Who is responsible for what in the Conveyancing process?

Seller:

• Existing bond settlement figures
• Estate Agent Commission
• Rates clearance figures from Council (4 months in advance) + Certificate admin fee
• Levy / Home Owners Association – clearance figures (4 months in advance) + Certificate admin fee
• Other non conveyancing fees, system billing fees and postages and petties
• Electrical Certificate, Electric Fence Certificate and Gas Certificate
• Bond cancellation fees

Purchaser:

• Transfer fees
• Deeds Office Fees
• Transfer duty – SARS
• Levy / Home Owners Association – deposit
• Other non conveyancing fees, system billing fees and postages and petties
• Bond registration fees

Subject to conditions in signed Offer to Purchase.

What are Title Deeds ?

What is a Title Deed?

In terms of the Deeds Registries Act 47 of 1937, a Title Deed is a documentary proof of ownership. It is an important document containing essential information about a particular property.

This essential information includes:

  • Previous owner as well as existing owners’ particulars
  • Property description, including the extent of the property
  • All prohibitory an favorable conditions applicable to the property
  • Purchase price of the property.

 

When is your Title Deed required?

The original Title Deed is required when transferring a property from one party to another. The Sellers existing Deed will be cancelled and the new Title Deed in the name of the Purchasers will be drafted by the Conveyancer and replace the cancelled Title Deed.

 

The original Title Deed is also required when registering a bond over your property. The Title Deed will be sent to the Deeds Office with a newly drafted mortgage bond. The Deeds Office will then endorse the original Title Deed with a stamp containing the information of the new mortgage bond simultaneously with the registration of the bond.

 

Where is your Title Deed?

The owner on an immovable property will only receive the original Title Deed if they have either paid for the property in cash or paid the bond in full. If the owner registered a bond over the property, the original Title Deed will be sent to the bank, who then keeps the Title Deed in their custody until the bond is paid off in full.

 

What happens if you’ve lost your Title Deed?

An application for a certified copy of the Title Deed will be facilitated by the attorneys attending to the new transfer or bond, simultaneously with the transaction, by means of Regulation 68(1). The costs therein will be borne by the party who lost the Title Deed. This application and affidavit must be signed by the owner of the property and must state that the Title Deed has been lost for reasons unknown, and despite a thorough search, the Title Deed cannot be found. It must also state whether or not the Title Deed has been pledged or detained by anyone as security for debt.

This certified copy or in other words “VA Title Deed” will then replace the original Title Deed and is recorded at the Deeds Office. Should the lost Title Deed be found, the owner must place it in the possession of the Registrar of Deeds, where the Title Deed was registered.

What documents are required on Receipt of an Offer to Purchase for a Property?

 

SELLERPURCHASER

·        Contact details

 

·        Contact details

·        Clear copy of your green barcoded ID book / ID card (both sides)

 

·        Clear copy of your green barcoded ID book / ID card (both sides)

·        Proof of residence

(No older than 3 months)

 

·        Proof of residence

(No older than 3 months)

·        Confirmation of marital status

(Marriage certificate, if applicable)

(Antenuptial contract, if applicable)

Divorce order & settlement agreement, if applicable)

 

·        Confirmation of marital status

(Marriage certificate, if applicable)

(Antenuptial contract, if applicable)

Divorce order & settlement agreement, if applicable)

·        Income tax numbers

(Proof of SARS registration reflecting income tax numbers (eg IRP5 / IT3))

 

·        Income tax numbers

(Proof of SARS registration reflecting income tax numbers (eg IRP5 / IT3))

·        Ekurhuleni utility bill

 

 
·        Copy of Title Deed / Original Title Deed if there is no bond on the property 
What is a Rates Clearance Certificate?

A rates clearance certificate is a document issued by the City Council in terms of Section 118 of the Municipal Ordinance. These amounts are due and payable prior to registration of the transfer.

