Property Transfer and Registration in South Africa – the whole process explained:

Transfer Process

Once a Seller has accepted of an Offer To Purchase (OTP) which was made by the buyer, the transfer process begins.

The Offer to Purchase (OTP) should contain all the essential details regarding the Purchaser, the Seller, the property description and the purchase price, as well as any other terms and conditions of the sale. It must be in writing and signed by all the parties.

Fulfilment of suspensive conditions:

Immediately after the acceptance of the Offer to Purchase, if there are suspensive conditions in the OTP (such as a bond that is required, or if it is subject to the sale of the Purchaser’s property) the Purchaser must start the process to fulfill those conditions, by applying for the bond/loan, and/or starting with the marketing of his/her property (if applicable).

Instruction sent to the transferring attorney:

In the meantime, a copy of the signed Offer to Purchase should be sent to the transferring attorney.

Payment of deposits:

The Purchaser will be requested to pay any applicable deposit within the period specified in the Deed of Sale.

The Transfer Attorney also requests cancellation figures from the Seller’s existing bondholder (if applicable).

Bond Registration Attorneys appointed:

Once the Purchaser’s bond is approved, the bank will send an instruction to the attorney of their choice to attend to the registration of the bond.

Full Purchase Price to be guaranteed:

The bond attorneys will issue a guarantee for the amount of the bond that was approved.

The transferring attorneys will request guarantees for the balance of the purchase price from the Purchaser.

Cancellation figures:

The Seller’s existing bondholder will supply the outstanding amount required for the cancellation of the bond, and simultaneously instruct attorneys of their choice to attend to the cancellation of the bond. The existing bondholder will also forward the Title Deed which was kept by them as additional security, to the bond cancellation attorney.

If there was no bond registered on the property, the Seller should be in possession of the Title Deed and must provide it to the transferring attorney.

Clearance certificates:

The transfer attorney will apply for a Rates Clearance Certificate from the local authorities, as well as a Levy Clearance Certificate from the Body Corporate or Home Owners Association (if applicable to the property). Once these have been calculated, the transferring attorney will be advised accordingly and the Seller must then make payment thereof in order to obtain the necessary Clearance Certificates. No transfer may be lodged with the Deeds Office unless accompanied by the Rates Clearance Certificate.

Signing of documents by Purchaser and Seller:

The attorneys attending to the registration of the bond immediately request from the transferring attorney the draft Deed of Transfer. This is necessary to obtain details regarding the title conditions, purchase price, date of sale etc.

After instruction to register the bond has been given by the financial institution, the transferring attorney will proceed to draw up all documents regarding the transfer and arrange for the signature thereof by both the Seller and the Purchaser.

Additionally, they will request payment of transfer costs from the Purchaser. Both parties are required to provide FICA documentation and adhere to FICA requirements.

Similarly, the bond attorney proceeds to draw all documents pertaining to the registration of the bond and has these signed by the Purchaser.

Transfer duty receipt:

The transferring attorney submits an application for a Transfer Duty receipt to the Receiver of Revenue (SARS), which must be paid by the Purchaser to the attorney to pay over to SARS. No transfer may be lodged with the Deeds Office unless accompanied by the Transfer Duty receipt (issued by SARS after payment of transfer duty).

Guarantees:

The bond attorney then issues the necessary guarantees in favor of the Seller and / or the existing bondholder of the Seller.
By this time the transferring attorney should already have received the required Clearance Certificates as well as the Transfer Duty receipt, and the Title Deed, and will now be in a position to lodge the documents for registration in the Deeds Office.

Lodgement and registration of transfer:

The transferring attorney then contacts the bond registration attorney as well as the cancellation attorney in order to effect the simultaneous lodgement of the various deeds in the Deeds Office. The transferring attorney attends to the registration of transfer of the property from the name of the Seller to the Purchaser. The cancellation attorney attends to the cancellation of the existing bond of the Seller. The bond registration attorney on the other hand sees to the registration of the new bond to be registered over the property as security for the Purchasers’ loan.

The set of three registrations is then submitted simultaneously to the Deeds Office and after being examined by the examiners in the Deeds Office, placed on preparation where the attorneys (transfer, bond registration and bond cancellation attorneys) attend to any notes made by the examiners in respect of the documents.

After the documents are cleared by the examiners on prep, i.e. all the notes have been attended to by the various attorneys, the documents are forwarded for registration the following day.

This whole process in the Deeds Office can take approximately 7-14 working days, but can vary depending on the situation in the Deeds Office.

After registration the attorneys involved attend to the following:

Present the guarantees for payment of the purchase price, which is then allocated towards settling the existing bond, paying any agents’ commission, and the balance in favour of the Sellers, being the proceeds of the sale.

The local authority is advised of the registration.

After registration, the deeds are numbered and micro-filmed at the Deeds Office, a process that may take up to 3 months, and then delivered to the transferring attorney. The transfer attorney then forwards the Title Deed to the Bond attorney/Bond holder who retains the same together with the registered bond document as secured. If there is no bond involved (i.e. it is a cash sale) then the Title Deed is given directly to the Purchaser.