Legal Property FAQ

Organic Growth's  legal property expert Gerhard Faurie from Faurie Nell Inc has provided some commonly asked legal property questions and answers.

Any other questions you may want answered  can be addressed to us here

If I buy property, in whose name will it be registered?

If you are unmarried or married out of community of property, then the property can be registered in your name only, if you have so indicated on the agreement of sale;
If you are married in community of property, the property will be registered in your name as well as in the name of your spouse;
If you are married and the marriage is governed by the laws of another country, then the documents will indicate that and your spouse will have to assist you in signing the mortgage bond documents;
Remember to communicate your intention clearly to the estate agent and to the bank.

What is a mortgage bond?

This is the term used for the loan granted by the bank to finance your property, and it is registered over your property to secure the bank's interest.

Are there costs involved in obtaining a bond?

Initiation fee to the bank for facilitating the administration;
Bond registration fee to the attorney;
Lodgement fee to the Deeds Office;
Sundry search, FICA compliance and electronic document generation charges.

Are there costs involved in the transfer of the new property into the name of the purchaser?

Transfer registration fee to the transferring attorney;
Transfer duty to the Receiver of Revenue;
Lodgement fee to the Deeds Office;
Sundry search, FICA compliance and electronic document generation charges;
Provision for rates & taxes payable to the City Council (not applicable to City of Johannesburg); Separate deposit to the City Council to connect water and electricity / services..

Are there costs involved in the cancellation of an existing bond?

The seller will pay a bond cancellation fee to the bond cancellation attorney;
Deeds Office lodgement fee in respect of every bond

Why does it take so long to have a property registered in the name of the new owner?

In a transaction where property is sold from A to B and A has an existing bond, there are 3 separate transactions which must be lodged simultaneously, namely:
* Cancellation of existing bond registered ifo the seller's financial institution;
* Transfer from seller to purchaser;
* Bond in favour of buyer's financial institution;
Sometimes these transactions are handled by 3 firms of attorneys who have to liaise with each other, the banks and the clients;
Transfer of ownership is a complicated transaction and needs to be attended to with great diligence and care, and it cannot be rushed into. The performance time periods in the agreement of sale entered into between the Seller and Purchaser influences the period it will take to conclude the process. Where an agreement is subject to a Purchaser selling his / her property, the latter mentioned transaction will need to precede the subject to transaction.

What can I do to expedite the transfer procedure?

If you are a purchaser, pay your costs to the transfer attorney and bond attorney on demand;
Apply for your loan at a financial institution without delay and ensure that you provide them with all the information they require;
When your attorney contacts you to arrange an appointment to have the documents signed, do not delay it, sign as soon as you possibly can;
Provide both the transfer attorney and bond attorney with copies of your personal documents, such as:
* Identity documents
* Antenuptial contract (if applicable)
* Marriage certificate
* Divorce order (if applicable)
Also provide the attorneys with all personal documents they require iro to the Financial Intelligence Centre Act as soon as they require it;
A seller, on the other hand, must ensure that he maintains his bond payments to his financial institution throughout the duration of the transaction, as it will cause a delay if the bond is not paid up to date.

Sellers should also provide the transferring attorney with his / her bond account number at the outset to enable the attorney to apply for cancellation figures as early as possible.

What is a "subject to" transaction?

This is a term used when a purchaser bought a new property from a seller but the purchaser must still sell his own property.

The new agreement will then be made subject to the purchaser selling his property. If the purchaser's property is not sold within a written specified time, then there is no contract between the seller and purchaser.

How do I handle a dispute in the transaction?

Notify your attorney who will give you the best advice, but be careful not to breach any of the terms of the contract. Do not hold back costs, occupational rent or for that matter refrain from signing the documents as you can be placed on terms. Disputes are handled separately from the transfer procedure.

What qualifies as a "cash" transaction?

If you have the purchase price available immediately, then it is a cash transaction.

When does the seller's liability end and the purchaser's commence?

On date of registration when the property is officially transferred into the name of the purchaser, it becomes the purchaser's sole liability, unless the contract states otherwise. From this date, the purchaser's insurance will have to be in place.

The seller must ensure that his debit order in respect of insurance is cancelled.

Note: Great care has been taken to ensure the accuracy of this information, but Faurie Nell Inc and Organic Growth, their members, employees and representatives cannot be held liable for any loss suffered, as a result of the use of this information.