The Transfer Process
In general, a transfer takes approximately 7 – 8 weeks to complete, and this is conditional on all suspensive conditions being fulfilled. For example, if the purchaser is still in the process of obtaining a bond, the time taken to secure the bond will be added to this time frame.
On some occasions, it may take less time; however, this is the exception, not the rule. Do not let any attorney try to convince you otherwise.
The transfer process is a very specific one, and no shortcuts can be taken. It is paramount that, for attorneys to attend to the registration of a transaction within this time frame or any other agreed time frame, both the buyer and seller cooperate diligently with the attorneys.
Step-by-step summary of the process:
– Open a file and send all parties a letter acknowledging receipt, asking for certain information including FICA documentation; calling for the deposit (if payable) and requesting payment of costs (including transfer duty); awaiting confirmation of bond approval (if applicable), sale of another property, or completion of any other suspensive conditions.
– Obtain a copy of the title deed from the deeds office and conduct a deeds office search to check on marital status; determine whether any interdicts (attachments or any other types of restraints) exist over the property that may delay or obstruct registration.
– Send a pro forma statement of costs to the buyer.
– Liaise with the seller’s existing bondholder (if the property is bonded) to obtain bond cancellation figures and to obtain the original title deed. If the property is not bonded, the seller is required to provide the conveyancer with the original title deed.
– If the original title deed is lost, a separate application must be made to obtain a certified copy from the Deeds Office at an additional cost to the seller.
– If the buyer has applied for a loan, the attorney will liaise with the bond registration attorneys and request guarantees to pay the purchase price (less any deposit if payable) upon registration of transfer. (Kindly note that the bond is registered with the transfer of the property on the same day. A fee is also payable to the bond registration attorney, separate from the transfer fee.)
– Prepare the documentation necessary to give effect to the transfer (Power of Attorney to give transfer; FICA affidavits; Transfer Duty declarations, etc.).
– Meet with the buyer and seller to sign the transfer documents.
– Write to the managing agent (if the property is a sectional title) or Homeowner’s Association (if the property forms part of an HOA) to request levy figures and/or a letter of consent to the transfer. (If the property is a sectional title, we must determine what levies will be payable on transfer (if anything) and ensure that we will have sufficient funds. If it falls under an HOA, it is always a title deed condition that written consent to transfer is obtained from the HOA. We are finding more and more properties that have an HOA title deed condition, only to discover that the HOA was never formed or has lapsed. Such transfers can be delayed by weeks or months because then we have to scramble to re-establish the HOA and ensure that someone is appointed and authorised to sign the consent form.)
– Apply for and obtain rates clearance figures from the local authority. Upon receipt, convey this information to the seller and call for payment. Once payment is received, we pay this to the council and obtain a rates clearance certificate, which is required by law.
– Assuming the buyer is financially prepared, we receive our costs and pay transfer duty to SARS. We obtain a transfer duty receipt. Here is where we hope that the seller or property practitioner does not have any issues with SARS!
– Call for compliance certificates (without which we may NOT register the transfer).
– Prepare the deeds for lodgement by checking the draft title deed against the existing one.
– Liaise with bond registration attorneys/bond cancellation attorneys (if the property being sold is also bonded) and linked transfers, to agree on the lodgement date.
– Lodge deeds at the deeds office.
– Anything from 7 working days to around 10 working days after lodgement, the deeds will “come upon prep.” They may have “notes” raised by the examiners, which may take a day or two to attend to. If this is the case, and once we have attended to the address, we have 5 working days (including the day the deeds come up on prep) to “hand in,” and then we register on the following day. Currently, in the Cape Town deeds office, we are receiving the original title deeds returned to us within 3-4 working days after transfer to be delivered for onward transmission to the new owner (if it was a cash deal) or the bank (if the property was bonded). This turnaround time varies month to month.
Things that commonly delay transfers:
– If either party is not available to sign the transfer documents; sale agreements containing errors that require correction by us!
– If the managing agent of a sectional title or HOA delays in providing the required consent, if the City Council delays in providing rates clearance figures, or if the seller disputes any arrears that the council is claiming; HOAs that have lapsed.
– If either party delays payment of (for example):
– Advance rates collection required (payable by the seller) to obtain a rates clearance certificate, which is compulsory.
– Transfer duty by the buyer (a transfer cannot be lodged without a transfer duty receipt being issued by SARS).
– Delays in presenting guarantees where it is a cash buyer.
– Attending to repair work to the property that may have been made a condition of sale before transfer.
– If the seller is in arrears with their bond and the selling price will not leave sufficient net residue (after paying the practitioner’s commission) to settle the bond, this will always delay matters significantly because the bank must first decide whether it will write off the loss or insist on the seller signing an Acknowledgement of Debt.
– Failure by the seller to arrange for compliance certificates.
– Lost original title deeds.
– Change in marital status or death. So, keep your buyers and sellers alive, for heaven’s sake! 😎