The time periods involved in any property transfer is of utmost importance and interest to all parties concerned. Interest payments, rates, levies, municipal accounts and maintenance costs continue to be incurred until those obligations are transferred to a new owner.

It’s a question that is posed by every client, and the answer is dependent on a number of factors.

To understand how long any transfer should take, one has to firstly look at the type of transaction that is being dealt with and secondly, the number of parties to the transaction. We break up transactions into 4 categories:

Cash sale of a freehold property

Sale of a freehold property using bank finance

Cash sale of a property which is encumbered by a mortgage bond

Sale of a property which is encumbered by a mortgage bond using bank finance

The cash sale of a freehold property:

This transfer requires no other attorney firm to be involved in the transaction, with the transferring attorney solely attending to the transfer, from beginning to end. Rates clearances figures are obtained on average within 5 to 10 working days, and once paid, a further 5 days to issue a rates clearance certificate. These time periods fluctuate depending on the workload of the municipality, the speed of the handler who is attending to the matter on behalf of the municipality, as well as the status of the municipal server.

The cash sale transaction can therefore be lodged upon receipt of the rates clearance certificate, which is between 3 to 4 weeks of receiving the instruction. All other aspects of the transfer can be completed within this time period.

Sale of a freehold property using bank finance:

When a home loan is used to finance the purchase price or balance of the purchase price, a further attorney is involved in the transaction, who will attend to the registration of a first mortgage bond over the property. The transfer speed in this case is dependent on when the bond registration attorney delivers the required guarantees to the transferring attorney. Only once guarantees are received can the purchase price be deemed to be secured.

When a bond is to be registered, the non-payment of the bond registration attorney’s fee could see delays in the delivery of the guarantee. It is thus very important to ensure that Purchasers are aware of their fee obligation, as well as attendance to signature of their documents.

Cash sale of a property which is encumbered by a mortgage bond

When a bond exists on the property that is being transferred, a further attorney is involved in the process, who will attend to the cancellation of the bond. Normally this will not affect transfer speeds, unless there is a delay in obtaining the original Title Deed.

It is important to note that only once the client complies with FICA, signs their refund form, and attends to the payment of the bond cancellation attorneys fee, will a “proceed” be obtained from the bank. The “proceed” is an instruction from the bank to literally proceed with the lodgement and cancellation of the existing bond.

A further important aspect is that the purchase price must be paid in full to enable the registration attorney to issue a “guarantee” to the cancellation attorney.

Sale of a property which is encumbered by a mortgage bond using bank finance

This type of transfer requires 3 attorneys to simultaneously deal with the transfer, namely a transferring attorney, a bond registration attorney, and a bond cancellation attorney.

Transfer speeds are entirely dependent on all parties ensuring that their files are ready for lodgement, and the aspects covered above relate.

For every new party involved in the transaction, the time period to get to lodgement is increased. These parties need to get their files in order and various original documents need to be exchanged. Failures by any party to attend to their responsibilities do hamper transfer speed, purely because each additional party to the transaction needs to deliver certain documents and attend to the lodgement of their documents. Only once all parties are ready, can the transfer be lodged.

Once lodged, the deeds office may take 5 to 7 working days to inspect the transfer documents, and a further 2 days to register the transfer.

Other factors that delay transfers:

Outstanding fees

The most common reason for delays is the failure of Purchasers to pay their required transfer fees and bond registration fees, as well as Sellers failing to pay their bond cancellation fee on time. Only when fees are paid in full or arrangements made for payment thereof, can the transfer be lodged.

Rates payments

A rates clearance certificate is mandatory. This certificate may only be issued upon receipt of the municipality of full payment of its clearance figures. Any delay by the Seller to make payment of these amounts, have a resultant effect of delaying the acquisition of the rates clearance certificate which results in a delay of transfer.

Transfer duty

Should any party to the transaction fail to furnish their tax numbers, or any other required information, then a transfer duty receipt cannot be obtained. This is amplified when the parties have not met their tax obligations. SARS has strict requirements that need to be followed. In addition to the above, failure of the Purchaser to make payment of transfer duty (in property transfers over R750 000-00) will cause delays.

Electrical compliance and entomology reports

These are basic reports that need to be in place for any transfer. Failures to attend to these reports timeously affects transfer times. It must be noted that these are legal requirements, as well as requirements of the financial institutions. Once obtained a certified copy of the reports needs to be delivered to the bond registration attorney. Delivery depends on the province in which the attorney is based, with a minimum 2 day delivery time period for local deliveries, and a 5 day delivery time period inter-province.

Signature of documents

Another factor which may cause delays is the failure of the Purchaser and Seller to attend to the signature of their transfer documents.

This also applies to the signature of bond registration documents and refund forms for bond cancellation.

Delivery of guarantees

Guarantees secure the purchase price and/or cancellation figures in situations where bonds are being registered or cancelled. Any delay in the delivery of these guarantees severely impact the transfer time. It is important to note that most bond registration attorneys will not deliver any guarantees until such time as their fee is settled in full by the Purchaser.

Title conditions

Title conditions are also a factor to be considered. Whenever a restriction is contained in the Title Deed, this restriction has to be dealt with. In most cases a consent to the transfer is required by the party in whose favour the restriction is registered in favour of. Examples of these are consents by the local municipality, especially for low cost developments or pre-emptive rights contained in the conditions of title. Transfer speeds are in these matters dependent on the time it takes the holder thereof to furnish the consent.

These factors are some of the issues experienced with transfers, and transfer speeds are dependent on these individual matters being attended to timeously. Each individual factor serves an important part of the registration of the transfer.

To ensure that the transfer times are reduced, it is important to ensure that you attend to your your financial and legal obligations.

At Sibran & Sibran, we provide constant updates and feedback, allowing all parties to track and follow the status of the transfer, and each party is made aware of any delays, and who is responsible for that delay.