Why is a rates clearance certificate necessary?
In terms of the Deeds Registries Act 47 of 1937 the Registrar of the Deeds Office cannot allow the transfer of a property from the Seller to the Purchaser to be registered unless the Conveyancer presents a valid Rates Clearance Certificate which has not expired, when lodging the documents in the Deeds Office. This ensures that all outstanding rates are paid on the property. In terms of the latest Constitutional Court case, the City Council cannot transfer old outstanding debt of the Seller to the Purchaser’s account.

How are the rates clearance figures calculated?
For the purpose of issuing the Rates Clearance Certificate, the City Council is in terms of Section 118 above, entitled to claim rates and taxes, electricity, water, sewerage and refuse for a period not more than two years prior to sale of the property up to and including 120 days in advance. Should the Seller owe monies to the City Council beyond the two-year period prior to sale, the City Council is entitled to recover these amounts separately from the Seller.

Who pays the rates clearance figures?
It is the Seller`s responsibility to pay all amounts required to obtain the Rates Clearance Certificate. The Seller must pay the conveyancer who will pay the City Council. The Purchaser only becomes liable for payment of rates and taxes to the City Council from date of registration of transfer, unless the Agreement of Sale states otherwise.

When does the Seller get a refund from the City Council and how?
The Conveyancer applies to the City Council for the rates refund. Once the transfer is registered the Purchaser is required to immediately open his own municipal account. No credit left on the Seller’s municipal account will be refunded by the City Council to the Conveyancer unless the Purchaser has opened his own municipal account. The City Council takes approximately 3 to 4 months to reconcile their accounts and pay the refund. This payment is in the form of a cheque in favour of the Conveyancers Trust account. Once the cheque is cleared by the bank, payment is made to the Seller.

What is Transfer Duty?

Transfer Duty is a tax levied on the value of any property acquired by any person by way of a sales transaction or in any other way.

Who pays Transfer duty?
The person acquiring the property.

When should it be paid?
Duty is payable within 6 months from the date of acquisition. If the Transfer Duty is not paid within this period, interest calculated at 10% per annum on the transfer duty amount levied by SARS for each completed month. A completed month is calculated as the first day from the expiry of the interest free 6-month period to the date of payment.

How should it be paid?
The transfer duty amount together with the transfer costs will reflect in the statement of account handed to the Purchaser by the Conveyancer. Once the transfer costs are paid to the Conveyancer, the amount due to SARS must be paid electronically via eFiling by the Conveyancer attending to the transfer.

How is it calculated?
The transfer duty is based on the highest of: the purchase price, the declared value, the fair market value. These are the Transfer Duty rates applied to properties acquired on or after 1 MARCH 2020, and apply to all persons (including Companies, Close Corporations and Trusts):

Value of the property (R) Rate

​1 – 1000 000​​0%
1 000 001 – 1 375 000​3% of the value above R1 000 000
1 375 001 – 1 925 000​R11 250 + 6% of the value above R 1 375 000
1 925 001 – 2 475 000​R44 250 + 8% of the value above R 1 925 000
2 475 001 – 11 000 000​R88 250 +11% of the value above R2 475 000
​11 000 001 and above​R1 026 000 + 13% of the value exceeding R11 000 000

 

Gas Certificates Explained

WHEN IS A GAS CERTIFICATE REQUIRED?

Rising electricity costs, as well as an increase in the popularity among South-African homeowners to utilise gas installations in their homes led to gas regulations being introduced in 2009. According to the Pressure Equipment Regulations that have been promulgated under the Occupation Health and Safety Act (No 85 of 1993), all gas installations must have a Certi­ficate of Conformity.

WHO NEEDS TO COMPLY?

Any home or business that has liquid gas installations installed must have a Gas Certi­ficate of conformity issued by an authorised person who is registered with the Liquefi­ed Petroleum Gas Safety Association of Southern Africa (LPGAS).

WHEN DO YOU NEED AN GAS COMPLIANCE CERTIFICATE?

Home or building owners that wish to sell their home or property and have gas appliances installed.

