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Is Eskom clearances necessary for transfer of property?

Written by Design on . Posted in Conveyancing.

The process of selling and transferring a property requires various legal documents to be signed, accounts to be settled and changed, certificates to be requested and more. Your conveyancing attorney will oversee this entire process for you, but in a world where knowledge is power, it is still important for you to know exactly what is happening, what documents you actually require and why.

When you look at the certificates you require, there are various categories – your Clearance Certificates, Compliance Certificates, and a Homeowners Certificate.

What do these certificates entail?

Your Clearance Certificates are certificates of proof from (a) your municipality and (b) the Body Corporate if you are selling a Sectional Title that any outstanding debt you had has been paid in full or that an arrangement (with the Body Corporate) has been made to pay the outstanding debt. Without these certificates it is impossible for the transfer of a property to continue.

The Compliance Certificates are required for electrical, electric fence (where applicable), gas, and beetle (in coastal regions) certificates. These need to be obtained prior to registration. The offer to purchase will usually specify the certificates that are required, and the bond attorney could also need these certificates to obtain consent to lodge the matter in the Deeds Office.

 The Homeowners Certificate is only necessary if the property is part of an estate with a Homeowners Association. Similar to the Clearance Certificates, the Homeowners Association must confirm that there are no outstanding debts on the property and that all conditions have been met, for example the purchaser agreeing to become art of the Homeowners Association.

By now you would have noticed that Eskom is not mentioned in any of these certificates that you require. So, what do they have to do with anything?

Where does clearance from Eskom fit in?

You do not need a certificate from Eskom for the transfer of a property to be completed. The Rates Clearance Certificate that you do require from the municipality in which the outstanding debt from the past two years as well as a monthly average for the next 4 to 6 months is calculated on your municipal bills will include your electricity.

It is, however, always wise to ensure that your Eskom bill is fully paid and that all these accounts for the property are transferred to the new owner, lest you are held liable for the purchaser’s consumption.

If you require attorneys, you can trust and that has your best interests at heart, don’t hesitate to contact AED Attorneys. Our extensive experience in conveyancing means that we know how to transfer your property quickly and carefully.  

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

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What can you do when a co-owner of a property dies or wants out of the property.

Written by Design on . Posted in Conveyancing.

Buying a property in a co-ownership agreement with a loved one, spouse, or business partner is a means for many to get into the property market. That property can be used as a primary residence, a business location or as a rental property and both owners can enjoy the benefits of it. Things change, however, and there are many reasons that one owner can no longer own the property. They could have passed away, they might want to emigrate, the relationship could have turned sour, or they might simply want to downsize their portfolio. Regardless of the reason, property ownership is a legal commitment and various laws dictate what happens to a co-owned property. These laws can differ greatly depending on the reason as to why one owner exits the agreement. Let’s have a look at some of the most prevalent situations.

The relationship between co-owners

The relationship between co-owners can often influence how the co-ownership came about and what needs to happen to the property when one owner passes away or wants out. In any co-ownership situation, the best practice is to always have a detailed contract set up when the property is purchased and to have this contract include what is to happen when:

  • An owner passes away (and he/she is not a spouse)
  • A spouse married in community of property passes away
  • An owner wishes to sell
  • The owners wish to part ways (whether it be a business relationship that breaks down, a divorce, etc)

When an owner passes away

When an owner, who was not a spouse, passes away, one would wish that the contract and the co-owner’s will stipulated what is to happen with the property. Half of the property will be placed in the deceased estate and the condition of the deceased estate, for example, the individual’s debt, can influence what happens. When a business partner passes away and you had a business succession plan and legal agreements, chances are that they would stipulate whether or not the surviving partner receives the share upon payment to the estate. The agreement and the deceased partner’s will could stipulate whether a family member inherits half of the property. Regardless of who receives the deceased individual’s shares, you will need to transfer the property.

A spouse married in community of property

In this instance, you also own the property half-half. The entire property would go into the deceased estate and the estate needs the be processed, debts paid, and all other matters relating to it dealt with. If the deceased estate’s debt, for which the surviving spouse can also be held accountable, is of such a nature that assets need to be sold to settle it, the property could be in danger of being sold. If this is not the case, the deceased individual could have his/her surviving spouse inherit half of the property in which case the entire property will need to be transferred to the surviving spouse as sole owner, and you might need to re-qualify for the bond on the property. If the beneficiary is another family member, half the property will go to him/her.  

