Registration of titles - what you need to know

South Africans tend to gloss over our system of registration of title. We take it for granted and assume it is virtually the same the world over. This is not true.

We have one of the best and most secure systems of registration and land ownership in the world. Once you have a signed unconditional document you are entitled to take transfer and once you take transfer, i.e. have the property registered in your name, you have an unassailable right to the property that protects you against the whole world. In other countries you can be gazumped, losing the property to a better offer before registration. In some other countries you need to take out title insurance to protect your rights of ownership against the rights of other parties.

Even though the Offer to Purchase has been signed by both buyer and seller, the seller will remain the official owner thereof until the property is transferred into the buyer's name. Only an attorney who is specifically qualified (a conveyancer) may oversee this process. It looks like an uncomplicated exercise. The property must simply be registered in the name of the buyer and the deregistered from the name of the seller. It is for this reason that buyers and sellers alike are perplexed by how long the process takes.

The registration process takes time as it is but, believe it or not, there are things that can aggravate the situation.

A cash transaction could take approximately 6 weeks but a purchase conditional upon the sale of the buyer's property could take as long as 12 weeks to finalize. It is understandable that people who are not familiar with the process could feel that their applications have simply disappeared into a quagmire of bureaucracy never to be seen again. Behind closed doors however, a lengthy and rather complicated legal process is underway. Understanding this process will spare you many sleepless nights during the waiting period.

The People Involved

The Seller:
  • Accepts the Offer to Purchase
  • Usually hires the transferring attorney
  • Must provide documents essential to enabling the transferring attorney to manage the registration process.

The Buyer:
  • Makes the Offer to Purchase
  • Must apply for a bond from a financial institution (if not paid in cash).
  • Must provide necessary documentation and sign documents as needed

The transferring Attorney:
  • Transfers the property on to the buyer's name

The Bond/ Registrations attorney:
  • Appointed by the financial institution granting the bond to register the bond or the buyer if a cash transaction.

The Cancellation Attorney:
  • Appointed by the financial institution cancelling the seller's bond to cancel the previous bond or the seller/buyer if a cash transaction.

(it is possible for one attorney to handle all the aspects)

Buyers and sellers usually choose not to become involved in the legal process. For this reason it is extremely important to choose a competent attorney. An attorney's negligence or incompetence can cost you a lot of time and money.

The Process

The purchase is completed

The purchaser makes his initial payment (deposit) and receives a copy of the deed of sale for his records as does the seller. Simultaneously the Transferring Attorney is furnished with the original Deed/ Agreement of sale to enable him to draw up his documents and a copy is filed by the Estate Agency.

1. The buyer:
Pays the deposit and receives a copy of the signed deed of sale. The Estate Agent will also file a copy of the Deed.

2. The seller:
Gives the original deed of sale to an attorney who will forthwith act as the transferring attorney.

3. The transferring attorney:
Starts to prepare the necessary preliminary documents and makes sure that both the buyer and the seller sign them. To be able to do this the transferring attorney will need your identity document, marriage certificate and ante nuptial agreement amongst others. The transferring attorney is usually appointed by the seller and is responsible for the registration of the property within a reasonable time.

4. The buyer:
Applies for a bond. Once it is accepted the bondholder will instruct their chosen bond attorney to register the bond. Financial institutions tend to use the transferring attorneys for this.

5. The bond attorney:
Advises the transferring attorney of the amounts available for guarantees and requests the draft deed of transfer and guarantee requirements.

6. The transferring attorney :
Requests the necessary cancellation figures from the seller's bondholder and applies for a Clearance Certificate (statement of rates and taxes) without which the property can not be registered. This is obtained from the local authorities. The transferring attorney also applies for a Transfer Duty Receipt from the Receiver of Revenue which is also compulsory. He will give the Deed to the registering attorney upon request.

7. The existing bondholder:
Will supply the outstanding amount needed for the cancellation of the bond and instruct the attorneys to proceed with its cancellation. The existing bondholder will also forward the Title Deed in their possession to the transferring attorneys.

8. The registering attorney:
Requests the draft Deed of Transfer in order to obtain details regarding the title conditions, purchase price, dates of sale etc.

9. The bond attorney:
Will proceed with cancellation upon instruction of the current bondholder and receipt of the Title Deed. He draws up all documents pertaining to registration of the bond and has them signed by the buyer who is also responsible for the costs. He forwards all this to the transferring attorney who prepares it for lodgment.

10. The transferring attorney:
Draws all the documents regarding the transfer and arranges for them to be signed by both buyer and seller. He contacts both the bond and cancellation attorneys to effect simultaneous lodgment of the deeds. He pays rates; taxes and transfer duty received from the seller and buyer. The transferring attorney now proceeds to register the property into the buyer's name.

11. The cancelling attorney:
Cancels the existing bond after receiving the guarantees from the transferring attorney. He must also obtain consent to cancel from the bank holding the seller's bond.
Registers a new bond over the property as security.

13. Examiners:
The Deeds Office scrutinize the documents and make notes to indicate necessary changes to the attorneys who proceed with the alterations. Takes 10-14 days

14. The deeds registry:
Now processes the documentation. It takes 2-3 weeks to prepare the documents before they are ready for inspection. By then the buyer must have the balance of the purchase price available and the relevant financial institution's attorneys have the bond amount available.

15. Examiners:
Clear the documents and see to the notes after which it is forwarded for registration the following day. On the same day the bank pays out the loan amount in accordance with the guarantees.

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