Transfer of ownership of an immovable property involves more than a signature on an Offer to Purchase or the payment of the purchase price. Conveyancing is the legal process of obtaining ownership of immovable property as well as the registration of mortgage bonds and other rights to immovable property. The conveyancing process begins with the Offer to Purchase and continues through to the registration of ownership in the Deeds Office.
Here are a few frequently asked questions we receive from sellers and buyers. This will provide you with more clarity regarding the process and give you a better understanding of what is required:
In a normal conveyancing matter there are 3 attorneys:
Transfer fees are based on the value of the property. These fees are determined by the Law Society. The Law Society provides the fees to the transferring and bond attorneys as a guideline. The disbursements, however, are at the discretion of the attorneys and these may vary from attorney to attorney.
Clients often get confused that when they hear transfer duty, transfer fees and what they are liable for. Transfer duty is the amount paid to SARS on property that the buyer buys. Currently properties below R900 000 are exempt from transfer duty however transfer fees are always payable on any amount as this is the fee for the attorney to attend to the transfer.
Municipal clearance amount is the amount that the municipality charge when a property is transferred. The municipality usually charges anything from 3 – 6 months in advance. This is calculated by them and is provided to the transferring attorneys when same is applied for.
Whether or not you own 10%, 50% or 80% of a property, you still pay transfer costs when you acquire the percentage of the property you did not own. There is still an actual transfer that takes place. Transfer duty is payable on the value of the property minus the amount (percentage) you already own and this is calculated by SARS and based on the market valuation of the property.
This is a question without a definite answer. The standard time is from 6-8 weeks however there may be different factors that can make this time frame longer or even shorter.
The municipality’s system takes anything from 6 weeks and more to update from the deeds office and show a change in ownership. In this time, as a seller, you won’t be able to close your account or, as a buyer, open a new account. After the 6 weeks both seller and buyer can attend the offices of the municipality to open and close their account. The municipality will request the seller to provide an instruction letter from the transferring attorneys to process the refund. There is no time frame in which the municipality operates to attend to the refund and this can take any amount of time.
SARS use these estate agent valuations to estimate the market price of the property and this amount is used to calculate the amount of transfer duty if applicable.
Once the matter registers in the deeds office, payments will usually be made 2-3 days after registration. This is to allow time for a bond to pay out and for the attorney to work out the finances.
You will work according to the offer to purchase you signed however most offers will say on registration. When the property registers, then it is up to the buyer and seller to negotiate with the agent a time convenient for both parties to either vacate or occupy.
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