CONVEYANCING

With due acknowledgement to the Law Society of South Africa
Selling your house

The term “conveyancing” describes the legal process whereby rights in fixed property are registered in the deeds office. These rights include ownership, mortgage, servitude, mineral rights and others. All these rights vest legally in a person only on registration. The registration process, therefore, places an official “seal” on a person’s rights in fixed property. “Fixed property” is any land, whether improved or not such as a house, farm or sectional title flat.

This pamphlet deals with the transfer of ownership pursuant to the sale of fixed property. The procedure is similar to that required for the ownership of fixed property pursuant to donation, inheritance, exchange or a divorce settlement and so forth.

A conveyancing transaction involves a chain of steps which begins with the deeds of sale and which continues through to the ultimate registration of ownership and the reconciliation of finances and payments.

Who is a Conveyancer?

A conveyancer is admitted as such by the High Court after having completed a special qualifying examination. In addition, only a person who has been admitted by the High Court as an Attorney, may practice as a conveyancer. All conveyancers are therefore, also attorneys. To be admitted, the person has to complete the required academic studies (usually four or more years for the necessary law degree), then a period of “articles” or work in a law-office for the necessary experience and then an extensive practical examination. If the qualified attorney wishes to practice in the highly technical branch of the law dealing with fixed property, he or she has to do intensive study of a large number of Acts of Parliament, regulations, High Court decisions and decisions by Registrars of Deeds relating to fixed property. Then he or she has to pass a conveyancing examination. Only after passing this examination will the High Court allow the attorney to practice as a conveyancer.

Who appoints a conveyancer?

In South Africa, the usual practice is for the seller to appoint a conveyancer for a property transaction, although this, like other aspects of a sale agreement, can be varied as a result of negotiation between the parties.

The purchaser may also appoint a conveyancer to advise him or her, but these charges will be over and above the conveyancing costs submitted by the seller’s conveyancer, who will be doing the actual transfer.

What is the first step in the sale of fixed property?

The sale of fixed property is affected by entering into a written contract referred to as a deed of sale. The first prerequisite is that the deed of sale must be a written agreement. It must be signed by both the purchaser and the seller (and by the seller’s spouse and the purchaser’s spouse in some cases). A written “offer to purchase” signed by a purchaser and accepted by a seller also constitutes a deed of sale. A verbal contract for the sale of fixed property is not valid.

The deed of sale is an important document which must be carefully examined. The parties (with the assistance of a conveyancer or attorney) must check that the total amount payable by the seller or his estate agent are incorporated in the document and that nothing mentioned in the document is contrary to any legal provision.

Occupancy of the property does not necessarily have to coincide with registration of transfer. If occupation takes place prior to registration, the deed of sale must provide what rent is payable until the date of registration.

Risk in the property passes to the purchases when the deed of sale is signed, although the consequences can be (and often is) changed in the deed of the sale itself. The purchaser must, therefore, take out insurance in appropriate cases.

The purchaser is usually responsible for payment of transfer costs. These are fixed in terms of legislation or by guidelines and the purchaser will be able to know in advance, to within a few rands, what the costs will be.

Finally, if the sale is subjected to the granting of a bond, this must be specified in the deed of sale. It should also be specified as to what the amount of the bond must be, how much time the purchaser will have to obtain the bond, who will apply and so forth. It must also be specified that if the purchaser is unable to obtain the required bond in time, then the whole deal is to fall through. Arrangements as to which amounts (if any) the purchaser has to pay in these circumstances should also be specified.

The deed of sale is only valid if it is signed by all the parties. Ownership does, however, not pass on signature of the deed sale. The purchaser becomes owner only on registration of the property in his or her name in the deeds office. The deed of sale grants the purchaser the right to claim transfer of the property. (For more details on the purchase of land, see the brochure “Buying and selling a house”).

What happens next?

The property must be signed by the seller and it authorizes the conveyancer to attend to the transfer on the seller’s behalf.

Both the seller and the purchaser will be required to call at the office of the conveyancer to sign certain documents which have been prepared by the conveyancer and which will enable the conveyancer to effect the transfer in the deeds office. The documents which will have to be signed are the following? 

What are the costs involved? 

The costs relating to the transfer of fixed property fall into three main categories:

Where a bond is to be registered, the purchaser will have to pay the stamp duty payable on the bond (0,2% of the amount secured by the bond) an amount charged by the financial institution for the inspection of the property, provisional interest and insurance premiums and the conveyancer’s fee (calculated on a sliding scale based on the amount of the bond).

