Bond Calculators

THE PROCESS OF CONVEYANCING
The following is a simple summary of information regarding conveyancing to assist Purchasers in understanding the process of conveyancing.

WHO APPOINTS THE CONVEYANCER?
The Seller is entitled to appoint his own conveyancer to attend to the transfer. This however can be varied by agreement between the Purchaser and the Seller.

WHAT DOES THE TERM CONVEYANCING MEAN?
It means the legal process whereby immovable property is transferred from the registered owner to a third party.

WHO ARE CONVEYANCERS?
They are attorneys with a specialist qualification who by law are the only people entitled to attend to the transfer of immovable property. Conveyancing work is reserved to prasticing conveyancers in order to vest them with the responsibility of ensuring that title to land cannot be challenged and to maintain a high standard of land registration.

THE AGREEMENT OF SALE
The conclusion of a written agreement of sale is the first step in the conveyancing process. The agreement must be in writing and signed by both the Purchaser and the Seller. Verbal agreements in respect of sales of immovable property are not valid.

SOME IMPORTANT CLAUSES IN THE DEED OF SALE TO BE CONSIDERED
If occupation does not take place simultaneously with transfer, then an occupation date should be fixed and agreement should be reached about rental payable by the Purchaser if occupation is taken prior to the date of registration.

All fixtures and fittings of a permanent nature form part of the sale and if any such fixtures are excluded then they must be listed in the agreement.

Most agreements of sale contain a "voetstoots" clause which means that the Purchaser must accept the property as he sees it and the Seller will not be responsible for any defects which manifest themselves after the date of the signing of the Deed of Sale. This clause will however not protect the Seller if the Seller knew of such defects and failed to inform the Purchaser.

Most Deeds of Sale also place obligations on the Seller to provide an Electrical Compliance Certificate and a Woodborer Certificate. The Occupational Health and Safety Act requires the user of an electrical installation to be in possession of a Certificate of compliance and most Deeds of Sale provide that the Seller will, at his cost, provide the Certificate and will rectify any defects in the electrical installations in order to obtain such a Certificate. Likewise it is normally the Sellers responsibility to provide a Certificate from a firm of fumigation specialists to the effect that the property is free of wood destroying insects.

Sale agreements may also be subject to suspensive conditions. The most common are that the agreement is subject to the condition that the Purchaser obtains a bond from a financial institution or is subject to the Purchaser receiving the proceeds of the sale of another property to finance the purchase price. The suspensive condition must be clearly stated and a time should be fixed by which the condition must be fulfilled.

THE NEXT STEPS IN THE CONVEYANCING PROCESS

THE MORTGAGE BOND
Usually the sale is subject to a loan (to be secured by a mortgage bond) being obtained by the Purchaser from a financial institution. The sale becomes binding between the parties when the Purchaser's loan is approved. The transfer therefore only proceeds when the Purchaser's loan has been granted and the financial institution, which grants the loan, appoints its own conveyancer to register the bond.

THE TITLE DEED
The conveyancer will need to obtain the Title Deed to the property in order to draw the transfer documents for lodgment in the Deeds Registry. It can take between three to four weeks (sometimes more) to obtain the Title Deed from the financial institution which holds the existing mortgage bond over the property.

CANCELLATION OF THE SELLERS EXISTING BOND
If there is an existing mortgage bond over the property, it must be repaid and cancelled. Notice of repayment must be given to the financial institution by the Sellers conveyancer. The financial institution appoints a conveyancer to cancel the bond and at the same time informs the Sellers conveyancer of the amount required to cancel the bond. The Sellers conveyancer arranges a letter of undertaking (guarantee) in terms of which the financial institution granting the Purchasers new bond undertakes to repay the Sellers old bond on registration. On receipt of that guarantee the conveyancer canceling the Sellers bond will prepare a consent to cancellation which will be signed by the financial institution.

SIGNATURE OF DOCUMENTS
Although the Seller and Purchaser have signed an agreement of sale, the formal transfer documents must still be signed at the offices of the Sellers conveyancer. If the Purchaser requires a loan secured by a mortgage bond to finance the transaction then the Purchaser must also sign bond documents at the office of the conveyancer attending to the registration of the Purchasers bond. The Purchaser must pay the cost of the registration of the bond and the cost of the registration of transfer and the Purchaser should make provision for these amounts and have the funds available on request from the respective conveyancers attending to the transfer and the bond.

THE PURCHASE PRICE
The Seller's conveyancer collects the purchase price either in cash or in the form of guarantees in favour of the Seller's conveyancer.

RATES CLEARANCE AND TRANSFER DUTY
Once the documents have been signed but before they can be forwarded to the Deeds Registry, a rates clearance certificate must be obtained from the Municipality which confirms that all rates and service charges for the current Municipal year have been paid in full. The rates year commences on the 1st July and ends on the 30th June in each calendar year. It can take up to two weeks to obtain a rates clearance certificate and considerably longer if there are rates and service charges outstanding.

Transfer duty must also be paid to the Receiver of Revenue who issues a transfer duty receipt. The Sellers conveyancer must collect the transfer duty from the Purchaser and pay it over to SARS.

The Sellers conveyancer can not lodge transfer documentation in the Deeds Registry until he has obtained a rates clearance certificate and a transfer duty certificate.

THE DEEDS REGISTRY
Registrations for East London and surrounding areas takes place at the Deeds Registry in King Williams Town.

THE REGISTRATION PROCESS
When all transfer documentation, bond documentation and bond cancellation documentation have been signed they are forwarded to attorneys in King Williams Town for lodgment in the Deeds Registry. It may happen that the cancellation of the Sellers bond, the transfer and the registration of the new bond may all be forwarded to different lodging attorneys in King William's Town who must liaise with each other and arrange for the documents to be lodged simultaneously in the Deeds Registry for registration. The documents are checked by examiners in the Deeds Registry to ensure that they comply with all legal requirements. If in order registration takes place approximately 10 working days from the date of lodgment. The cancellation, the transfer and the new bond are all registered simultaneously with each other.

HOW LONG DOES THE PROCESS TAKE
Having read this summary you will be aware that conveyancing is a complex process which requires on the part of the conveyancer and his support staff extensive knowledge, skill and accuracy. The length of time it takes to register a transfer depends on the co-operation of each party and the extent to which the parties have complied with their contractual obligations to each other.