The following is important to note:

  • Any gas installations that includes gas fires or braais, gas stoves and ovens, as well as hot water systems require a gas certificate.
  • A gas certificate must be obtained, and a copy needs to be delivered to the new purchaser.
  • Gas inspections are also vital to ensure that insurance policies remain valid, as well as to check for safe installation.
  • Incorrect installation of gas equipment can result in a gas leaks. This could have major health implications for inhabitants, but also increase the risk possible explosions.

 WHAT IS THE COST OF OBTAINING A GAS COMPLIANCE CERTIFICATE?

There are a number of costs involved in obtaining a Gas Compliance Certificate. The exact costs will differ between service providers. These costs will include:

  • The gas inspection fee
  • Costs related to remedial work, if necessary
  • Issuing of a new gas certi­ficate

WHAT IS CHECKED DURING INSPECTION?

There are a few key inspection points during a gas inspection:

  • Gas leaks – The gas installation is free of any leaks.
  • Gas equipment – The equipment used is SABS approved.
  • Valves – Correct valves are used.
  • Position – Gas equipment is not placed in illegal positions.

GAS EQUIPMENT CHECKLIST:

  • Windows – Gas bottles must be at least 1 metre from any window.
  • Gully – Gas bottles must be at least 2 metres from any gully.
  • Tap – If a tap does not have a gully under it, the gas bottle can be right next to the tap.
  • Power point – Gas bottles must be at least 5 metres from a power point.
  • Size of gas bottles outside – 2x 19kg max (from 1 November ’14 2x 48kg will be allowed).
  • Size of gas bottle inside – 9 kg max, and if in a cupboard, it must have adequate ventilation.
  • Gas bottle next to braai or fire place is allowed (if installed correctly).
  • No gas bottles permitted in a garage.
  • No switch socket outlets allowed under or directly above a gas hop or in the same compartment.
  • Gas bottle must be more than 1 metre  sideways from doors and windows.
  • Gas bottle may not be less than 2 metres from drains and air vents.
  • Gas bottle may not be less than 3 metres below windows (unless a non-combustible roof is installed).
  • Gas bottle must be more than 1 metre from the property boundary wall (unless it is a fire wall).
  • Light bulbs cannot be less than 1.5 metres above a gas bottle.
  • Only class 1 or 2 copper pipes, or other approved gas piping (note: This is not the same copper piping as used by plumbers).
  • Copper pipes going through a wall must be sleeved.
  • Approved flexible gas hoses may not be more than 2 meters long and may not go through any partition (including wood, dry wall, cupboard wall etc).

WHAT DOES A GAS CERTIFICATE EXCLUDE?

  • Servicing, upgrading or restoring an existing gas installation. Similar to a roadworthy test versus servicing or restoring a car, a gas inspection is exactly that, a compliance inspection.
  • Portable or temporary gas appliances, such as portable BBQ’s, patio heaters and internal heaters. These items are normally not included in the sale of the property and will be removed from the premises by the seller.
  • Replacing of gas cylinders that look old.
  • Refill of gas bottles.
  • Relocation of gas bottles for aesthetical reasons.
  • Actual gas appliances, e.g. stoves, heaters, braais, hops, geysers etc. Inspections are limited to the gas installation only.

WHAT ARE THE LEGAL REQUIREMENTS?

  • Pressure Equipment Regulations were also promulgated under the Occupational Health and Safety Act (effective October 2009), which brought gas appliances installed in properties more or less in line with electrical installations.
  • Gas appliances installed in properties need a Gas Compliance Certificate.
  • Gas installations for which certificates are required include built-in gas _res or braais, gas stoves, hot water systems and the like.
  • From 1st October 2009, it is required that any person installing a liquid gas appliance at a property must have a Certificate of Conformity issued in respect thereof.
  • The certificate may only be issued by an authorised person registered as such with the LPGAS, after he has inspected the installation and is satisfied that it is safe and leak free.
  • Furthermore, in terms of Regulation 17(3) of the Pressure Equipment Regulations, the law speaks of a certificate being required after any installation, alteration, modification or change of ownership of property which necessarily implies that a certificate would need to be in place or issued upon the transfer of a property.
  • The parties cannot contract out of it – it is required in respect of all properties where there is a gas installation, whether the owner lives there, rents out the property or whether it is vacant or stands empty for most of the year.