Who arranges these transactions?

Having carried out the necessary searches in the deeds office and having checked all the details of the property and parties to the transaction, the conveyancer prepares the title deed and other necessary documents and on behalf of the purchaser pays the Receiver of Revenue and of both the seller and purchase the local authority.

Once the documents have been signed by the purchaser and the seller, and the purchaser has paid the costs and made satisfactory provision for the payment of the purchase price, the conveyancer can proceed with the registration of transfer of the property in the purchaser’s name. (He will only do so, however, once the purchase price has been paid or secured).

What happens with the trust monies?

Section 78(2a) of the Attorneys Act specifically makes provision that an attorney, at the instruction of any person, may open a trust savings or other interest bearing account and the interest is paid out according to instruction. These funds are protected by the Attorneys Fidelity Fund. The attorney may charge a fee for this service.

What happens at the deeds office?

The conveyancer will lodge the title deed and other documents that he has prepared in the deeds office for registration. The deeds office is a government registry of ownership in all fixed property and other rights in fixed property. If there is a bond to be registered the conveyancer attending to the bond (who is usually not the conveyancer attending to the transfer) will also lodge the bond documents in the deeds office for registration simultaneously with the transfer documents.

The examiners in the deeds office scrutinize the documents to ensure that they comply with all relevant legislation and regulations. When they are satisfied, they inform the conveyancer that the deeds are ready for registration and thereupon, in the presence of the conveyancer and registrar of deeds, the transfer of the property is registered in the name of the purchaser. The bond (if applicable) is registered simultaneously.

On registration the purchaser becomes the lawful owner of the property. The title deed reflecting his ownership will be released by the deeds office after the registration and will be handed to him by the conveyancer, unless a bond had been registered, in which case the title deed is retained by the bondholder.

How long does the process take?

Having read this pamphlet you will be aware that conveyancing is a complex field requiring extensive knowledge, skill and attention to detail on the part of the conveyancer.

In the usual conveyancing transaction there are a number of parties involved such as:

More often than not the following additional parties are also involved.

Very often there are whole chains of transactions linked up in this fashion.

The conveyancer has to complete the arrangements with all these parties. Because human beings and various institutions are involved in each instance, delays are possible at any stage of the transaction. The conveyancer (also being an attorney) knows exactly when and how to use legal methods to compel delaying parties to act more expeditiously.

It is important, therefore, that the purchaser should sign the documents and pay the required amounts as soon as the conveyancer calls on him or her to do so; this helps to ensure that there are no unnecessary delays.

The length of time it takes to get the transaction into the Deeds Office is dependent on the reaction time taken by each and every one of the mentioned parties. The usual time taken by the Deeds Office to inspect all the documents lodged by the different conveyancers for a specific transaction is seven working days.

On average, the time taken to register the transfer of property, where a bond is involved, will be two or three months from the date that the conveyancer is instructed.

Unforeseen difficulties such as the death of one of the parties, attachment of the property by a creditor of the seller and so forth may cause the period to be extended.

What recourse do I have if the conveyancer fails to do the job?

Conveyancers are subject to the disciplinary powers of the law society of the province in which they practice. Law societies will act in the interest of the public.

If someone believes that a conveyancer has not done his job properly, he may lodge a complaint with the relevant law society which will investigate the matter and, in appropriate cases, will discipline the conveyancer.

If the conveyancer has been negligent and the purchaser or the seller should suffer any loss thereby, they would have a claim against the conveyancer for the amount of the loss.

Why is a conveyancer necessary?

Most people are accustomed to doing much of their personal business without the need of a legal or other adviser. However, a great deal is at stake in the transfer of fixed property. It is generally the largest single asset that a person owns and the transaction for the purchase or sale of a fixed property is probably the most important contract undertaken by individuals.

The law therefore, provides that only qualified conveyancers may attend to the transfer of fixed property and related transactions. This is not only to give proper protection to the rights and interest of the public, but also to safeguard the integrity of the South African land registration system, which is universally regarded as one of the best in the world.

When all the checks have been made, all the procedures followed by the conveyancer and the property has been registered in the name of the purchaser, the purchaser can be assured that he or she has the best title to the property.

The term “conveyancing” describes the legal process whereby rights in fixed property are registered in the deeds office. These rights include ownership, mortgage, servitude, mineral rights and others. All these rights vest legally in a person only on registration.