What you should know!
Quick Facts About Conveyancing
'Conveyancing' describes the legal process by which 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
once registration has taken place. The registration process, therefore places an official 'seal' on a person's rights in fixed property.
A conveyancing transaction insofar as it relates to a transfer of property involves a chain of steps which begins with the deed of sale and which
continues through to the registration of ownership in the deeds office and the reconciliation of finances and payments upon completion.
'Fixed Property' is any land whether it is unimproved or improved by the addition for example, of a house, farm or sectional title unit. It is more properly
referred to as 'immoveable property'.
'Conveyancer' is an attorney who has in addition to qualifying as an attorney completed a special further qualifying examination and been accepted by the High Court to practise as a conveyancer. Only such persons may practise as and be called 'conveyancer'. They will often be assisted by a 'conveyancing paralegal', a legal assistant who is not a qualified conveyancer but who is nevertheless skilled in conveyancing procedures.
Who appoints the conveyancer?
Throughout South Africa the usual practice is for the seller (not the estate agents or the purchaser) to appoint a conveyancer for a property sale 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 an attorney or conveyancer to advise him or her independently but those conveyancer's or attorneys fees will be the responsibility of the purchaser over and above the conveyancing costs submitted by the seller's conveyancer, who will usually be doing the actual transfer.
Why is a conveyancer necessary?
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 property protection to the rights and interests 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.
So when all the checks have been made, all the procedures followed by the conveyancer and the property has been registered in the deeds office in
the name of the purchaser, the purchaser can be assured that he or she has the best possible title to the property.
What recourse do you 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/her job properly, he/she 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 as a result of such negligence, they may have a claim against the conveyancer for the amount of the loss.
The Conveyancing Process
Upon the Conveyancer receiving a signed Deed of Sale (sale agreement), the Conveyancer will commence the process necessary and look to complete the process of transfer and registration according to the contemplated time frames within the contract document. This is a complex process and normally takes between 6 to 10 weeks to complete.
It starts with the Conveyancer seeking to obtain the existing title deed from the Seller or from the bank if the Seller has an existing mortgage over the property. There are also Deeds Office searches to be completed to check for any impediments to registration of the new title. Once any suspensive conditions of the contract have been fulfilled (for example, 'subject to a mortgage') a set of transfer documents is then prepared by the Conveyancer and involves, amongst other things, signature by the parties. Principally the documents consist of a Power of Attorney to Pass Transfer (in which the Seller appoints the Conveyancer to register transfer of the property), mortgage bond documents, transfer duty documents for the Receiver of Revenue and so forth. Local Authority rates must be paid to obtain a Rates Clearance Certificate, Body Corporate levies paid for sectional title units and a transfer duty paid and a receipt or exemption must be obtained.
All of this is a time consuming process, but once completed and all the documentation is in order and, where required, has been signed, the Conveyancer then lodges the documents in the relevant Deeds Office (normally via a lodging attorney/agent in that area).
If there are linked transactions, such as purchase funds needing to come from the Purchaser's linked sale or the Seller simultaneously buying into a new property and mortgage bonds also needing to be registered and/or cancelled where applicable - all of these transactions need to be linked up in the relevant Deeds Office via the different Conveyancers/agents instructed in each transaction and registered simultaneously.
The Deeds Office
The Deeds Office is the public office which records all property ownership and property transactions involving sale, mortgage and so forth. There are different Deeds Offices for different regions. The Deeds Office for KwaZulu-Natal is in Pietermaritzburg. The process of registration involves deeds officials checking all of the documents once lodged and linking up simultaneous transactions. If queries are raised, the Conveyancer needs to deal with the queries and this can sometimes involve amendment to or supplementing the documents already lodged. This is an examination process of the lodged documents. Once the examiners are satisfied with the documents and the matter is ready for registration, registration fees are then paid to the Deeds Office and the Conveyancer's agent then appears before the Registrar of Deeds and registers the transaction/s. Once registration is complete, the Conveyancer accounts to all parties involved and in the case of sale, pays out the net proceeds to the Seller. In the Deeds Office the documents are numbered, checked and microfilmed and the new Title Deed reflecting the new ownership is, after some weeks, sent out to the Conveyancer, who will either forward it to the new owner or retain it on the owner's behalf or, if a mortgage loan is involved, send it to the mortgage lender/bank for retention in security.
Conveyancer's Fee
The Conveyancer's fee is based on guidelines prescribed by the Law Society. It provides for a sliding scale based on the purchase price in respect of transfers and based on the mortgage amount in respect of mortgage loans. The Conveyancer's fee excludes disbursements which are required to be made in connection with the transaction, including, for example, electricity clearance and borer or beetle certificate fees, registration dues and so forth, and of course also excluding any rates and taxes and transfer duty payable. Rates and taxes: A transfer cannot be completed without a Rates Clearance Certificate issued by the Local Authority. All Municipal rates and taxes as well as arrear service charges need to be paid in order to obtain the Rates Clearance Certificate. A Purchaser must therefore budget to pay such rates and taxes prior to the transfer. In addition, in most instances, transfer duty must also be paid. An estimate of the Conveyancer's fee and rates and taxes and so forth is provided by the Conveyancer at the commencement of the process in a 'Pro Forma Account', which is a provisional account only because unanticipated costs may arise in the process and it is only on completion of the process that a final and definitive account can be prepared. The parties should ensure that their account details in respect of utility and other service charges applicable to the property are changed from date of registration of transfer or when the Purchaser takes occupation of the property.
The aforegoing is intended to be a guide only, applicable to usual circumstances. Your particular transaction may vary. If in doubt at any stage of your transaction with us, please do not hesitate to contact us.
MCGLASHAN McKEOWN INC
Attorneys, Notaries, Conveyancers, Administrators of Estates.