The one owner wishes to sell

If the one owner wishes to sell and the other does not, it could be stipulated what is to happen in the contract. Usually, the other owner would have the first option the buy the 50% of the shares that do not currently belong to him/her. If both are satisfied with the selling price, it could be a simple transfer of the property ownership. It could happen that an agreement cannot be reached in which case the property could be sold as a whole and both owners receive their share. The now previous owner could decide to buy the property again as a sole owner or find a new partner.

If the owners wish to part ways

This can be very similar to the situation above and it often happens the property as a whole is sold with each owner receiving his/her share, or the one owner buys out the other.

Co-owning a property is a bit more complicated than sole ownership. Our best advice would be to have a clear and nuanced contract that cover all reasonable eventualities concerning the death or departure of one owner. It avoids any unnecessary complications and confusion. If you need any assistance with the conveyancing of a co-owned property or the legal matters concerning the deceased estate of a co-owner, don’t hesitate to get in touch with the AED Attorneys. We understand that the loss of a loved one, the administration of a deceased estate, and the transfer of property can often all be part of the same traumatic event. Our single team of dedicated experts will take away the worry and stress when they handle it all.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

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10 Conveyancing terms you need to know as the property buyer/seller

Written by Design on . Posted in Conveyancing.

The transferring/conveying of property from a seller to a buyer can be a lengthy process that involves multiple people and lawyers. It is essential that the paperwork is done to the highest standard and that the property is properly from the seller’s ownership to the buyers. There is a lot of terminologies and specialised terms that real estate agents and lawyers will be very familiar with when transferring occurs. These terms might be completely foreign to the buyer/seller, and in this article, we would like to fix some of that. Read on to gain some insight into the terminology that can be used when your home is being transferred.

  1. Bond attorney

The bond attorney is one of the three main attorneys that will work to ensure the property is transferred properly. This attorney is responsible for getting the buyer’s bond registered after the home loan has been approved. The bond attorney is usually appointed by the bank providing the home loan. 

  • Bond originator

The bond originator is the person responsible for the new bond application. In other words, it is the buyer that now needs a bond.

  • Cancellation attorney

The cancellation attorney works with the bond attorney, but this individual is responsible for getting the seller’s existing bond cancelled at the bank. He/she is usually appointed by the bank that provided the seller with his/her bond.

  • Conveyancing

Conveyancing is the branch of the law that has to do with the preparation of all the documents to have a property transferred. Conveyancing attorneys have to be registered as such to be able to practice in this specialised area of the law.

  • Bond cancellation costs

The discharge cost is the charge involved in getting the sellers bond cancelled. Whenever a bond is transferred to a new bond provider, additional fees may be charged to be released from the bond early and the seller’s bond has to be settled before the property transfer can continue. 

  • Lodging attorney / Correspondent attorney

Towards the end of the transferring process, once all bonds are ready to be cancelled and/or approved, the transferring attorney will ready all the documentation that needs to be submitted to the Deeds Office. There is crucial documentation that needs to be submitted at the same time or the transfer cannot progress. If the transferring attorney is not in the vicinity of the Deeds Office, he/she can instruct a lodging office to complete this step. The lodging attorney will contact the bond and cancellation attorney to ensure the required documents are submitted at the same time.

  • Rates Clearance Certificate

This certificate is obtained from the municipality in which the property is located. It states that the current owner no longer owes any money on the municipal charges associated with the property. The transfer of the house cannot continue until this certificate has been obtained.

  • Transferring attorney

This attorney is primarily responsible for the transfer of the property. He/she must be a qualified conveyancer and they are usually appointed by the seller. The real estate agency/agent involved in the sale could also advise the seller of a reputable transfer attorney if the seller doesn’t know of one. The attorney oversees all the aspects of the process like administrative tasks, drafting transfer documents, communicating with all the parties involved, etc.

  • Transfer duty

The transfer duty is a cost above and beyond the agreed-to price of the property that needs to be paid to SARS when the property is transferred. The value of the house will determine the value of the transfer duty. This duty needs to be paid to SARS within 6 months of the sale date.

  1. Transfer fees

The transfer fees are also calculated above and beyond the price of the property, but it is payable to the transferring attorney for their services. The final amount is partially determined by the attorneys and partially by the Legal Practice Council’s guidelines as to fees payable to transferring and bond attorneys. 