HOW LONG IS THIS CERTIFICATE VALID FOR?

There is no regulation regarding the length of the period of validity of a Gas Compliance Certificate. A certificate is required on the sale of the property regardless of how old the existing one may be. Regulation 17(3) of the Pressure Equipment Regulations promulgated in terms of the Occupational Health and Safety Act 85 of 1993 became effective on 1 October 2009 and makes it compulsory for a Gas Compliance Certificate to be obtained in the event that a property is sold.

WHAT IS THE PROCEDURE FOR OBTAINING A GAS CERTIFICATE?

The procedure for obtaining a gas certificate is as follows:

  • If you (or the seller) have gas appliances installed in your home or property, you will require a gas certificate when you want to sell your property.
  • You, the estate agent, or transferring attorney can request for a gas inspection by any service provider registered with the LPGAS.
  • The inspector will quote the seller on the relevant inspection fee.
  • The inspection will be booked on acceptance of the inspection quote.
  • The gas certificate will be issued in the case of 100% compliance – normally included in the inspection fee.
  • In the case that remedial work is required to make the gas installation compliant, the inspector will issue a detailed report with a costing to perform the remedial work.
  • Rectifications are done in order to issue a new Gas Compliance Certificate.
  • Have your gas installations checked by a registered gas installer on an annual basis.

GENERAL LPG GAS SAFETY TIPS:

  • Always use a registered gas installer.
  • Always use a qualified gas dealer.
  • Always use a verified and tested gas product.
  • Always check the seal on a gas cylinder matches the brand of the cylinder.
  • Always check gas appliances before use.

 

Electrical Certificates Explained

WHEN IS AN ELECTRICITY CERTIFICATE REQUIRED?

An electricity certificate is a document that verifies that the electrical installations in a home comply with the legislated requirements detailed in the Occupational Health and Safety Act. This certificate is required when an electrical installation is intended for use or lease by a user or lessor.

WHO NEEDS TO COMPLY?

The owner of an “electrical installation” should be in possession of a valid electrical certificate at all times. Just like gas and water, electricity current has the ability to leak, and when touched, it has the ability to flow through you. The earth leakage relay is designed to monitor for leakage current going directly or indirectly to earth and when a certain value is exceeded, it will trip and disconnect the current flow.

WHEN/WHY DO YOU NEED AN ELECTRICAL COMPLIANCE CERTIFICATE?

Compliance is necessary as a legal requirement. Each time a property is sold, it is contractually required that a new Electrical Compliance Certificate be issued. Because electricity is potentially dangerous, a faulty or a non-compliant installation has the ability to cause damage to property or harm to people through fire or electrocution.

For a long time, it seemed that an electrical certificate was valid forever as long as the electrical installation was not amended or worked on in any way. Shortcomings of this assumption are to be noted:

  • The wear and tear of electrical equipment makes it impossible for an Electrical Compliance Certificate to be valid forever.
  • The new owner cannot be expected to take the sellers word for whether the electrical installation had been amended or not.

WHAT IS THE COST OF OBTAINING AN ELECTRICAL COMPLIANCE CERTIFICATE?

There is a fee involved and this is dependent on the inspector.

  • Consultation fee
  • Issuing of the certificate is at no additional charge
  • In the case of failure to comply, additional fees are applicable

WHAT IS CHECKED DURING INSPECTION?

A registered inspector will require access to every part of the electrical installation on the premises, including:

  • The main distribution board
  • Every plug
  • Every light switch
  • Every light fitting, etc.

This inspection must also be conducted in the garage, out buildings and even roof spaces etc. All appliances will be unplugged so that all readings can be taken. The power will also be switched off periodically. Inspectors then plug in all appliances upon completion. Should the electrical installation be 100% compliant, a new certificate will be issued.

