Residential

The transfer and registration process during lockdown restrictions

Home loans

While the Deeds Office may operate during lock down level 4, the transfer and registration process will look a bit different under the current restrictions.

Once a buyer is ready to purchase after only viewing the home online (which is what current restrictions allow), the buyer will need to sign an offer to purchase (OTP). If the buyer is purchasing the property with aid of a bond, then a bond attorney will need to be appointed.

Once the buyer has been approved for the home loan, the seller’s real estate agent usually sends the signed sale agreement to the transferring attorney. But, since digital signatures are not yet accepted under South African law, real estate agents will need to courier the hard copies of the contracts to the various parties to be signed. If contracts are emailed, signed, scanned and returned, it is usually agreed that the hard copies will be signed again in person once lock down restrictions allow for this,” explains Adrian Goslett, RE/MAX of Southern Africa Regional Director & CEO.

Concurrently, the bond financer will appoint the buyers bond attorney, who will contact the buyer once they have received the instruction to attend to the registration of the bond. At this point in the process, the bond attorney will need to courier the bond registrations documents to the buyer to be signed. They will also provide the buyer with a statement of accounts for the registration of the bond. The buyer must also be aware of the transfer costs and transfer duty, which are payable to SARS over and above the purchase price (visit the SARS website to find a full breakdown of these costs).

The transferring attorney will also need to request a Rates Clearance Certificate, which is proof that all the outstanding debt on the property’s rates and taxes has been paid, from the local authority. “This is where the process gets a bit tricky, especially for those who had sales in the pipeline before the lock down started. The seller usually pays a few months rates in advance to ensure the there are no outstanding municipal amounts outstanding by the time the new owner takes possession of the home. For this reason, the Rates Clearance Certificate is only valid for 60 days. But, with lock down restrictions, it might not be possible for seller to move within the 60 days of this certificate being issued. This might cause some delays in the transfer and registration process,” Goslett cautions.  

Once the above steps have been completed, the seller’s existing bond will need to be cancelled. The attorney will need to contact the seller’s bank and request the original title deed and cancellation figures. The cancellation attorney will then acquire the title deed so that the next step in the transfer process can take place.

Under normal circumstances, the buyer and seller would then both be required to meet the transfer attorney to sign their respective transfer documents. During these meetings, participants usually bring the necessary FICA compliant documentation to the consultation, including proof of address (not older than three months), original identity document, income tax number and marriage certificate if applicable. “Under the current restrictions, all this will have to be done via courier or over email and through other digital communications,” says Goslett.    

Once all the paperwork is signed and payments have been made, the cancellation, transfer and bond attorney work together to ensure that all the documents are lodged simultaneously at the Deeds Office. This process usually takes ten to fifteen working days. Once registered, the buyer will finally be the owner of the home and the seller will be paid the net proceeds.

There are many moving parts in the transfer and registration process – all of which will need to innovate to ensure the completion of a sale under current lock down restrictions. This process also highlights how far-reaching an impact real estate services has on multiple other industries. Real estate services are the enabling function that allows sales to reach the point where registration can take place. Once it reaches this stage, a whole host of subsidiary services can begin their function, from transferring attorneys to bond financers and municipal clerks. If real estate services are not allowed to re-open at level 4, the knock-on effect will be detrimental to our economy,” Goslett concludes.