The home buyer and/or seller doesn’t always need to know the intricacies of what it is the different attorneys are doing, but when they are familiar with these 10 terms, the transferring process can be much easier to understand.

A reputable conveyancing attorney, like those at AED attorneys, will be able to keep the buyer and/or seller fully informed and up to date on what is happening with the transfer of the property so they are never left in the dark or have unexpected expenses pop up.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

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How does POPI affect the transfer of property?

Written by Design on . Posted in Conveyancing.

The POPI Act has sent everyone in a bit of a tizzy. Do I have to comply? Does my company comply? Do I have to email our client/newsletter list? Do I have to delete all my data? These questions shouldn’t be new, though, as the Act has been around for quite some time. Now, companies can just receive a rather hefty fine of up to R10 million and be blacklisted. It is this reality that seems to have suddenly hit home.

The thing is, everyone has to comply, and you have to double-check that your company does. You can do this by sending emails to your client/newsletter lists, but it doesn’t mean you will have to delete all your data.  There are some industries and some transactions that deal with a lot more personal data than others. In these industries, professionals have to cross their t’s and dot their I’s. The Real Estate industry is definitely one such example.

The POPI Act

By now, we all know that the POPI Act has been put in place to protect consumer’s personal data. A company has to responsibly collect, process, store, and share personal information or face the risk of paying civil damages or being sued. There are exclusions and exemptions to the Act. If data has been de-identified to the point that it cannot be re-identified, and if the data is connected to terrorists and related activities, it is excluded from the Act. If the public interest outweighs the privacy of the individual or if the processing of data involves a clear benefit to the Data Subject or Third Party, it is exempt from the ACT.

What about Property Transfers?

Whenever you buy or sell a property, there is a lot of personal information that needs to be provided by the buyer and seller and shared between interested parties, from the real estate agent to the bank to the attorney(s) involved. The real estate industry and the law firms that form part of it were already heavily regulated long before the POPI Act came into force. This means that the data disclosed to interested parties is also already regulated. What the POPI Act had done, however, is create another layer of protection for the consumer and a clear avenue of recourse should their information not be processed responsibly. It also brought South Africa more on par with the same type of privacy laws already in effect in other countries worldwide. 

The disclosure of information when a property transfer takes place will still happen; it has to. Private information about the buyer and seller still needs to be shared amongst stakeholders in the transaction. The focus now is on how stakeholders will do so responsibly. This includes receiving explicit consent from the buyer and seller that the necessary information may be shared. That information has to be stored securely and only shared among stakeholders.

Luckily, this type of data security has already been in place at reputable mortgage originators, estate agents, insurers, and attorneys. Their responsibility now is to ensure that all individuals that have to work with the data are fully aware of the seriousness of keeping it secure and that individuals can be personally liable if they compromise it.

Consumers also need to act responsibly when they are asked to share their own personal information. Make sure you are working with reputable companies. You can even go as far as to ask how they are ensuring that your data is safe and how they are staying POPIA compliant.

AED Attorneys understand how precious your personal information is. We do not disclose any of your information unless it is done with your consent and for the specific purpose of transferring a property that you are either the buyer or seller of. AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

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What is the difference between transfer fees and transfer duty and when is each payable or not?

Written by Design on . Posted in Conveyancing.

Buying a house should be a marvellously wonderful experience. If it’s your first house, then it is likely the first big investment you are making towards your future and your excitement is running high. Beware, however, of the hidden and not so hidden costs that are involved with home purchases – things like spending money on moving, structural issues, levies, insurance, and bond fees. The two that are often confused are transfer fees/costs that always have to be paid and transfer duties that have to be paid sometimes.

Transfer duties

This is an additional cost above and beyond the price of the house that is payable to SARS when a property is transferred from one owner to another. The amount is calculated on either the purchase price of the property or the value of the property depending on which one is higher. The higher value will put you into a percentage band that will determine the final amount payable. From the 1st of March 2020, any property purchased at a value of R1 000 000 or less is exempt from paying transfer duties, hence the rate at which you pay this tax is 0%. For a property with a value of R1 380 000 for example, the transfer duty is R11 250 plus 6% of the value above R1 357 000. Below is a handy table of the transfer duty calculations:

Value of the property (R)Rate
1 – 1 000 0000%
1 000 001 – 1 375 0003% of the value above R1 000 000
1 375 001 – 1 925 000R11 250 + 6% of the value above R1 375 000
1 925 001 – 2 475 000R44 250 + 8% of the value above R1 925 000
2 475 001 – 11 000 000R88 250 + 11% of the value above R2 475 000
11 000 001 and aboveR1 026 000 + 13% of the value exceeding R11 000 000

If the property you purchase is subject to transfer duties, you are required to pay the calculated amount to SARS within 6 months of the sale date. If this is not done within the allotted time, you will be subject to penalties. The conveyancing attorneys will handle the payment, but this payment has nothing to do with their transfer fees.

