What is the Conveyancing Process?
The conveyancing process is the legal transfer of property ownership from a seller to a buyer. It’s an essential part of property transactions, safeguarding both parties by ensuring that all documentation is compliant with South African law. Conveyancing is handled by qualified attorneys, known as conveyancers, who are responsible for managing the legal aspects of the transfer, including drafting documents, conducting due diligence, and liaising with banks, municipalities, and the Deeds Office.
How Long Does the Conveyancing Process Take?
The typical conveyancing process in South Africa takes around 8 to 12 weeks, depending on the complexity of the transaction and the efficiency of document processing. Various factors can influence the timeline, including obtaining FICA documents, arranging bond approvals, and receiving compliance certificates. Delays can arise if there are issues with documentation, compliance, or communication with the relevant parties.
When Does the Conveyancing Process Start?
The conveyancing process begins as soon as the Offer to Purchase (OTP) is signed by both the buyer and the seller. This OTP is a legally binding document that outlines the terms and conditions of the sale, including the purchase price, deposit amount, and any special conditions like bond approval. Once the OTP is in place, the conveyancers take over, collecting FICA documents, arranging clearances, and guiding the transaction through to registration.
The Conveyancing Process in South Africa: Step by Step
1. Agreement and Initial Setup
The process kicks off with the Offer to Purchase. Once the OTP is signed, conveyancers request FICA documentation from both parties, including proof of identity and address, and verify municipal account details. If a deposit is required, the buyer transfers it to the conveyancer’s trust account, where it is securely held.
2. Clearing Existing Bonds and Interdicts
If there is an existing bond on the property, it must be canceled before or at the same time as the registration of the transfer. The conveyancer liaises with the bank holding the bond to settle outstanding amounts and ensure the bond cancellation process aligns with the property transfer.
3. Bond Approval and Guarantees
For buyers financing their purchase with a mortgage bond, obtaining bond approval is essential. Bond attorneys are appointed to handle the bond registration, and they work with the conveyancer to secure the necessary guarantees, ensuring that funds are available to complete the transaction.
4. Rates Clearance Certificate and Transfer Duty
The conveyancer requests a Rates Clearance Certificate from the municipality to confirm that all municipal rates and taxes are up to date. In addition, the buyer pays transfer duty to the South African Revenue Service (SARS), and in some cases, SARS may request independent valuations to verify the property’s value.
5. Compliance Certificates
Several compliance certificates may be required before the property transfer can proceed, depending on the property’s features. These typically include:
Electrical Compliance Certificate
Pest/Beetle Certificate (if applicable)
Gas Compliance Certificate (if gas installations are present)
Electric Fence Certificate (if an electric fence is installed)
Compliance certificates are essential for ensuring that the property meets safety standards and that the transaction complies with South African regulations. Without them, the Deeds Office cannot process the transaction. Obtaining these in advance can prevent delays and ensure that both buyer and seller are protected from unforeseen issues post-sale.
6. Lodgment at the Deeds Office
Once all documents are prepared, the conveyancer coordinates with bond attorneys and any other involved attorneys to lodge the transfer, bond cancellation, and bond registration documents at the Deeds Office. The Deeds Office examines these documents over a period of 8 to 10 working days, verifying their accuracy and legality.
7. Registration and Payment of Proceeds
On the date of registration, the buyer officially becomes the property owner, and the conveyancer finalises the financial settlement, distributing funds to pay off any remaining bond balances, settling municipal accounts, and releasing any proceeds to the seller. The title deed is then microfilmed and retained by the Deeds Office before it is forwarded to the buyer or the mortgage holder.
8. Delivery of Title Deed
Once processed by the Deeds Office, the original title deed and bond documents are delivered to the conveyancer, who then provides them to the new owner or the bondholder for safekeeping.
Common Delays in the Conveyancing Process
Incomplete Compliance Certificates: Missing or outdated compliance certificates, such as electrical or plumbing clearances, can delay Deeds Office lodgment.
Outstanding Municipal Rates and Taxes: If rates and taxes aren’t up to date, obtaining a Rates Clearance Certificate from the municipality can be delayed.
Backlogs at the Deeds Office: The Deeds Office often has high volumes, which can slow down the examination and registration process.
Title Deed Errors: Errors in the title deed, such as incorrect information or encumbrances, must be corrected before registration.
Document Rejections: Occasionally, documents may be rejected by the Deeds Office due to errors, requiring correction and re-lodgment.
The Role of the Deeds Office in the Conveyancing Process in South Africa
The Deeds Office is crucial in property transactions in South Africa. This government institution is responsible for maintaining and updating property ownership records and ensuring that each transaction is registered according to legal standards. During the conveyancing process, the Deeds Office examines lodged documents to verify that all legal and regulatory requirements are met, protecting the rights of both the buyer and the seller.
FAQs about Conveyancing
What is conveyancing?
How long does the conveyancing process take?
Who is responsible for paying the conveyancing fees?
What happens if the conveyancing documents are rejected by the Deeds Office?
What are compliance certificates, and why are they necessary?
Compliance certificates verify that key installations, like electrical systems and gas appliances, meet safety standards. They are mandatory in South Africa and must be provided by the seller before the transfer of property ownership.
Understanding the conveyancing process is essential for anyone involved in a property transaction. At Jonker Vorster Attorneys, we’re here to guide you through each step, ensuring a smooth and legally compliant transfer.
Contact Hendre today for expert assistance with property transactions in South Africa.
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