How Does the Property Transfer Process Work in South Africa?

The property transfer process can be complicated for first-time property buyers. Below is a guideline of the processes to be followed in order to complete a successful transfer of a property.

The Property Transfer Process

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1. Receive Offer to Purchase

This is a document signifying the buyer’s intention to purchase the seller’s property. It stipulates the terms and conditions for the sale and purchase of the property. An Offer to Purchase becomes legally binding once accepted by the seller. The transfer process commences once an Offer to Purchase has been signed by both the buyer and the seller and presented to the transferring attorney.

2. Securing the Purchase Price

The Offer to Purchase will stipulate the manner of payment of the purchase price. The purchase price can either be payable in cash or through bank finance or a combination of both. If the purchase price or part thereof is to be secured through bank finance, the purchaser will apply for a loan from a bank. Once the purchaser’s loan application has been approved, a bond registration attorney will be appointed by the bank 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.

3. Obtain Relevant Documents

There are various documents that are required during the transfer process depending on the nature of the transaction:

• Bond cancellation figures in respect of the seller’s existing bond over the property.
• Rates clearance figures from a local municipality.
• Levy clearance figures from a body corporate or homeowner’s association.
• Transfer duty receipt or exemption certificate from SARS.

4. Sign Transfer 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 the transfer. A Power of Attorney to pass transfer is an important document that 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 buyer on behalf of the seller.

5. Obtain Clearance Certificates

During the transfer process, the purchaser will pay the transfer costs to the transferring attorney which will include the transfer duty payable to SARS, if applicable. The transferring attorney will pay the transfer duty to SARS and obtain a transfer duty receipt, if applicable. If the transaction is exempt from transfer duty the transferring attorney will obtain a transfer duty exemption certificate. The seller will be liable for payment of the municipal and levy-clearance figures in order to get the necessary clearance certificates. The seller is also responsible for arranging the issuing of the electrical compliance certificate, gas compliance certificate and electrical fence certificate, if applicable.

6. Lodge in Deeds Office

Once all the documents are in order, the transfer documents will be submitted to the deeds office for registration. If there are various attorneys attending to different aspects of the transaction their documents will to be linked and lodged simultaneously with the transferring attorney’s documents i.e. the consent to cancel the seller’s existing mortgage bond over the property, and the buyer’s mortgage bond.

7. Registration and Finances

The process of registration in the deeds office normally takes between 8-10 working days from the date of lodgement.  Once registration is complete a new title deed will be issued confirming that the purchaser is the registered owner of the property.  Upon registration, the transferring attorney will finalize the parties’ statements of account and pay the proceeds of the sale to the seller.

How Adams & Adams’ Team of Property Law experts can help

The Property attorneys at Adams & Adams offer a broad range of property law services including negotiating and drafting agreements relating to the sale of residential and commercial properties, financial structuring of property transactions, registration of transfers of residential and commercial properties, registration of mortgage bonds over residential and commercial properties, and cancellation of mortgage bonds. Contact our property professionals today.