Transfer fees

Unlike transfer duties, this is an additional cost above and beyond the price of the house, that always has to be paid to the attorneys handling the administrative tasks of the purchase. The total amount payable is also dependent on the value of the property and thus varies from purchase to purchase. The Legal Practice Council (formerly known as the Law Society) does provide a guideline as to the fees payable to the transferring and bond attorneys, but the disbursements (for example postage and petties, document generation fees, rate clearance costs) are at the discretion of the attorneys and may vary.

Bond fees are for the registration of a bond in your name (buyer). If the seller still had an active bond, then there will be a fee to cancel the bond.

It is important when selling or buying a home to involve attorneys that will transfer ownership efficiently and with transparency. AED Attorneys does just that as they ensure that a property is handled with care as quickly as possible. With their in-house conveyancing team and transparent dealings, your property is in the best hands possible.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

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You’ve Lost Your Title Deeds – Now What?

Written by Design on . Posted in Conveyancing.

A Title Deed is a document that proves you are the legal owner of a property and is of utmost importance when you need to transfer the property. Once the purchaser’s bond has been approved when you sell your house, the Conveyancer will request the original Title Deed.

If this document has been lost, misplaced or damaged, you, as the Property Owner, have a means available to you through Regulation 68(1) of the Deeds Registries Act 47 of 1937, which allows you to apply for a certified copy to be issued by the Registrar of Deeds.

How to Obtain a Copy of Your Title Deed

For this process, you will need to sign an affidavit in front of a Notary Public, a specialist Attorney with knowledge of specific acts and processes, and legally empowered to witness signatures officially. Most attorney firms, such as AED Attorneys, employ the services of a Notary Public.

This affidavit must state the following:

  • Details of the lost Deed;
  • How it came to be lost, damaged or misplaced;
  • That a thorough search for it has been done;
  • Assurance that no one has detained it as a security for a debt;
  • That, should the original be found at a later stage, it will be provided to the Registrar of Deeds;

Missing Title Deed of Bonded Property

Should there still be a bond on the property, the bank that holds the bond will need to provide a letter stating that they were not in possession of the Title Deed and have no objection to you applying for a certified copy of another one.

Application Open for Public Comment

As an additional measure to minimise fraud, a further requirement was implemented in a Regulation amendment in 2019, stating that the application must first be advertised in the Government Gazette and a local newspaper where the property is located. For two weeks after that, the application will have to lie open for inspection by the public at the Deeds Office.

During this period, any person with a vested interest may object, in writing to the Registrar of Deeds, to this certified copy being issued.

Who May Apply For a Copy of the Missing Title Deed?

Only the owner/s of the property may apply for the certified copy. If there is more than one owner, then all signatures must be on the application document. Should the owner be deceased, as happens in many cases, only the Executor of the Estate who the Master of the High Court has appointed may make the application.

Once the process has been followed and completed, with no objections having been filed in the two weeks, the application for the issue of a certified copy can be lodged at the Deeds Office.

The copy will be printed with an endorsement stating, “Certified a true copy of the registry duplicate in terms of Regulation 68 of Act 47 of 1937 and is issued to take the place of the original“. The Deeds office will also record that a copy was issued.

In the event that you misplaced your Title Deed, contact AED Attorneys for assistance. We will provide you with further information on how to start this application process. We have a dedicated and efficient conveyancing team who can provide informed and professional advice on this matter, as well as many other property-related legal issues. In addition, our efficient in-house Master Consultant will attend to any other Master’s Office work required by the client.

AED Attorneys offers a personal touch and treat all our clients with patience and respect, no matter the size of the estate. Our staff are passionate, reliable and devoted to their work, placing emphasis on continuity and quality.

AED Attorneys understands that every situation is unique, and although they strive to ensure that the information contained herein is accurate at the time of publishing, it cannot be guaranteed to be without errors or omissions. As a result, AED Attorneys, its employees, independent contractors, associates or third parties will under no circumstances accept liability or be held liable for any innocent or negligent actions or omissions in this article, which may result in any harm or liability flowing from the use of or the inability to use the information provided.

