LEGAL PROCESS FROM SALE TO REGISTRATION OF TRANSFER

In South Africa ownership of property is registered in the Deeds Office for the area where the property is situated. This system of registering deeds ensures security of tenure for owners. The most common form of ownership is freehold title. The registration process is regulated by the Deeds Registration Act. Some other Acts which are also involved in the process are the Transfer Duty Act, the Value Added Tax Act and the Sectional Title Act. This latter Act regulates the transfer and ownership of units (i.e. sections) in a Sectional Title Scheme.

All contracts for the sale of immovable property have to be in writing. This contract must contain all the material terms of the agreement between the parties. An oral agreement to purchase property is unenforceable in South Africa.

Purchasers should ideally check the title deed. They should also examine the building plans lodged with the Municipality. Alternatively, Purchasers could make the sale subject to their obtaining a survey report regarding the property and the structures erected on it. The cost of the survey report would generally be for the cost of the Purchaser.

Once the sale has been completed, the seller's conveyancer (or, if the parties agree, the Purchaser's conveyancer) is duly instructed to pass transfer of the property to the purchaser.

Before the transfer of the property can be registered, the Conveyancer prepares certain documents to effect the transfer. These documents are:

• A Power of Attorney - this is signed by the Seller and auth0rised the Conveyancer to attend to the transfer on the Seller's behalf. The Power of Attorney is one of the documents that has to be lodged at the Deeds Office.
• Transfer Duty Declarations by both Seller and Purchaser. These declarations regarding the parties, the nature of their relationship and the purchase price, are lodged with the Receiver of Revenue who issues the necessary transfer duty receipt or transfer duty exemption (if the purchase price includes VAT). This receipt is one of the documents to be lodged at the Deeds Office
• Status Declarations - Both Seller and Purchaser need to confirm under oath their full names, identity numbers or dates of birth and their solvency before a Commissioner of Oaths. The Conveyancer is a Commissioner of Oaths
• Mortgage or bond document. If the Purchaser has obtained a loan to fund the purchase, it will be necessary to register a mortgage over the property as security for the loan. The Conveyancer attending to registration of the bond (usually not the Conveyancer attending to the transfer) will prepare documents for signature by the Purchaser, including a power of attorney authorising him to register the mortgage bond on behalf of the purchaser.

Once all relevant documents have been signed, and the Conveyancer has received payment of the costs, the Conveyancer pays the Receiver of Revenue and the local authority so as to obtain the Transfer Duty Receipt or exemption and the Rates Clearance Certificate.

Provided the purchase price has been paid or satisfactorily secured, the Conveyancer prepares the new title deed and lodges the documents prepared by him at the Deeds Office for registration. When there is a bond to be cancelled and a bond to be registered, the respective conveyancers in liaison with one another, lodge the bond cancellation and bond documents simultaneously with the transfer documents.

These documents are then scrutinised by the examiners at the Deeds Office to ensure compliance with all the applicable legislation and regulations.

Once their examination is successfully completed, the documents are placed in the respective conveyancers' Deeds Boxes at the Deeds Office. The property is then registered into the name of the Purchaser simultaneously with cancellation of the existing bond and registration of any new bond.

Thereafter the title deed is captured by the Deeds Office on micro-film and then released to the Conveyancer who will deliver it to the Purchaser unless a bond has been registered, in which event the title deed is forwarded to the bondholder.

The registration procedure normally takes 6 - 12 weeks depending on the particular circumstances of each case and the number of parties involved. If the title deed is immediately available and all parties are readily available to sign documentation, registration could be done within four to five weeks particularly if no bond s are to be cancelled or registered.

Sometimes the transaction may be linked to others such as the sale of the purchaser's property from which sale funds will be available to pay for the current purchase. There can indeed be several such chains thereby multiplying the number of parties and conveyancers involved. Unfortunately, the larger the chain, the longer the entire process is likely to take

Consequently it is important that all Purchasers and Sellers sign documents and pay the amounts requested as soon as called upon to do so by the Conveyancer. In this way delays can be kept to a minimum.