The offer to purchase is signed, what now?

The agent presented the seller with the offer to purchase and the seller signed on the

dotted line, what now? When and how does ownership pass from seller to purchaser?

The South African property registration system is one of the safest and best in the world

and requires that transfer of ownership of immovable property be registered at the

Deeds Office. The Deeds Office is a government institution that records ownership of

property and other rights related to property. A conveyancer (a qualified attorney that

passed a conveyancing exam) will be appointed by the seller to transfer the property to

the Purchaser. Transfer of ownership will only takes place once the deeds are registered

at the Deeds Office. Should the purchaser have obtained a loan from a financial

institution a bond will simultaneously be registered.

The property transfer process can seem complicated to first time property buyers.

Below is guideline of the processes to be followed in order to complete a successful transfer of a property.

1 Receipt of Deed of Sale

Upon receipt of the deed of sale the transferring attorney will do a Deeds office search

and apply for a copy of the original Title Deed. If the sale is subject to the purchaser

obtaining a home loan, application will be made on behalf of the purchaser for a loan

that will be secured by way of a mortgage bond.

2 Fulfillment of suspensive conditions

The transfer can only proceed if all suspensive conditions in the agreement of sale are

fulfilled. Examples of suspensive conditions are the approval of a loan in favour of the

purchaser or the sale of the purchaser’s property.

3 Appointment of Seller’s Bond Cancellation and Purchaser’s Bond attorneys

If a bond is registered over the seller’s property the financial institution will appoint the

attorney to cancel the seller’s existing bond. If a loan is approved on behalf of the

purchaser a conveyancer will be appointed to register the bond.

4 Application of rates figures and levy figures

The transferring attorney applies to the municipality for rates figures and a valuation

certificate.

In the case of a sectional title property, application is made for levy figures from the Body Corporate and necessary consent from the Home Owners Association.

5 Signature of documents

The transferring attorney will prepare the transfer documents to be signed by the seller

and the purchaser. Both parties will sign various FICA affidavits confirming their personal particulars and a SARS transfer duty declaration outlining the nature of the transaction and indicating whether any transfer duty is payable. The seller will also sign a Power of Attorney to pass transfer. If the Purchaser obtained a loan from a financial institution bond documents are signed with the bond attorney.

6 Payment of cost

The purchaser is liable for payment of transfer cost and/or bond registration cost.

The seller is liable for payment of rates figures to the municipality and in the case of a

sectional title property levies to the body corporate.

On receipt of payment from the purchaser of transfer duty the transferring attorney pays the transfer duty to the receiver of revenue and applies for the transfer duty receipt.

The municipality is paid on behalf of the seller and application is made for the rates

clearance certificate, and if applicable, levy clearance certificate.

7 Balance of purchase price of guarantees

The purchase price must be secured either by payment into the transferring attorneys

trust account or by means of a guarantee prior to lodgement at the Deeds Office.

8 Compliance Certificates

The Seller should furnish the transferring attorney with the electrical compliance

certificate. Depending on the circumstances plumbing, beetle, gas and electric fence

certificates must also be produced to the purchaser.

9 Lodgement of Deeds at Deeds Office

Once the transferring attorney receives the transfer duty receipt/or exemption certificate; rates and/or levy clearance certificates (as applicable) and original Title Deed the deeds can be lodged. The transferring attorney will arrange for simultaneous lodgement at the Deeds Office with bond cancellation and bond attorneys if applicable.

10 Registration at the Deeds office

The deeds are examined in the deeds office and if the examiners are satisfied that all

requirements are met the transfer is registered and transfer passes from the seller to the purchaser.

The registration of purchaser’s new bond (if applicable) and cancellation of seller’s

existing bond (if applicable) take place simultaneously. Final accounts are sent to the

seller and the purchaser. The balance of the proceeds are paid to the seller.

From the above it is evident that there are normally three attorneys involved in the

transfer process, being the transferring attorney, bond cancellation attorney and bond

registration attorney. While it may seem to be a complex process these attorneys will be

able to provide guidance to buyers and sellers. Cooperating with the attorneys and

having all the necessary documentation and costs at hand when requested will ensure

that everything progresses without incident.