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Cancellation of an Offer to Purchase

Written by AED Attorneys on . Posted in Conveyancing.

To do or not to do….

What happens when a seller decides he no longer wants to sell his property or the buyer finds a more suitable property to purchase after an Offer to Purchase has been signed? Can a party simply walk away from the deal, or are there potential repercussions?

The short answer is yes, there can be major repercussions and, unfortunately, this can prove to be extremely costly for the responsible party.

Possible repercussions include the following:

  • The aggrieved party could sue for out-of-pocket expenses;
  • The conveyancing attorney could claim wasted costs for the work done on the transaction up to date of cancellation of the offer; and
  • The estate agent can claim their full commission on the sale that has been cancelled, depending on the wording of the offer.

An Offer to Purchase is a written document that, once signed by both buyer and seller, becomes an Agreement of Sale. It is important that the parties keep in mind that an agreement of sale is a legal, binding document and both parties are required to fulfil their responsibilities as laid out in the agreement.

Cancelling an agreement of sale is only possible should there be a basis in law for doing so.

An agreement can be cancelled under the following circumstances:

  • The agreement of sale can be cancelled based on a clause contained in the agreement. The said clauses can stipulate under which circumstances either party is allowed to cancel the contract. If a party can prove that cancelling the contract is in accordance with such a clause, there would be no penalties for cancelling the agreement and it would no longer be binding.
  • The agreement can further include a suspensive condition. Only once a suspensive condition has been met, will the contract come into force. An example of such a suspensive clause is where the sale is dependent on the buyer obtaining bond finance. This condition protects the buyer from being liable for the purchase price without the backing of finance.
  • A further way of cancelling the agreement is based on a party’s breach of contract. If one party to the agreement acted in a way that he contravened the agreement, the other party may lawfully cancel the agreement. The aggrieved party may also, claim damages from the party who was in breach of the contract, depending on the circumstances of the cancellation.

As noted above, cancellation of an agreement is a complicated matter with many possible repercussions. It is advisable to always seek legal advice before cancelling an agreement to ensure it is done in accordance with the relevant terms and based on merit.

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The Conveyancing Process Explained

Written by AED Attorneys on . Posted in Conveyancing.

  1. Seller and purchaser sign a sale agreement
  2. Seller appoints a transferring attorney
  3. Transferring attorney awaits purchaser’s bond grant or cash to be paid into the attorney’s trust account
  4. Transferring attorney requests rates and taxes figures from local municipality
  5. Transferring attorney requests original title deeds, mortgage bond & cancellation figures from seller’s bondholders
  6. Bond attorney advises transfer attorney of amount available for guarantees
  7. Transfer attorney receives title deed and cancellation figures from cancellation attorney
  8. Transferring attorney requests guarantees from bond attorneys and draws up transfer documents
  9. Seller signs transfer documents. Buyer signs bond and transfer documents. Bond and transfer costs to be paid on signature by purchaser
  10. Bond attorneys provide guarantees to the transferring attorneys
  11. Transferring attorney sends guarantees to cancellation attorneys who obtain consent from the seller’s bondholder to cancel the seller’s existing bond
  12. Transferring attorney pays rates, levies and transfer duty to SARS
  13. Once all documents are in order, certificates and transfer duty receipts obtained, arrangements are made with the attorneys involved to have all documents lodged simultaneously in the Deeds Office
  14. Documents are examined in the Deeds Office (± 12 working days)
  15. Property is registered in buyer’s name. Seller’s bond is cancelled. Guarantees presented for payment.

Download this information as a PDF

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Seller and Purchaser’s Responsibilities

Written by AED Attorneys on . Posted in Conveyancing.

Seller’s Responsibility

Certificates to provide:

  • Electrical Compliance Certificate
  • Gas Compliance Certificate (if applicable)
  • Electrical Fence Compliance certificate (if applicable)

Costs:

  • Pay bond cancellation cost of seller’s existing bond
  • Pay rates clearance figures for outstanding debit plus four months in advance
  • Pay portion of body corporate levy figures or homeowner’s (if applicable)

Purchaser’s Responsibility

Costs:

  • Pay bond registration costs
  • Pay transfer costs
  • Pay transfer duty (if applicable)
  • Pay portion of body corporate levy figures or homeowner’s (if applicable)
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