Information guide to conveyancing

1. What is conveyancing?

Conveyancing describes the legal procedure whereby ownership of immovable property is changed (i.e. ownership is "conveyed" from the existing owner to the purchaser).

2. Conveyancer’s actions on receipt of Deed of Sale

a. It is self-explanatory that the Conveyancer in performing his duty will be guided by the contents of the Agreement concluded between the buyer and the seller as recorded in the Deed of Sale. The Conveyancer therefore, is compelled to "Bake the Cake" in accordance with the "Recipe" prepared for us in advance.

b. On receipt of the Deed of Sale, the Conveyancer will immediately conduct a Deeds Office search. This search will reveal the following:

• The full Deeds Office description of the property being sold.
• The full details of the current registered owner.
• The full details of the bonds held over the property.
• The full details of any interdicts recorded against the property.

3. Existing bond on the property

a. The Conveyancer will simultaneously with the above, address a letter to the current bondholder advising the bondholder of the fact that the property has been sold and calling upon the bondholder to forward the Title Deed to the Conveyancer. He will simultaneously ask the bondholder to advise the Conveyancer of the amount required to pay off the existing bond on registration of transfer and request the bondholder to instruct his own attorneys to prepare an appropriate Consent to Cancellation of the existing bond. This latter form will be prepared by the bondholder's attorneys, signed by the bondholder and returned for purpose of subsequent lodgement at the Deeds Office. As most financial institutions are unable to trace the file in which the Title deed and Bond are retained without an account number, it is important that the particulars of the bond account number be reflected in the information section of the Deed of Sale.

b. The Conveyancing Attorney will in due course receive a response to his letter to the existing bondholder. This letter would have enclosed the Title Deed and would have stated the amounts required by the bondholder on cancellation of the bond. Should the purchase price be sufficient, the Conveyancing attorney will address a letter to the attorneys representing the bondholder, promising payment of the amount required on date of registration at the Deeds Office.

4. The role of the municipality

The Conveyancer will simultaneously write to the Municipal authority having jurisdiction over the area in which the property is situated and will request from them the following information/documentation:

a. A Valuation Certificate in which the Municipal Valuation of the property is stated - this document is required for purposes of obtaining a transfer duty receipt from the Receiver of Revenue.

b. The amount which the Municipal Authority requires payment of as a prerequisite to issuing a Rates Clearance Certificate - in terms of the Law, no transfer of any property may be registered in the Deeds Office unless the relevant Municipal Authority has provided permission. This permission is termed a 'Rates Clearance". It is important to note that in obtaining a Rates Clearance, one is compelled (regardless of any arrangement the Seller might otherwise have had with the Municipal Authority) to pay the full amount of rates payable on the property to the end of the current rates year. Municipal Authorities furthermore demand various other categories of payment in advance e.g. water and service charges. Part of the amount payable to the Municipal Authority will be for the account of the seller and part for the account of the purchaser.

5. Preparation of preliminary documents

On receipt of the Deeds Office particulars and subject to all suspensive conditions having been fulfilled, the Conveyancing attorney will proceed to prepare his "preliminary documentation". These documents comprise the following:

a. A Power of Attorney in terms of which the seller authorises the Conveyancing attorney to act on his behalf and appear at the Deeds Office for purposes of registering the transfer of ownership at the end of the day. The document will have to be signed by the seller personally or by somebody authorised in terms of a written Power of Attorney to sign such document on behalf of the seller. It is therefore self-explanatory that if the seller is going to be away during the relevant period, the transfer will be delayed unless adequate arrangements are made before his departure.

b. Declarations by purchaser and seller to the Receiver of Revenue. As you are no doubt aware, transfer duty is payable to the Receiver of Revenue arising from sales of immovable property. This transfer duty is a percentage of the purchase price. The Receiver of Revenue is therefore quite anxious to ensure that he is fully advised of the actual purchase price and that such purchase price furthermore elates to a fair and market related price. The declarations which the buyer and seller will therefore have to sign serve to conform all the above facts. Should the purchaser and the seller therefore have reached some "private agreement" in terms of which the purchase price as stated in the Deed of Sale is not a proper reflection of the purchase price, then these declarations will serve to frustrate the endeavours of the parties as stated above.

c. Affidavits to be signed by the purchaser and the seller, confirming there correct name, identity numbers, marital status and solvency.

6. Signature and costs

When these documents are ready, the parties will be contacted by the Conveyancing attorneys with a view to arranging an appointment for the signature of the documents. On signature of the documents, the Conveyancing attorneys will ask the purchaser to settle the transfer costs. The account which the Conveyancer will present will comprise four elements being the following:

• The Conveyancer's own fees plus VAT thereon
• The cost of the valuation certificate (See paragraph 4a)
• The transfer duty
• Deeds Office Fee

It is important that the purchaser settle these costs at least one month before scheduled date of transfer, as the Conveyancer is required to pay the transfer duty to the Receiver of Revenue before one may approach the Deeds Office. The Conveyancer will simultaneously recover from the purchaser his pro rata share of rates and taxes in order that a Rates clearance can also be obtained. As soon as these costs have been paid, the Conveyancer will forward his cheque plus supporting documentation to the Receiver of Revenue for the issue of a transfer duty receipt. A cheque will simultaneously be sent to the Municipal Authority for purposes of the issue of a Rates Clearance Certificate.

7. Purchaser’s bond

In the interim the Conveyancing attorney will receive notification from the attorneys instructed by the financial institution who will be granting the purchaser a bond advising of their identity and of the nature and extent of their instructions. The Conveyancing attorney will immediately send to these "bond attorneys", a draft copy of the new title deed of the property. This document is termed the "flysheet". This document enables the bond attorneys to determine the description of the property which is to be bonded and furthermore to determine the full details of the purchaser. The bond attorneys will then prepare their own documentation and arrange for the purchaser to call at their offices to sign their papers and pay their costs.

8. Final phase

When everybody is ready (the bond attorneys documents are signed, the bond cancellations attorneys consent to cancellations in their possession and duly signed by the bond holder, the transfer duty receipt and rates clearance have been received), the Conveyancing attorney will contact all the other attorneys involved and arrange simultaneously "lodgement" at the Deeds Office. On the pre-arranged date all the attorneys simultaneously hand their folders of paper into the Deeds Office. These papers are then collated by the Deeds office and allocated to a specific Examiner.

The Deeds Office Examiner inspects all the documents, and if found to be on order, approves the documents for registration. This procedure in the Deeds Office takes approximately ten days. If any difficulties are discovered in any of the papers, the documents are 'rejected". If the documents are approved for registration, the Conveyancing attorney, after ensuring that all the finances for the transaction have either been paid or alternatively secured, will arrange with all the attorneys concerned for the actual registration to take place. At the moment of registration, ownership passes from the seller to the purchaser and the transaction is complete.

9. How long does it take?

It is self-explanatory from the above that that it is very difficult to estimate precisely how long a transfer should take from the time that the Conveyancing attorney receives his instructions. If one is forced to make an estimate, then one can assume that if all the parties involved in the transaction perform their functions timeously, that the entire transaction could be completed within a period of six to eight weeks from the time of receipt of the initial Deed of Sale.

Miltons Matsemela Used with permission