An offer to purchase (OTP) is signed by the purchaser. Once the seller accepts the offer, an agreement of sale comes into existence. This agreement will only be valid if it is in writing and signed by both the seller and the purchaser.

The purchaser / bond originator applies to the bank for finance. A bond application will normally form part of the suspensive conditions, which are events that need to happen before the sale is finalised.

The estate agent will send the sale agreement to the transferring attorney. There may be up to three (3) attorneys involved:
Transfer Attorney (Conveyancer) | Bond Cancellation Attorney | Bond Registration Attorney

The purchaser’s bank will then instruct a bond attorney to register a mortgage bond, which is a special loan that uses fixed property as security and is registered with the Deeds Office.

The seller’s bank instructs its attorney, i.e. the cancellation attorney, to cancel the seller’s bond. The cancelation attorney then sends the title deed and guarantee requirements to the bond attorney and the transferring attorney.

The transferring attorney requests a rates clearance certificate from the local Council. The property can only be transferred once all municipal charges and associated costs have been paid in full to the relevant parties. Once this is done, a rates clearance certificate will be issued. The seller may be required to pay a few months in advance to obtain the certificate; however, any credit on the account on the date of transfer will be refunded.

The transferring attorney will do a Deeds Office search to check all the details of the property. Thereafter the transferring attorney will assemble and prepare the transfer documentation.

The parties will be contacted by the transferring attorney to come in and sign the documents. The seller will be required to sign a power of attorney to transfer, as well as a number of affidavits to verify marital status, financial status and identity.

The documents required by the parties are:
• Copies of identity documents
• Proof of residence
• Income tax number
• Marriage certificates
• Antenuptial agreement
• Divorce orders

These documents will be needed to meet the Financial Intelligence Centre Act (FICA) requirements. Apart from FICA, the transfer process is required to satisfy the necessary criteria of several regulatory instruments, such as the Transfer Duty Act and the Value Added Tax Act for the South African Revenue Service (SARS) and the Municipal Property Rates Act.

The purchaser pays the transfer costs and his or her share of the rates and taxes. A pro forma account will be presented to the purchaser with estimated costs. The purchaser will receive a final account after the property has been registered and the actual costs are known. The costs vary because the date of registration is unknown at this stage of the process and a portion of the costs are determined by this date.

The transferring attorney instructs the lodging attorney to lodge the documents with the Deeds Office.

Deeds lodged at the deeds office are allocated a barcode for tracking purposes. The lodging attorney is located near the Deeds Office and acts on behalf of the transferring attorney, who may not be in the vicinity. Our lodging attorneys are Austen Smith Attorneys. The lodging attorney will contact both the cancelling attorney and bond attorney to ensure that all the documents are lodged on the same day. The documents must be registered at the same time because the seller’s bank has guarantees to ensure it will be paid when the bond is cancelled, and they are not prepared to cancel the bond until the new bond is registered.

A Deeds Office examiner will carefully check all the documentation. This normally takes between 7-10 working days for matters to make their way from Lodgement to Registration.

Once the transfer is registered ownership passes. Purchaser’s new bond is registered. Seller’s existing bond is cancelled. The seller is paid out the net proceeds and the estate agent is paid commission.

Once registered, the deeds are numbered and microfilmed. It can take up to three months for the deeds office to deliver the original title deed and mortgage bond back to the conveyancer. Once delivered, the conveyancer will send original title deed to the relevant bank or to the Purchaser.

Should you require further information, feel free to contact our offices.