THE CONVEYANCING PROCESS STEP BY STEP
The conveyancing process may seem very daunting and complicated for a first-time homebuyer. I will try to simplify the process below for you in order for you to understand exactly what is happening at each step of the transfer process.
STEP 1 – RECEIVE THE SALE AGREEMENT
The seller and purchaser sign the sale agreement which contains all the conditions of the sale of the erf or sectional title property, which the estate agent (if there is an estate agent involved) or the private seller will sent to the transferring attorney which is usually appointed by the seller.
STEP 2 – COLLECTING INFORMATION
The transferring attorney will send out formal acknowledgement of the sale agreement to all the parties involved and then request all the necessary FICA documentation of the seller and the purchaser; the payment of the deposit as contained in the sale agreement or state the date by which
the purchaser must provide proof that a bond has been granted to him as contained in the sale agreement; the title deed or in the case where there is currently a bond over the property the bond account number in order to request bond cancellation figures from the current bondholder which is
required to cancel the current bond; and rates clearance figures from the particular municipality in which area the particular property is situated in order to obtain an rates clearance certificate and levy clearance figures from the managing agent in case of sectional title property in order to obtain an levy clearance certificate.
STEP 3 – FINANCIAL ARRANGEMENTS
The purchaser must pay the deposit into the transferring attorneys trust account which will be invested on behalf of the purchaser and the interest on the account will be for his account. If the sale agreement is subject to the purchaser obtaining a bond the purchaser must provide the transferring
attorney with proof that a bond has been granted to him by an acceptable banking institution in South Africa and the amount for which the bond has been approved for. The bond registration attorneys will attend to the registration of the bond on behalf of the bondholder and will supply the transferring attorneys with the amounts available for guarantees and request guarantee requirements to cancel the existing bond over the property. The bond cancellation attorneys are appointed by the existing
bondholder to cancel the bond. The bond cancellation attorneys will send a copy of the title deed as received from the bondholder and the bond cancellation figures together with their bond cancellation costs to the transferring attorneys. The transferring attorneys will send the bond cancellation figures to the bond attorneys in order to issue the necessary guarantees to the cancel the existing bond over the property.
STEP 4 – DRAFTING OF THE DOCUMENTS
The transfer documents and bond documents are drafted and appointments are made with the Seller and/or the Purchaser respectively to the sign the necessary documents and pro forma statement of account for the transfer fees and bond registration fees are given to the purchaser which must be
paid as soon as possible.
STEP 5 – GETTING ALL THE SUPPORTING DOCUMENTS READY FOR LODGEMENT
As soon as the pro forma transfer costs is paid by the purchaser and all the transfer documents has been signed by the seller and the purchaser, the transferring attorneys will pay the rates clearance and levy clearance figures and apply for the transfer duty receipt from the South African Revenue Service. All compliance certificates must be supplied by the agent or seller to the transferring attorneys and the purchaser must pay the remaining balance of the purchase price, if it is not covered by the guarantees of the bond registration attorneys.
STEP 6 – GUARANTEES
The bond registration attorneys will provide the transferring attorneys with the original guarantees which will cover the purchaser price and the transferring attorneys will send it to the bond cancellation attorneys to cover the bond cancellation figures and will either pay the bond cancellation costs or provide them with an undertaking to pay their bond cancellation costs on date of registration. It is important that at this stage all the conditions of sale have been complied with.
STEP 7 – LODGEMENT
When the transferring attorneys, bond cancellation attorneys and the bond registration attorneys are ready to proceed with the transaction they will arrange with each other for simultaneous lodgement of all the deeds at the Deeds Office in which area the property is situated. The transfer, bond
cancellation and bond registration deeds are then lodged simultaneously in the Deeds Office.
STEP 8 – DEEDS OFFICE PROCEDURE
On the day when the deeds are lodged personal printouts of the seller and purchaser and the property are made and the Deeds Office checks whether there are any interdicts against the property. The deeds are then sorted for distribution to the various examiners in the Deeds Office.
The deeds are first examined on Level 1 by a junior examiner, thereafter it is examined on Level 2 by senior examiner and then examined on Level 3 by a monitor. This process takes about 7 to 8 working days, provided there are no unnecessary delays.
STEP 9 – PREPARATION
The deeds are then either passed and placed on preparation which means the day before registration and then all the attorneys must confirm whether they are ready to proceed with registration or the deeds gets rejected which means that the deeds are delivered back to all the attorneys, because the Deeds Office is not satisfied with the deeds and must it thus be corrected
and relodged and then the deeds must go through the whole examiner process from the beginning again.
STEP 10 – REGISTRATION
The day of the registration all the attorneys which are conveyancers must appear at the Deeds Office to registrar all the deeds and the purchaser becomes the new owner of the property and the seller’s existing bond is cancelled with the simultaneous registration of the purchaser’s bond. The bank must then pay according to the guarantees that was issued by the bond registration attorneys and investment account must be closed.
STEP 11 – PAYOUT OF PROCEEDS
The transferring attorney will then draw the finale statements of account for both the seller and the purchaser and the purchase price after deducting the bond cancellation figure received from the bond cancellation attorneys; bond cancellation costs of the bond cancellation attorneys; estate agent’s commission if applicable; costs of the compliance certificates; and the pro rata share of the rates clearance figures and levy clearance figures in case of sectional title property etc. must be paid to the seller and any credit balances to the purchaser which include the interest earned on the invested deposit minus the transfer cost; transfer duty payable, the rates clearance certificate fee and levy clearance certificate fee and the pro rata share of the rates and taxes and levy clearance figures in case of sectional title property will be paid out to purchaser. The new owner will usually then take occupation of their new property.
STEP 12 – DELIVERY OF THE TITLE DEED FROM THE DEEDS OFFICE
The Deeds Office will deliver the original title deeds and bond documents to the transferring attorneys and bond registration attorneys after a period of approximately 3 months, depending on whether there were any delays with data captured of the deeds by the Deeds Office.
STEP 13 – DELIVERY OF THE TITLE DEED TO THE CLIENT AND BANK
The original title deeds are then delivered to the purchaser or in the case where there was a bond registered over the property the title deeds together with the bond deeds must be delivered to the bondholder for safekeeping.
Please note that this is the step by step conveyancing process for a normal transfer and not a deceased transfer or a divorce transfer etc. which may include more steps and may take longer to register.