By Nicholas Harvey
What is a Conveyancer? Why do I need a Conveyancer? What does a Conveyancer do?
As a conveyancer, I hear these questions time and time again.
A conveyancer is an admitted attorney who passed a written examination and has been admitted to practice by the High Court of South Africa. Only a conveyancer may prepare and execute certain deeds and documents for registration in the deeds registry. A person cannot be admitted as a conveyancer unless they have been admitted to practice as an attorney.
A conveyancer specialises in the legal transfer of ownership of immovable property and the hypothecation of immovable property by means of mortgage bonds. They are an expert in the preparation of the deeds and documents required by law or custom, to affect such transfer or registration in the deeds registry.
In terms of the laws in South Africa, immovable property (vacant land, houses, flats, farms, buildings) can be privately owned. Thousands of property transactions take place in our country every day. People buy land to live on, to produce crops on, to conduct business on, or simply to keep as an investment. All dealings with ownership of land in South Africa are recorded in a public office known as the Deeds Office which keeps records and information about these individual pieces of land.
The Republic of South Africa’s land registration system is based on the Land Survey Act 8 of 1997 and the Deeds Registries Act (Act 47 of 1937) (the Act). The deeds registry, or Deeds Office (within its jurisdiction) records all immovable property transactions, the owner of a particular property, when it was acquired and how much was paid for it. There are eleven deeds registries in South Africa, which are situated in Bloemfontein, Cape Town, Johannesburg, Kimberly, King William’s Town, Nelspruit, Pietermaritzburg, Polokwane, Pretoria, Vryburg and Umtata.
What you can expect from a
The word ‘conveyancing’ is
used to describe the administrative and legal procedures necessary for transfer
ownership (and other rights) in immovable property from one person to another.
This system is dependent on
the integrity and the correct performance of the functions of conveyancers and
the staff of deeds registries. Section 15A(I) of the Act specifies the certain
deeds and documents which must be prepared and signed by a conveyancer. A
conveyancer accepts responsibility for the accuracy of certain facts in these
deeds or documents.
Conveyancers must have knowledge of the 390 pieces of legislation governing land registration including the common law and conference resolutions which date back as far as 1938. This includes all the relevant Chief Registrar’s Circulars.
In a typical registration and
transfer process, the attorney is involved with more than 50 activities,
involving up to 12 parties, before the transaction can be completed.
The conveyancer must deal with
all the parties involved and he assumes responsibility for the collection and
payment of all amounts due.
After an agreement of sale has been entered, a conveyancer is appointed, and instructions are sent to him by the estate agent or by the seller. These include the names of both the buyer and the seller, a copy of the agreement of sale, and the identity numbers and marital status of the buyer and seller.
The types of conveyancing
In a ‘typical’ sale such as a transfer that results from a sale that was brought about by the efforts of an estate agent, there are three conveyancing attorneys involved in the property buying and selling process:
They transfer the property from the seller to the buyer. They represent the seller and are appointed by the seller.
Registering (or Bond) Attorneys
They register the bond over the property in favour of the bank that is financing the purchase of the property. They represent the buyer and the bank granting the buyer’s home loan and they are appointed by the bank granting the buyer’s home loan.
They cancel the seller’s existing home loan on the property. They represent the bank cancelling the seller’s home loan and they are appointed by the bank cancelling the seller’s bond.
The conveyancer drafts the following documents for signature:
- A power of attorney to pass transfer – this must be signed by the seller as it allows the conveyancer to transfer the property on his or her behalf into the name of the purchaser.
- Affidavits and further documents – the buyer and seller must sign an affidavit in which they confirm their identity, marital status, solvency as well as a FICA affidavit.
- Transfer duty and value added tax (VAT) declaration – the buyer and seller must sign this to confirm the purchase price, which is conveyed to the South African Receiver of Revenue (SARS) for the calculation of transfer duty (normally paid by the vendor). VAT is applicable only if the seller is VAT-registered, in which case he or she must sign a VAT declaration. If VAT is payable, no transfer duty is payable.
- Mortgage (bond) documents – if a mortgage bond is being obtained by the purchaser from a financial institution, the lender will require the purchaser to submit their identity document, marriage certificate and/or ante nuptial contract in order for the banks appointed conveyancer to draw up the necessary documentation.
The conveyancer is responsible for:
- Contacting the seller’s existing mortgage bondholder to request the title deed and mortgage cancellation figures.
- Requesting written confirmation of the buyer’s mortgage from the relevant financial institution in the form of a guarantee.
- Requesting the seller to pay any outstanding taxes, utility bills or levies so that a clearance certificate can be obtained from the local municipality (or managing agent in the case of a sectional title scheme) and lodged at the Deeds Office.
- Receipting of guarantees – on receipt of the requested guarantees from the buyer’s financial institution, the contents must be properly checked to see if everything is correct. The original guarantee in favour of the existing bondholder (seller’s bank) must be forwarded to the bond holder’s attorneys (bond cancellation attorneys). The original guarantee for the balance of the purchase price will remain in the file of the transfer attorney.
- Drafting the transfer documents and the new title deed and forwarding a copy to the bond registration attorneys to enable them to draw up their bond documents accordingly, if any.
Once the above is in order, the buyer and seller must sign the transfer documents and the buyer must pay the transfer costs. SARS will issue a receipt for the transfer duty. The seller must consent to the cancellation of his mortgage bond (if applicable) and the new deed is lodged at the Deeds Office, where it is registered within 8 to 14 days. The seller’s mortgage bond is cancelled, and the balance paid to the seller, less the estate agents commission.
The Conveyancer should:
- Protect the interest of his clients and these interests should outweigh all other considerations except of course issues of legality.
- inform the seller and buyer of the conveyancing procedure and keep the seller informed of the progress of the transaction.
- advise the seller and buyer on the content of the ‘Offer to Purchase’, especially regarding suspensive conditions.
- Advise the seller on the cancellation of his bond, any penalties, notice periods and other administrative charges which may affect the settlement figure.
- Obtain the seller’s instruction before issuing any guarantees in respect of the transaction.
- Do everything in his power to register the transaction on or as close as possible to the date agreed to in the offer to purchase.
- Advise the seller and buyer on his obligations in terms of the offer to purchase, to ensure that the transfer is not delayed.
- Meet with the seller and buyer to explain, as well as sign the necessary documentation to conclude the transaction.
- Prepare the deeds for lodgement with care, to minimise the risk of rejection of the documentation by the Deeds Office.
- Inform the seller and buyer of the transfer on the day of registration.
- Account to the seller for finances relating to the transaction within 24 hours after registration.
Owning property can be an important investment. Our property registration system in South Africa is one of the most credible in the world and conveyancers are an important component in this process. Be sure to do your research before appointing a conveyancer.
About Nicholas Harvey:
Nicholas is a born and
bred Capetonian and property runs in his veins. A practicing
conveyancer, he has established himself as a well-known personality in the
legal and property industry.
Nicholas specialises in conveyancing and property law with a
specific focus on residential property transactions, mortgage bonds and
developments. He is particularly adept at feasibility research, contractual drafting,
and property related negotiations.
Source: Propertywheel.co.za | https://propertywheel.co.za/2020/07/the-importance-of-a-conveyancer-their-role-in-your-property-investment-journey/