Sold your property? What's next? What happens when I sell my house or buy?
The process of transferring ownership of a property from an owner/seller to the buyer starts with a sale agreement which is then handed to a specialist attorney and is called "conveyancing" - conveying ownership from one person to the new buyer. Such an attorney needs an additional qualification as a "Conveyancer".
What does a Conveyancer do?
1. The main purpose of a Conveyancer is to secure the funds from the buyer to cover payment of the purchase price. This may be partly or all in cash, or partly cash and part mortgage loan from a bank, or it may even be 100% mortgage loan. Their job is to ensure that on the day of registration of transfer of ownership, the funds to pay the seller are available to be released and paid to him. No payment to the seller gets made before the date of registration. This protects both parties and ensures that each gets what they bargained for when the sale agreement was signed.
2. The documents for the change of ownership by law are required to be prepared and signed off by a Conveyancer as well as the draft new title deed, and this Deed of Transfer gets registered in the government Deeds Registry for the area (usually Province).
3. Certain certificates are required to be obtained for every transfer and it is the Conveyancer's job to call for and collect these in. They include a Rates Clearance Certificate from the local municipality, a Levy Clearance Certificate where the property is under Sectional Title, an Electrical Clearance Certificate, and a Pest Clearance Certificate. Where there is a gas installation, a Gas Clearance Certificate is also required.
4. There are various costs relating to these Certificates as well as the Conveyancing process, and including Deeds Office registration costs, and the Conveyancer needs to collect these in from either the buyer or the seller as provided in the sales agreement.
5. Usually, the seller has a mortgage bond which needs to be cancelled simultaneously with the change of ownership, and the Conveyancer is required to liaise with the Conveyancing attorney appointed by the bank to ensure that the purchase price is split and the portion due to the seller's bank is paid.
6. Similarly if the buyer is partly funding his purchase price through a mortgage loan, the lending bank will appoint it's own Conveyancer to prepare those documents which are also then registered in the Deeds Office as a mortgage bond to secure repayment to the bank by the buyer of his mortgage loan.
7. Sometimes one Conveyancer is appointed for the transfer process as well as the bond cancellation and the new bond registration, and sometimes there are three different Conveyancers appointed, all liaising with each other to link the documents for simultaneous registration. In addition, as the KZN Deeds Office is in Pietermaritzburg, you also need a Conveyancer for each Deed to be present there to record the registration - therefore up to 6 Conveyancers can be involved in one property registration.
8. Mc Naught and Company serve on the panels of Standard Bank, FNB and Nedbank and sometimes all three local processes are handled by us under one roof.
9. We still hold the record in KZN, I believe, for the fastest registration of 11 days from sale to registration, including the days being processed in the Deeds office, but this has become almost impossible these days - largely due to the snail-pace process the Municipalities are working at and the requirement that rates, electricity and water accounts need to be paid in advance before they will release clearance certificates. In Durban the electricity department has failed to read meters for months and even with photos of meter readings being taken and sent to them, the issue of clearance certificates can be held up for weeks.
What happens on Registration in the Deeds Office?
1. Deeds lodged for registration usually take 10 days to be processed and the day before anticipated registration, all parties are notified to be ready, Deeds office fees are paid and the banks are advised to expect registration the next (working) day and for payments to be ready to process then.
2. On registration, ownership of the property passes to the buyer and the draft Deed of Transfer prepared gets signed and stamped and it is now the new official Title Deed of the property naming the buyer as the new owner; the seller's mortgage bond over the property is cancelled and the buyer's mortgage loan and bond is registered and a stamp put on the new Title Deeds warning that the property is mortgaged and has a loan outstanding on it. This means that ownership of the property can't be given to anyone new without first securing repayment to the bank of that loan.
3. The buyer is now entitled to occupation of the property, unless in the sale agreement provision was made for the buyer to occupy earlier and pay rent until he became the owner.
4. As ownership is now the buyer's, any problems raising are also now the buyer's and it is said that the "risk" in the property has passed to the buyer.
5. Usually from this date also, rates and levies become the buyer's responsibility as well as electricity and water charges and the buyer is expected to open accounts with these departments to ensure a continuous supply of electricity and water.
Be sure, whether you're buying or selling, to request that a top conveyancing firm handles the conveyancing process - we are specialists in the field with over 40 years of experience fighting to get seller and buyers' properties and mortgage bonds transferred first and fast: