reason, many Agreements of Sale contain an occupation date. From this date the purchaser pays the seller an agreed monthly occupational interest until registration of transfer. Should transfer take place during the month, occupational interest will be charged on a pro rata basis.
Where the Agreement of Sale specifies possession rather than occupation before registration of transfer, the purchaser must insure the property from the date of possession, as possession involves the passing of risk. Most insurances are linked to the registration of a bond. For this reason, possession usually passes on registration of transfer.
What Does the Transfer Process Entail?
Once the transferring attorney has been nominated( usually by the seller), the attorney will:
1
Communicate in writing with both the seller and the purchaser and confirm in writing to the agent that they have been instructed to effect transfer.
2
Request FICA documents from both parties( copies of identity documents, marriage certificates and antenuptial contracts, where applicable, proof of address, tax numbers, VAT numbers( if relevant) and, where transfer is being given or taken by a legal entity, the relevant documentation and resolutions of that entity).
3
Request the title deed to the property from the seller or from the existing bond holder, if the property is bonded. The attorney will instruct the bond holder to cancel the bond as soon as possible after receiving the transfer instruction, as most banks require sufficient notice of an intention to cancel a bond. Failure to do so can result in the bank charging the seller a penalty for early cancellation.
4
Conduct a Deeds Office search to ensure there are no interdicts or attachments on the property. The transfer documents can then be drawn and the parties can sign the requisite documents.
5
Write to the local authority to assess outstanding rates on the property and obtain a Rates Clearance Certificate, which will be lodged with the transfer documentation in the Deeds Office. The rates year runs from 1 July to 30 June of each year and the attorney will collect pro rata rates from both the seller and the purchaser. The purchaser is ordinarily obliged to pay the rates three months in advance from the anticipated date of occupation / transfer.
6
Collect transfer duty from the purchaser, which will be paid over to SARS. The transfer duty receipt must be lodged with the transfer documents.
7
Ensure all transfer documents are correctly drafted and ready for lodgement at the Deeds Office, and where there is a linked transaction( i. e. the cancellation of the seller’ s bond, the registration of the purchaser’ s bond, or a linked transfer), ensure all linked parties lodge their documents at the same time, so transfer can take place simultaneously.
8
If the transfer is a sectional title transfer, liaise with the body corporate or homeowners’ association to obtain a levy clearance certificate and a consent to transfer( if the title deed contains a restriction against transfer without the prior written consent of the body corporate or homeowners’ association).
SA Real Estate Investor Magazine MAY 2021 23