ELECTRICITY INSPECTION CHECKLIST:

  • Main boards: Correct connections, correct cable sizes, correct circuit breakers and labelling, earth leakage operation. All items are checked to see that they are secure and covered properly.
  • Plugs and switches: These are checked that they work correctly, have no worn contacts, are wired correctly, and secure. If they are metal, they are checked to see if they are earthed correctly.
  • Fixed appliances: These must be connected to the installation by approved means according to the current it draws. Lights with exposed metal must be earthed correctly.
  • Positioning of electrical points: Proximity of switches and lights to the shower, bath, pools, etc.
  • Wiring: Correct type and rating must be used for the correct type.
  • Insulation: A test is taken.
  • Temporary installations: They must be installed in a manner that would imply they are permanent
  • Installed devices: These must be rated correctly, installed correctly, and of approved types.

WHAT DOES AN ELECTRICAL CERTIFICATE EXLUDE?

  • Servicing or upgrading of the electrical installation. Much like a roadworthy test on a car, all that is checked is that what exists is safe.
  • Checking of actual appliances. This includes items such as ovens, hobs, aircon units, swimming pool pumps, bore hole pumps, pool lights, garage and gate motors, alarms, wall heaters and any other fixed appliances. Their connection is what gets checked.
  • Temporary installations, defined as something that can simply be unplugged and removed by hand that was clearly intended for temporary use only. An example of this is a camping light.
  • Work that is not required. The seller cannot be compelled to do something that is not required.

WHAT ARE THE LEGAL REQUIREMENTS?

These requirements are to meet the Electrical Installation Regulations. They are as follows:

  • Every lessor or user must have a certificate for the electrical installation they use.
  • The certificate shall be in the format of Annexure 1. Accompanied with it must be a test report approved by the chief inspector.
  • Only a registered inspector may issue a certificate.
  • The inspector may refuse to issue the certificate if they find a fault until the fault is rectified.
  • Any person who does electrical installation work shall ensure that a valid certificate is issued for that work.
  • No person shall connect any completed or partially completed electrical installation to the electricity supply unless it has been inspected and tested and a certificate of compliance for that electrical installation has been issued.
  • If additions or alterations have been done to the electrical installation, the responsible person must obtain a compliance certificate for at least the addition or alteration.
  • A change of ownership may not take place if a certificate is older than two years.
  • All insurance companies require a certificate of compliance.

HOW LONG IS THIS CERTIFICATE VALID FOR?

An electrical certificate can only be valid for an absolute maximum of two years, subject to no alterations or work being done during that period. Sometimes an affidavit needs to be signed to this effect. 

WHAT IS THE PROCEDURE FOR OBTAINING AN ELECTRICAL COMPLIANCE CERTIFICATE?

The seller, estate agent, or transferring attorney can make the request for an Electrical Compliance Certificate, even before selling. The requested inspector then explains the fees and payment options before obtaining permission to proceed with inspection. Once the electrical inspection and testing has been completed, a certificate of compliance is issued. If an issue arises, the registered inspector shall refuse to issue such certificate until that fault or defect has been rectified.

WHAT IS THE PROCEDURE FOR OBTAINING AN ELECTRICAL COMPLIANCE CERTIFICATE?

The seller, estate agent, or transferring attorney can make the request for an Electrical Compliance Certificate, even before selling. The requested inspector then explains the fees and payment options before obtaining permission to proceed with inspection. Once the electrical inspection and testing has been completed, a certificate of compliance is issued. If an issue arises, the registered inspector shall refuse to issue such certificate until that fault or defect has been rectified.

WHY DO YOU SOMETIMES EXPERIENCE TRIPPING PROBLEMS AFTER A CERTIFICATE HAS BEEN ISSUED?

  • Following inspection, what should be earthed is earthed and the earth leakage relay is operational and trips accordingly.
  • This is not actually a problem and your electrical installation doing exactly what it is designed to do to protect you from a potentially dangerous situation.
  • It could be a faulty appliance or circuit.
  • A new owner could be using an old appliance, which requires them to upgrade the installation.
Capital Gains Explained

Capital Gains Tax was introduced on 1 October 2001. It is payable on the profit a seller makes when disposing of his property.

