Understanding Property Transfers: A Simplified Guide
Whether you’re buying or selling property, understanding the process of property transfer is crucial to ensuring a smooth transaction. Here’s a quick breakdown of how property transfers work in South Africa.
- The Offer to Purchase (OTP)
The process starts when the buyer and seller agree on the terms of the sale. This agreement is formalised in an Offer to Purchase (OTP), which includes key details like the purchase price, special conditions, and timelines. Attorneys draft Offer to Purchase agreements.
- Choosing a Conveyancer
The norm is for the seller to choose the conveyancer, but there is no law preventing the buyer from including a preferred conveyancer in their OTP or from the parties coming to an agreement regarding the conveyancer appointment before, during or even after the signing of the OTP. However, it is important to be aware that recent changes in the law do prohibit a property practitioner or estate agent from selecting a conveyancer on behalf of the parties, and from influencing the choice of a conveyancer. These changes have been welcomed in an effort to address untoward practices that have plagued the professions.
The conveyancer is an attorney who has specialised in property law and transfers, and who is qualified to handle all the legalities involved in transferring ownership of the property. They ensure that all documentation is correct, and the transaction complies with the law.
- Clearing the Property’s Legal Status
The conveyancer conducts various checks, such as ensuring the property has no unpaid rates or taxes, verifying the property’s title deed, checking for any conditions applicable to the property or the transfer thereof, checking for any active endorsements or interdicts on the property.
- Obtaining Clearance Certificates and Consents
Before the property can be transferred, the conveyancer must obtain a clearance certificate from the local municipality, confirming that all outstanding property rates, taxes, and municipal charges have been paid by the seller.
The conveyancer will also apply for levy clearance certificates and consents, if required.
- Transfer Duty & Costs
The buyer is responsible for paying transfer duty, which is a tax calculated based on the purchase price of the property and which tax is payable to SARS. Transfer costs (including legal fees) are also paid at this stage, with the conveyancer providing a detailed pro-forma invoice.
- Bond cancellation and bond registration
The conveyancer will make contact with the relevant bond cancellation and bond registration attorneys, as applicable. The conveyancer will also provide the required undertakings and request bank guarantees as applicable.
- Registration at the Deeds Office
Once everything is in order, the conveyancer submits the transfer documents to the Deeds Office for registration. This is where the property officially changes ownership from the seller to the buyer.
- New Ownership
Once the property transfer is registered, the buyer becomes the legal owner of the property. The conveyancer will provide the buyer with the original new Title Deed once it is released by the Deeds Office, officially marking the transfer of ownership. In instances where there is a bond registered then the original Title Deed must be sent to the bank and a copy thereof is given to the buyer for their records. The buyer can obtain the original Title Deed from the bank once their bond has been repaid and accordingly cancelled on the Title Deed.
Why is this process important?
The property transfer process ensures that ownership is legally recognised and protects the rights of both the buyer and seller. Without it, a sale is not complete and the transfer of ownership is not legally binding.
If you need assistance with property transfers or have any questions, feel free to get in touch! We are here to guide you through every step of the process and to always look after your best interests.
#Conveyancing #PropertyTransfer #SouthAfricaProperty #LegalAdvice #HomeBuying #RealEstate #PropertyLaw #DeedsOffice #FirstTimeHomeBuyers