The bond registration process

Transferring fixed property from one owner to another is a complicated process that involves many different parties apart from the buyer and seller. These include conveyancing attorneys, mortgage originators, bank officials and deeds office staff.

It is a lengthy process, with many steps and countless documents that need to be signed. This makes it difficult for most consumers to understand – particularly first-time buyers and sellers.

WATCH : Understanding the bond registration process.

Steps

The process starts with the Offer to Purchase (OTP) document, which signifies the buyers’ intention to buy the sellers’ property. The OTP stipulates the terms and conditions for the sale and purchase of the property and becomes legally binding once the sellers’ sign acceptance of the offer.

The sellers will nominate a conveyancing attorney to carry out the transfer process on their behalf.

The OTP will stipulate the manner of payment of the purchase price – either in through bank finance or in cash, or a combination of the two. If bank finance is required, the buyer will apply for a loan.

Once the loan application has been approved, the bank will appoint a bond registration attorney to register a mortgage bond over the property as security for the bank.

The transferring attorney will liaise with the bond registration attorney to request guarantees for the purchase price and to arrange the simultaneous registration of the transfer and the mortgage bond.

Documents

Various documents are required during the transfer process depending on the nature of the transaction. These include:

• Bond cancellation figures for the existing bond over the sellers’ property.
• Rates clearance figures received from the local municipality.
• Levy clearance figures from a homeowner’s association or body corporate if the property is in a complex.
• Transfer duty receipt or exemption certificate from SA Revenue Services (SARS).

The transferring attorney will prepare all transfer documents to be signed by the sellers and the buyers.

All parties will also sign various FICA affidavits confirming their particulars and a SARS transfer duty declaration outlining the nature of the transaction and indicating whether any transfer duty is payable.

The sellers will also sign a Power of Attorney to authorise the attorney to pass the transfer. This document will be lodged in the deeds office, authorising a conveyancer to appear before the Registrar of Deeds and pass the transfer of the property to the buyers on behalf of the sellers.

Transfer costs

During the transfer process, the buyers will pay the transfer costs to the transferring attorney. This will include the transfer duty payable to SARS, if applicable. The transferring attorney will also pay the transfer duty to SARS and obtain a receipt.

If the transaction is exempt from transfer duty, the transferring attorney will obtain a transfer duty exemption certificate.

The sellers will be liable to pay the municipal and levy clearance figures to get the necessary clearance certificates.

The sellers are also responsible for arranging the issuing of compliance certificates, such as electrical and gas compliance certificates and electrical fence certificates, if applicable.

Deeds office

Once all documents are in order, the transfer documents will then be submitted to the deeds office for registration.

If there are several attorneys attending to different aspects of the transaction, their documents will need to be linked and simultaneously lodged with the transferring attorney’s documents. These include the consent to cancel the sellers’ existing mortgage bond over the property and the buyers’ new mortgage bond.

Timeframes

The registration process in the deeds office normally takes eight to ten working days from the date of lodging documents. However, the time from signing the offer to purchase to transfer usually takes between six to twelve weeks because of all the documents that need to be signed and certificates that need to be obtained.

Once registration has been completed, a new title deed will be issued by the deeds office confirming that the buyers are the registered owners of the property. If the buyers have a mortgage loan from a bank, the title deed will be held at the bank.

On registration, the transferring attorney will finalise the statements of account and pay over the proceeds of the sale to the sellers.

The buyers are then the new owners of the property.

Writer : Sarah-Jane Meyer