GUIDE TO CONVEYANCING
Conveyancing describes the legal process
whereby a purchaser becomes the lawfully registered owner of
immovable property. It furthermore encompasses the cancellation and
registration of mortgage bonds.
Only an attorney who is also a
conveyancer may attend to the conveyancing of property and the
registration of mortgage bonds. The conveyancer is usually
appointed by the Seller to transfer the immovable property although
this can be negotiated between the parties.
STEPS IN THE CONVEYANCING PROCESS
The first requirement for the process to
start is a valid deed of sale. Such deed of sale will guide the
conveyancer in the performance of his duty. A deed of sale is an
agreement between a Seller and a Purchaser, reduced to writing and
containing the conditions for the purchase and sale of an immovable
property. It normally takes the form of a document entitled "Offer
to Purchase", which, once signed by a Purchaser and Seller, becomes
a Deed of Sale.
As soon as the Conveyancer receives the
Deed of Sale, he will prepare the necessary documents to give effect
to transfer and will then contact both the Purchaser and Seller for
signing. The documents to be signed will include the following:
Power of Attorney by the
Seller to Pass Transfer
Affidavits by the Seller and
Purchaser in respect of their solvency, marital status, identity
numbers, income tax numbers, and physical and postal addresses
Transfer Duty and/or Value
When the above documents are ready, the
Conveyancer will arrange an appointment for the signature of the
documents. During the appointment, the Conveyancer will present his
account to the Purchaser for settlement.
As soon as the above costs have been
paid, the Conveyancer will pay the necessary transfer duty to SARS
and apply electronically for a transfer duty receipt. The
Conveyancer will furthermore pay all rates and taxes on the property
to the end of the current rates year and apply for a Rates Clearance
On receipt of the Transfer Duty receipt
and Rates Clearance Certificate, the Conveyancer will draft the new
Deed of Transfer and then lodge all documents via a correspondent in
the Deeds Office for examination, which examination takes
approximately 10 working days.
Simultaneously with lodgement of the
transfer documents in the Deeds Office, all present mortgage bonds
to be cancelled and new bonds to be registered, will also be lodged.
On receipt of a new Deed of Sale, the
Conveyancer will immediately conduct a Deeds Office search to inter
alia obtain full details of the mortgage bonds held over the
property. They will then ask the present bondholder (normally a
bank) to advise them of the amount required to pay off the existing
bond, and request them to instruct their attorneys to prepare
documents for the cancellation of the existing bond.
The bondholder will in due course advise
the Conveyancer of the exact amount required for the cancellation of
the bond. The Conveyancer will then either provide the attorneys of
the bondholder with a guarantee or an undertaking for the amount
required to cancel the bond.
After the Deed of Sale has been signed
by both parties, the purchaser, if he requires a mortgage bond to
finance the Purchase Price, will apply directly to a bank or through
a mortgage originator for a bond. After approval of such bond the
bank will appoint attorneys who will prepare their own documentation
and arrange for the Purchaser to sign same and pay their costs.
LODGEMENT AND REGISTRATION
Cancellation of the existing bond,
transfer of the property and registration of a new bond, happens
simultaneously in the deeds office.
The deeds office is a government
registry of immovable property and all right in such property. The
personnel in the deeds office will scrutinize all documents to
ensure that they comply with all relevant legislation and
regulations. When they are satisfied, the Conveyancer will be
informed and transfer of the property can be registered in the name
of the purchaser. The existing bond and new bond (if applicable)
are registered simultaneously.
WHAT ARE THE COSTS INVOLVED?
The cost relating to the transfer of
immovable property falls into two main categories. A distinction
must be drawn between professional fees and disbursements made by
the Conveyancer on behalf of the parties.
The professional fees charged by the
Conveyancer are in accordance with guidelines prescribed by the Law
Society of South Africa, which makes provision for a sliding scale
based on the price of the property. The Purchaser usually pays the
Disbursements will normally be transfer
duty or value added tax, and pro-rata rates and/or levies payable to
the relevant local authority and/or body corporate. (For the
calculation of the above please see:
The Conveyancer collects the
following funds before registration from the Purchaser and Seller:
• The Seller
- Outstanding amounts due to the local
authority and/or Body Corporate
- Bond cancellation cost
• The Purchaser
- Pro-rata provision for rates and
taxes and/or levies due to the local authority and/or Body
- Registration fees of the Deeds Office
- Professional fees
- Transfer duty and/or VAT
Transfer duty is currently calculated
Applicable to transactions entere into
after February 2011, are
R0 - R750 000 of Purchase Price
R750 001 - R1 250 000 of Purchase price
R1 250 001 - R1 750 000
R1 750 001 - R2 250 000
R2 250 000 and above
HOW LONG DOES THE PROCESS TAKE?
Conveyancing is a complex field
requiring knowledge, skill and attention to
detail on the part of the Conveyancer.
A number of parties are involved,
The seller (and spouse)
The purchaser (and spouse)
The institution which previously
gave the bond to the seller (and the conveyancer acting
on its behalf)
The Receiver of Revenue
The municipality or local authority
The institution which gives the new
bond to the purchaser (and the conveyancer acting on its
Registrar of Deeds
The buyer of the purchaser's
previous property (which the purchaser had to sell to obtain the
cash portion of the purchase price)
The conveyancer acting for the
purchaser in that transaction
The institutions which gave and are
giving the loans in that transaction (and their conveyancers)
and so forth.
Very often there are a whole chain of
transactions linked up in this fashion.
The Conveyancer has to complete the
arrangements with all these parties. Because human beings and
various institutions are involved in each instance, delays are
possible at any stage of the transaction. The Conveyancer knows
exactly when and how to use legal methods to compel delaying parties
to act more expeditiously.
It is important, therefore, that the
purchaser should sign the documents and pay the required amounts as
soon as the conveyancer calls on him to do so; this helps to ensure
that there are no unnecessary delays.
The length of time it takes to get the
transaction into the Deeds Office is dependent on the reaction time
taken by each and every one of the mentioned parties. The usual
time taken by the Deeds Office to inspect all the documents lodged
by the different conveyancers for a specific transaction is ten
On average, the time taken to register
the transfer of property, where a bond is involved, will be two to
three months from the date that the conveyancer is instructed.
Unforseen difficulties such as the death
of one of the parties, attachment of the property by a creditor of
the seller and so forth may cause the period to be extended.
WHY IS A CONVEYANCER NECESSARY?
Most people are accustomed to doing much
of their personal business without the need of a legal or other
adviser. However, a great deal is at stake in the transfer of fixed
property. It is generally the largest single asset that a person
owns and the transaction for the purchase or sale of a fixed property
is probably the most important contract undertaken by individuals.
The law therefore, provides that only
qualified conveyancers may attend to the transfer of fixed property
and related transactions. This is not only to give proper
protection to the rights and interest of the public, but also to
safeguard the integrity of the South African land registration
system, which is universally regarded as one of the best in the
When all the checks have been made, all
the procedures followed by the conveyancer and the property has been
registered in the name of the purchaser, the purchaser can be
assured that he or she has the best title to the property.
The information contained in this Guide
provides a brief summary. It is highly recommended that any
Purcahser or Seller consult one of our expert property and tax
attorneys prior to making and Offer to Purchase or accepting such
Offer. This will enable us to help you, having due regard to your
Should you require any further
assistance, we invite you to contact any of our conveyancers,