The property ownership transfer process explained.
After weeks of house hunting you have found the perfect home, your offer to purchase has been accepted, and your bond application has been approved by the bank. What now?
Legal
Once the seller has accepted your offer to purchase and your bond is approved, the transferring and bond attorneys step in.
The transferring attorney is responsible for registering the property in the name of the new buyer. He will obtain FICA documents (ID and proof of residence) from you and seller and then apply for the seller’s bond cancellation figures. He also applies for the transfer duty receipts and rates clearance certificate from the municipality in order to register the property in your name.
The bond attorney is selected by the bank or the bond originator, serves on the panel of the bank providing the loan and is authorised to register the bond.
The seller usually appoints the transferring attorney. However, if you have your own attorney who will charge lower fees, then you may request that this attorney be appointed instead.
The attorneys will contact you to undersign the documents necessary for transfer to take place.
You will be asked to sign an affidavit, a transfer duty receipt and the bond documentation.
The seller needs to sign an affidavit, a power of attorney and a transfer duty receipt.
The registration of the transfer and the payment of the bond amount are linked and will take place simultaneously in the Deeds Office. The one cannot take place without the other, as the property is the bank’s security for providing the bond.
The waiting game
The process of transferring ownership of a property from seller to buyer can take from six weeks to three months - or even longer if there are unforeseen problems, for example, if the rates clearance certificate is delayed due to infrastructure problems.
This can be frustrating when you are impatient to move into your new home as soon as possible.
Occupational rent
But you don’t have to wait for the transfer process to be completed before moving in, provided the deed of sale makes provision for occupational rental to be paid to the seller if you occupy the property before the date of registration.
If the initial deed of sale doesn’t make provision for this, an addendum can be added. This clause will stipulate the amount of occupational rent, which is payable one month in advance. In the event of registration taking place during the occupational rent period, the amount payable is calculated pro-rata.
Costs
Transfer duty is a tax payable to the South African Revenue Service (SARS) whenever ownership of fixed property with a purchase price of more than R900 000 takes place. Although properties of R900 000 or less do not attract transfer duty, there are other transfer costs to take into account.
These include:
- Registration fees payable to the Deeds Office.
- Rates clearance fees payable to the municipality.
- Professional fees payable to the bond and transferring attorneys.
Rates clearance and deeds registration fees are calculated according to the purchase price and bond value of the property. Attorneys’ professional fees are prescribed by the Registrar of Deeds, which attorneys must adhere to.
In some cases transfer fees can be added to the bond amount that is approved. However, having the cash on hand to cover these costs will save you money in the long run.
Registration
Once all the documents have been signed and monies paid over, the transferring attorney lodges all the required documents, including the new bond and the old bond cancellation, with the Deeds Office. It can takes eight to 10 working days for these to be examined and registered.
