with the law. Three points to note are:

  • The transferring conveyancer represents both parties; buyer and seller.
  • In a dispute between buyer and seller, the conveyancer represents the seller.
  • The transferring conveyancer registers the home loan.

Three different conveyancers when a home loan is in play

It may seem onerous, but the process may require three different conveyancers when there is an existing home loan, and when the purchaser has applied for one. Bear in mind that a ‘bond’ is another word for ‘home loan’, as is the word mortgage.

  • The bond cancellation attorney
  • The bond registration attorney
  • The transfer attorney.

The conveyancing process:

Once the sale agreement has been finalised by the property practitioner, three types of processes come into play, some of which occur simultaneously:

Bond registration conveyancer

  • Registers the purchaser’s home loan.
  • Home loan is approved by the bank.
  • The bond conveyancer sources the title deed on the property, and engages with the transferring conveyancer for relevant documentation.
  • Once guarantee’s are received from the transferring conveyancer, the bond registration conveyancer presents those to the purchaser for signing and instructs the purchaser to pay home loan registration costs.
  • The bond conveyancer forwards guarantees to the transferring conveyancer.

Bond cancellation conveyancer

  • The bank holding the home loan receives a request from the transferring conveyancer to calculate the outstanding amount of the home loan, and issue cancellation figures and the title deed to the new bank’s cancellation conveyancer.
  • The bond cancellation conveyancer forwards a copy of the title deed and the cancellation figures to the transferring conveyancer.
  • The transferring conveyancer must forward cancellation guarantees to the bond cancellation conveyancer.

Bond transferring conveyancer

  • Requests cancellation figures and the release of the title deed from the cancellation conveyancer.
  • Requests any levy and rates clearance figures from the cancellation conveyancer if required.
  • Any other supporting documents from the seller’s home loan provider, are also requested.

Once the clearance figures are received, and guarantees have been issued by the new bond registration conveyancer, the transferring conveyancer draws up the transfer documents, and submits those to the new bond registration conveyancers, along with a copy of the draft title deed.

  • Purchaser and seller sign the transfer documents
  • Buyer pays transfer costs
  • Transfer duty clearance is acquired.

In receipt of the guarantees, the transferring conveyancer forwards those to the home loan cancellation conveyancer and starts the lodgement process at the Deeds Office.

Who pays for conveyancing?

It is usually the seller that chooses the conveyancer, and it is often the property practitioner that recommends such a firm because they have built up strong relationships with a number of those. However, it is the buyer who pays the transferring conveyancer. In some cases the buyer may request a particular conveyancer instead of the seller, and possible because of more affordable rates, or because of an existing relationship.

Costs

The cost of conveyancing is determined by the Law Society of South Africa (LSSA). Note, however, that the LSSA only provides a guideline, which allows some room for negotiation of the fees.

Value of Property or Bond

Guideline fees

  • R100 000 or less = R 6 110
  • Over R100 000 up to and including R500 000 = R6 110 plus R975 per 50 000 or part thereof above that
  • Over R500 000 up to and including R1 000 000 = R13 910 for the first R500 000 plus R1 885 per R100 000 or part thereof above that
  • Over R1 000 000 up to and including R5 000 000 = R23 335 for the first R1 000 000 plus R1 885 per R200 000 or part thereof above that
  • Over R5 000 000 = R61 035 for the first R5 000 000 plus R4 750 per R1 000 000 or part thereof above that

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