The following is an attempt to explain the general procedure that is followed in most sales:
The first step
The first step in any sale is that the Purchaser and the Seller must sign a written Agreement. An Offer to Purchase, when signed by the Seller, becomes a binding Agreement of Sale.
Usually the Sale is subject to a loan (to be secured by a mortgage bond) from a bank. The sale will become binding between the parties only when the bond is approved. The transfer will, therefore, proceed when the bond has in fact been granted. The bank appoints a Conveyancer to register the Bond.
Repayment of seller's bond
Usually the Seller has a mortgage bond over the property, which must be repaid and cancelled. The Seller's Conveyancer gives notice of repayment to the Bank. The Bank appoints a Conveyancer to cancel the bond and at the same time informs the Seller's Conveyancer of the amount needed for repayment. The Seller's Conveyancer arranges a letter of undertaking (guarantee) whereby the Bank granting the Purchaser's new bond repays the Seller's old bond on registration. On receipt of the guarantee a Consent to cancel the bond is signed.
Signature of documents
Although the Seller and the Purchaser have signed the Agreement of Sale, certain other documents must still be signed at the office of the Conveyancer to comply with the formalities in order to effect the registration of the transfer. The Purchaser must also sign the bond documents at the office of the Conveyancer attending to the registration of the Purchaser's bond. The Purchaser pays the costs of registering the bond and the costs of registering the transfer.
The Seller's Conveyancer collects the purchase price and accounts to the Seller when registration takes place.
The Conveyancer is required to disclose the full names, identity number and marital status of the Purchaser and the Seller in the transfer and bond documents. Copies of Identity documents, Marriage Certificates and any Antenuptial Contracts must, therefore, be obtained.
Rates clearance and transfer duty
Before the transfer can be registered the Conveyancer must submit proof to the Deeds Office that all outstanding Rates and Transfer Duty have been paid. The Rates Clearance Certificate is obtained from the Municipality, will issue such a Certificate only if all the Rates for the current rates year are paid. In some cases the Conveyancer will pay the outstanding Rates on behalf of the Seller and account to the Seller after registration of transfer. The Rates year commences on 1st July and ends on 30th June in the following year. Transfer Duty is paid to the Receiver of Revenue who issues a Transfer Duty Receipt.
If the Conveyancer has paid the rates, the Seller should stop paying monthly rates, otherwise a duplication of payments will occur.
The Deeds Office
Registrations for Port Elizabeth and surrounding areas take place in the Deeds Office in Cape Town.
How registration takes place
When all the documents have been signed and formalities met, the transfer documents, new bond documents and cancellation of the old bond are forwarded separately to the Conveyancers in Cape Town. The Cape Town Conveyancers liaise with each other and arrange for the documents to be lodged simultaneously in the Deeds Office for registration. The examiners in the Deeds Office check the documents to ensure that they comply with all legal requirements after which the transactions can be registered, provided the Purchaser has met all the financial requirements.
Time period until registration
From the above it will be seen that the conveyancing process is a fairly complicated one. There are a number of parties, institutions and officials involved, and delays are possible at any stage. Provided everything runs smoothly, transfer should take approximately two months from the time the Conveyancer receives the Sale Agreement. Unforeseen difficulties could extend this period. Sometimes transfer is delayed to coincide with the date of occupation.
Need for a conveyancer
The South African Deeds registration system is one of the best in the world and disputes relating to ownership are extremely rare. This is why insurance against being deprived of ownership is unknown in South Africa. To ensure the continued existence of our excellent system of registration, and to protect the rights of the public, the law provides that only qualified Conveyancers having the necessary knowledge, skill, and attention to detail may attend to the transfer of property and related transactions. When all the checks have been made and all the procedures followed by the Conveyancer, the new owner can be assured that his or her title to the property cannot be disputed.