You’ve found the property, negotiated the price and signed the Offer to Purchase.
So, what happens next?
For many buyers and sellers, the period between signing an Offer to Purchase and finally hearing the words “the property has registered” can feel complicated.
There are documents to sign, costs to pay, banks to deal with, SARS requirements to complete and several attorneys who may become involved along the way.
Understanding the property transfer process can make the experience far less overwhelming.
We believe that good conveyancing is not only about getting a property registered, it is also about keeping our clients informed and helping them understand what is happening throughout the process.
Here is a step-by-step look at how a typical property transfer works in South Africa.
Step 1: The Offer to Purchase Is Signed
The property transfer process generally begins with an Offer to Purchase (OTP).
Once the agreement has been signed by the relevant parties and has become binding, it sets out the terms of the sale.
Because an Offer to Purchase becomes an important legal agreement once accepted, buyers and sellers should make sure they understand its terms before signing.
Step 2: The Conveyancing Attorney Is Appointed
Once there is a binding sale agreement, the conveyancing process can begin.
The transferring attorney, also known as the conveyancer, is responsible for attending to the legal transfer of the property from the seller to the buyer.
In a typical South African property transaction, the seller usually appoints the transferring attorney, unless the parties have agreed otherwise.
The conveyancer then opens the transfer file, reviews the sale agreement and begins collecting the information and documentation required to proceed.
Depending on the transaction, other attorneys may also become involved.
These can include:
The bond attorney: appointed by the buyer’s bank to register the buyer’s new mortgage bond.
The bond cancellation attorney: appointed by the seller’s bank to cancel an existing mortgage bond registered over the property.
The different attorneys work together to ensure that the various parts of the transaction are ready for registration at approximately the same time.
Step 3: FICA and Supporting Documents Are Collected
Before the transaction can proceed, the attorneys will request information and supporting documents from the parties.
This forms part of the firm’s legal and regulatory obligations and may include FICA verification.
Providing complete and accurate documentation as soon as possible can help avoid unnecessary delays later in the process.
Step 4: The Buyer’s Finance Is Finalised
If the buyer is purchasing the property with the assistance of a home loan, the relevant bond conditions must be fulfilled.
Once the bank approves the finance, it appoints a bond attorney to prepare and register the mortgage bond.
If the buyer is paying a deposit, the deposit is generally dealt with according to the terms of the Offer to Purchase.
The balance of the purchase price must also be secured before registration, either through the approved bond, guarantees, available funds or a combination thereof.
Step 5: The Seller’s Existing Bond Is Dealt With
If there is an existing mortgage bond registered over the property, that bond generally needs to be cancelled as part of the transfer.
The seller’s bank provides cancellation figures showing the amount required to settle the outstanding bond.
A bond cancellation attorney is appointed to attend to the cancellation.
The transferring attorney, bond attorney and cancellation attorney then coordinate their respective matters so that the existing bond can be cancelled, the new bond registered where applicable, and ownership transferred to the buyer.
Step 6: Transfer Documents Are Prepared and Signed
The conveyancer prepares the legal documentation required for transfer.
The buyer and seller will be asked to sign the relevant transfer documents.
The exact documents will depend on the transaction, but the conveyancer will guide the parties through what needs to be signed and explain the requirements.
This is also an opportunity for clients to ask questions about anything they do not understand.
Step 7: Transfer Duty and SARS Requirements Are Attended To
Before a property can be transferred, the applicable tax requirements must be dealt with.
Depending on the transaction, transfer duty may be payable by the buyer. In certain transactions, VAT may apply instead of transfer duty.
The conveyancer attends to the necessary SARS process and obtains the required transfer duty receipt or exemption certificate before the matter can proceed to registration.
The amount of transfer duty, if applicable, depends on the purchase price or value of the property and the transfer duty rates applicable at the time.
This is why buyers should budget for more than just the purchase price when planning to buy property.
Step 8: Municipal and Other Requirements Are Finalised
Before lodgement, further requirements relating to the property may need to be completed.
Depending on the circumstances, this may include obtaining the necessary municipal rates clearance documentation and dealing with other certificates or requirements relevant to the transaction.
The conveyancer monitors these requirements and ensures that the necessary documents are in place before proceeding to the Deeds Office.
Step 9: The Documents Are Lodged at the Deeds Office
Once the financial, legal and administrative requirements have been completed, the relevant attorneys prepare their matters for lodgement at the Deeds Office.
Where a transfer, bond registration and bond cancellation are linked, the attorneys coordinate the lodgement of the documents.
The Deeds Office then examines the documents to ensure that they comply with the necessary requirements.
If everything is in order, the matter progresses towards registration.
Step 10: Registration: The Property Officially Changes Ownership
This is the moment everyone has been waiting for.
Once the transfer is registered in the Deeds Office, ownership legally passes from the seller to the buyer.
Where applicable, the seller’s existing bond is cancelled and the buyer’s new mortgage bond is registered at the same time.
The conveyancer will notify the parties once registration has taken place.
The purchase price can then be dealt with in accordance with the transaction, including settling amounts that need to be paid before the net proceeds are released to the seller.
The buyer is now the registered owner of the property.
Why Your Choice of Conveyancing Attorney Matters
A property transaction is one of the largest financial transactions many people will make during their lifetime.
Your conveyancing attorney is responsible for much more than preparing documents.
An experienced property transfer attorney helps coordinate the legal process, communicates with the various parties involved, identifies potential issues and works towards getting the transaction successfully registered.
Just as importantly, your conveyancer should keep you informed.
You should know where your transfer stands, what is required from you and what the next step will be.
Property Transfers Made Easier to Understand
From signing the Offer to Purchase to receiving confirmation of registration, every stage of a property transfer has a purpose.
Understanding the process helps buyers and sellers know what to expect and what they can do to help keep their transaction moving.
Our conveyancing and property law team assists buyers, sellers and property professionals throughout the transfer process.
Whether you are buying your first home, selling a property, investing in property or dealing with a more complex transaction, our team is here to guide you from offer to ownership.
Buying or selling property? Speak to our conveyancing attorneys about your property transfer.
