A Smooth Move
Your Legal Guide To Property Transfers
Whether you are the buyer or the seller, navigating the property transfer process can be daunting, particularly given the numerous legal and administrative steps involved. Understanding each step in the process is essential to avoid unnecessary delays, reduce stress, and ensure your rights and interests are protected throughout the transaction.
In South Africa, property transfers are governed by the Deeds Registries Act 47 of 1937, which establishes the legal framework for registering ownership and protecting property rights. Having an experienced conveyancing team by your side is important for managing the process efficiently, safeguarding your investment and ensuring that every legal requirement is met with precision.
What is the property transfer process?
The property transfer process, also known as ‘conveyancing’, is the legal procedure through which ownership of a property is passed from one party to another.
Steps in the property transfer process
Offer to purchase (OTP)
The process begins when the buyer submits an Offer to Purchase, which, upon acceptance by the seller, becomes a legally binding agreement. This document outlines key terms of the sale, including the purchase price, and any conditions of sale, such as bond approval or the sale of an existing property, and the timelines for completion.
Appointment of a conveyancer
A conveyancer is a specialist attorney responsible for handling the legal transfer of property ownership. In most cases, the seller appoints the conveyancer after the OTP is accepted to handle the legalities of the transfer. However, both the buyer and the seller are integral to the overall process and must cooperate throughout the transaction. The conveyancer ensures compliance with property law and prepares all the necessary documents.
Bond approval (if applicable)
If the buyer requires financing, they must apply for a home loan through a bank or financial institution. Upon approval, the bank will issue bond instructions to a bond attorney, who will handle the registration of the bond. This process occurs simultaneously with the transfer of property ownership, ensuring that the mortgage is registered over the property once the transfer is complete.
If the buyer’s bond is not approved by the deadline specified in the OTP, the sale may lapse unless both parties agree to an extension in writing. It is common practice to grant such extensions, particularly when there is clear evidence of progress in the bond application process.
Obtaining clearance and compliance certificates
The seller’s conveyancer applies for a rates clearance certificate from the municipality to confirm that all municipal rates and taxes are paid up to date. If the property is part of a sectional title scheme, a levy clearance certificate will also be obtained from the body corporate or homeowners’ association. Additionally, the seller is responsible for obtaining various compliance certificates, such as:
- Electrical compliance certificate
- Electric fence compliance certificate (if applicable)
- Beetle clearance certificate (in certain regions)
- Plumbing certificate (where applicable)
- Gas compliance certificate (if applicable)
Transfer duty payment
The buyer is responsible for paying transfer duty, a tax based on the property’s purchase price, with properties under R1,210,000 exempt. The buyer’s conveyancer calculates and ensures payment to SARS before the transfer proceeds. The buyer also covers costs such as transfer duty and guarantees, while the seller is responsible for clearance fees. Transfer fees, based on the property value, cover administrative costs.
Drafting and signing of transfer documents
The conveyancer prepares the transfer and bond documents, which must be signed by both parties. These documents typically include the power of attorney, deed of transfer and any required declarations for SARS. Once signed, the documents are submitted to the Deeds Office for registration.
Other than signing the relevant transfer documents in person and provided FICA (Financial Intelligence Centre Act) requirements are met, there is no further need to be present in person.
Lodgement at the Deeds Office
Once all documents are signed and fees paid, the conveyancer lodges the transfer and bond documents, along with any necessary clearance certificates, at the Deeds Office. The Deeds Office reviews the documents to ensure compliance with property laws, a process that typically takes seven to seven to 10 working days.
Registration and transfer of ownership
Once the Deeds Office approves the documents, ownership is transferred to the buyer. The buyer’s name is recorded on the title deed, and any existing bond on the property is cancelled. The Deeds Office issues a new title deed to the buyer, confirming the transfer of ownership. Upon registration, the buyer becomes the legal owner of the property, and the transfer process is complete.
On the day of registration, ownership of the property officially transfers to the buyer, and the seller becomes entitled to the proceeds of the sale. The estate agent typically coordinates the handover of keys. It usually takes a few days for the seller’s funds to be released, depending on bank processing times and other administrative steps.
What if the buyer or seller breaches the agreement?
The consequences of a breach depend on the terms outlined in the OTP. Penalties or claims for damages may apply, and the non-defaulting party may have the right to either enforce the agreement or cancel the sale, depending on the nature of the breach.
Can the buyer move in before registration or the seller stay after?
Yes, but only if agreed to in the OTP. This is typically done through an occupational rent clause, which sets out the terms, including the rental amount and occupation date. If this arrangement is not included in the original agreement, the parties may enter into a written addendum at a later stage to formalise the terms.
How long does the transfer process take?
The property transfer process typically takes eight to 12 weeks, depending on factors such as the complexity of the transaction, the efficiency of the Deeds Office, and the responsiveness of all parties involved.
Delays in the registration process can stem from various factors, including late payments, outstanding municipal clearance certificates, backlogs or issues at the Deeds Office, or delays in obtaining transfer duty receipts from SARS. Unfortunately, property transfers are complex and involve multiple role players. Buyers and sellers are advised to remain optimistic but also prepared for potential delays.
Attorneys involved during the transfer process:
- Transferring attorney (appointed by the seller) handles the transfer.
- Bond attorney (appointed by the buyer’s bank) registers the new bond.
- Bond cancellation attorney (appointed by the seller’s bank) cancels the existing bond.
Buyer vs. seller cost responsibilities
| The Seller | The Buyer |
| Estate Agent’s Commission
– To be agreed upon between the estate agent and seller Compliance Certificates – To be sourced by the seller Rates Clearance Certificate – Include all amounts owing to the municipality as well as provisions for 60 days’ advance amount Levy Clearance Certificate – From the Body Corporate or Homeowner’s Association. Bond Cancellation Costs a. To be paid by the seller to cancel their current bond if one is registered b. This fee is payable irrespective of the balance on the home loan account balance |
Transfer Cost
– To be paid to the transferring attorneys attending to the transfer and include provisions to obtain the rates clearance figures and certificate and the levy clearance figures and certificate from the body corporate or homeowners association. Bond Registration Cost – To be paid to the bond registration attorney attending to register the bond Occupational Rent – To be paid to the seller if the purchaser takes occupation before registration of the property takes place Transfer Duty – To be paid to the South African Revenue Service (SARS) |
Tracking the process of your transfer
Our firm provides regular weekly updates, along with additional notifications as key milestones in the transfer process are reached. A dedicated staff member is assigned to your matter to ensure consistent communication and timely feedback. You are also welcome to contact us at any time for a progress update.
The property transfer process can be complex, but with Hammond Pole Attorneys, you can ensure a smooth transition. Our conveyancers guide you through every step, ensuring compliance with South African property law and protecting your interests. Engaging with us early helps avoid delays and ensures legal accuracy, giving you peace of mind throughout the process.
Blog by Brendan Michie