WHAT IS MEANT BY CAPITAL GAINS?

A person’s capital gain on an asset disposed of is the amount by which the proceeds exceed the base cost of that asset.

WHAT IS BASE COST?

The base cost of an asset is what you paid for it, plus the expenditure. The following can be included in calculating the base cost:

The cost of acquiring the property, including the purchase price, transfer costs, transfer duty and professional fees e.g. attorney’s fees and fees paid to a surveyor or auctioneer.

The cost of improvements, alterations and renovations which can be proved by invoices and/or receipts.

The cost of disposing of the property e.g. advertising costs, costs of obtaining a valuation for capital gains purposed, and estate agents’ commission.

HOW WAS THE BASE COST OF ASSETS HELD CALCULATED BEFORE 1 OCTOBER 2001?

If the property was acquired before 1 October 2001 you may use one of the following methods to value the property:

  • 20% x (proceeds less expenditure incurred on or after 1 October 2001).
  • The market value of the asset as at 1 October 2001, which valuation must have been obtained before 30September 2001.
  • Time-apportionment base cost method – Original cost + (proceed – original cost) x number of years held before 1 October 2001 ÷ the number of years held before 1 October 2001 + number of years held after 1 October 2001).

Example of time-apportionment:

Mr X, an individual, acquired a holiday home for R450 000 on 1 August 1996, that is, six years before the valuation date of 1 October 2001. Mr X sold the property on 30 June 2021, that is, eleven years after the valuation date for R800 000.

Base cost = R450 000 + [(R800 000 – R450 000) x 6÷17] = R573 529

Proceeds R800 000

Less: Base cost (as calculated above) (R573 529)

Capital Gain = R226 471

HOW IS CAPITAL GAINS TAX PAID?

Capital Gains tax is not a separate tax from income tax. Part of a person’s capital gain is included in his taxable income. It is then subject to normal tax. A portion of the total of the taxpayer’s capital gain less capital loss for the year is included in the taxpayer’s taxable income and taxed in terms of normal tax tables.

HOW IS CAPITAL GAIN CALCULATED?

If you are an individual, the first R40 000 of your total capital gain will be disregarded. Then 40% of the capital gain made on disposal of the property must be in the taxable income for the year of assessment in which the property is sold. When the property owned by a company, a close corporation or an ordinary trust, 80% of the capital gain must be included in their taxable income.

PRIMARY RESIDENCE & CAPITAL GAINS TAX

As from 1 March 2012 the first R2million of any capital gain on the sale of a primary residence is exempted from capital gains tax. This exemption only applies where the property is registered in the name of an individual or in the name of a special trust. The property should furthermore not exceed 2 hectares. If the property is partially for residential & partially for business purposes, an apportionment must be done. If more than one person holds an interest in a primary residence, the exclusion will be in proportion to the interest held by each party. For example, if you & your spouse have an equal interest in the primary residence, you will each qualify for a primary residence exclusion of R1million. You will also be entitled to the annual exclusion, currently R40 000.

WHAT IS A PRIMARY RESIDENCE?

A residence must meet certain basic requirements before it can qualify as a primary residence.

  • It must be a structure, including a boat, caravan or mobile home, which is used as a place of residence by an individual.
  • An individual or special trust must own an interest in the residence.
  • The individual with an interest in the residence, beneficiary of the trust, or spouse of that person or beneficiary must ordinarily reside in the home and use it mainly for domestic purposes as his or her ordinary residence.

WHAT IS A SPECIAL TRUST?

A special trust is a trust created either:

  • For the sole benefit of one or more people related to each other and who suffer from a disability as defined in Section 6B(1) of the Income Tax Act (effective from 1 March 2014). The disability must prevent them from earning enough income for their maintenance or from managing their own financial affairs, and must now be lasting and diagnosed as well; or
  • In the will of a deceased person solely for the deceased’s relatives alive or conceived on date of death, of whom the youngest is under 18 years on the last day of the year of assessment of the trust for tax purposes.

 

Transfers and Bonds

1. THE TRANSFER AND BOND PROCESS

Instructing the Attorney

Once the Transferring Attorney has received a copy of the signed sales agreement from us, they will do the following:

  • Write to the bank which holds a mortgage bond over the Seller’s property to obtain the original title deed and the bank’s cancellation figures (the amount required to clear the Seller’s bond).
  • Write to both the Seller and the Buyer advising them that they are handling the transfer. They will request copies of your ID’s and Marriage certificate, as well as Proof of Residence (for FICA), and to enable them to prepare the transfer documents for signature.
  • Do a deed search to ensure the correct property description.

Signing of Transfer and Bond Documents

There could be potentially 3 firms of attorneys involved – The Transfer, Bond Cancellation and The Bond Attorneys. It could happen that one firm of attorneys is instructed to attend to the Transfer, Bond Cancellation and Bond.

Once the Transferring Attorney has all the documents required, they will prepare the documents for signature. If you are the buyer and you have to sign your bond documents at the office of another attorney appointed by your bank, you will be required to sign the actual bond documents, an acceptance form, authorities to issue guarantees, and any other papers the bank requires.

 

 2. GUARANTEES AND CERTIFICATES

 Once both parties have signed all transfer and bond documents and transfer costs have been paid, the Transferring Attorney will attend to the final requirements prior to lodgment (handing in) of the documents in the deeds office. Three very important documents need to be obtained before they can proceed:

Bond Guarantee

Guarantee must be filed with the attorney appointed to cancel the existing bond/s over the property. The guarantee will be obtained from the bond attorney. This will cover the capital amount required by the bank as well as interest due till date of registration of transfer. Most banks over quote the capital amount (to protect themselves against any shortfall) and the payment of accrued interest usually results in the bank being overpaid on registration. If you are the Seller, do not be alarmed if the conveyancer’s final account appears to quote an excessive amount paid to your bank – it is a standard procedure and your bank will refund you any overpayment within a week after registration.

Transfer Duty Receipt

Transfer duty is payable on most property sales. The Transferring Attorney is required to pay this in advance and file the transfer duty receipt with the other documents they lodge (hand in) in the Deeds Office.

Rates Clearance Certificate

The local council’s clearance certificate also has to be lodged. Once again, as the council will require prepayment, it may be overpaid by the time registration takes place. A refund will again be made shortly after registration. In a case of Sectional Title sales, a levy clearance certificate also needs to be obtained from the body corporate.

 

 3. LODGMENT AND REGISTRATION

The final stage in any transfer is the process of lodgment (handing in at the Deeds Office) and registration. A fairly standard procedure is followed:

Registration of Transfer

Between 8 and 10 working days later the lodgment will come up for inspection and correction of possible minor errors. This process is known as being “on prep”. As soon as the files are totally correct they will be put forward for registration the next day. The conveyancer will then sign the new deed which transfers ownership of the property to the Buyer.

Final Accounts

Provided there are no complications or delays the whole transfer process should take approximately six to eight weeks. On the day following registration the Transferring Attorney will send accounts to both parties. The Seller’s account will reflect the purchase price less deductions for agent’s commission, cancellation fees, the amount paid to cancel existing bonds, rates and taxes paid and any other necessary disbursements. The Buyer’s account will also show the purchase price, how it was made up, all costs paid, all transfer and bond costs deducted, as well as any other relevant credits or debits. The new title deed will be forwarded to the Buyer’s bank, as they will keep it as security.

 

 4. TRANSFER AND BOND COSTS

 A Buyer has to pay the following costs to effect registration of his transfer and bond:

Transfer Costs

  • Transfer Duty
  • Transfer Fee (The conveyancer’s fee)
  • Sundries (Deeds Office Fee)
  • Provisions for Rates and Taxes (Town Council)

 Bond Costs

  • Bond Fee (The conveyancer’s fee)
  • Sundries (Deeds Office Fees)
  • Initiation and Valuation Fee