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Lease agreements: stamp duties / Property transfer and bond fees

URGENT!

Transfer process

When the Conveyancer receives the copy of the Agreement of Sale, the following is set in motion:
1.1 Assuming that there is a bond registered over the property, the conveyancer asks the Bondholder (usually a bank) in writing what amount is required to cancel the bond. This is referred to as the Cancellation figure. Simultaneously, the Bondholder is asked for the Title Deed. This is forwarded to the Bondholder’s attorney, and subsequently to the Seller’s Conveyancer.

1.2 At the same time, the Municipality (or Managing Agent in the case of a Sectional Title unit) is asked for a Rates Clearance certificate. This is a certificate usually valid for a period of three months and serves as proof that the Seller has met his obligations for rates and taxes, water and electricity. The seller has to pay his rates and taxes in advance for this period of 3 months. For an estimate of how much this will be, multiply the last statement received from the municipality by three. The purchaser is requested to contribute an amount which varies from area to area, and upon transfer, the seller is refunded pro rate.

1.3 Upon receipt of the Title Deed, the Conveyancer prepares the Transfer documents for signature by the parties, who are then requested to sign them. At this stage, the Seller will be asked to pay the Bondholder’s attorneys the Bond Cancellation fee.

1.3.1 Conveyancing fees are calculated according to a tariff determined by the Law Society. The Purchaser is usually liable for the transfer as well as the fees for bond registration.

1.4 Upon signature of the documents by the parties, the Conveyancer collects the transfer duty and fees from the Purchaser, pays the duty to the Receiver of Revenue and obtains a Transfer Duty receipt.

1.5 In most cases, the Purchaser will have applied for a bond. The Conveyancer contacts the bond registration attorneys immediately and furnishes them with the draft title deed.

1.6 The Conveyancer will then call for guarantees for the outstanding amount of the purchase price, depending on how the contract is structured. Assuming, for example, that the balance of the purchase price is covered by a bond obtained by the Purchaser, guarantees will only be received after the purchaser has signed the bond documentation with the bond registration attorneys and paid the costs.

1.7 After the documents have been signed, they are lodged at the Deeds Office. Lodgment is done in conjunction with the Bond Cancellation attorneys as well as the Bond Registration attorneys. From this point, transfer normally takes between ten to fourteen days (this depends on the Deeds Office and may vary).

1.8 The Conveyancer will then draw a final account and pay the Seller the proceeds of the sale as well as the balance of the pro rata rates and taxes. If necessary, payment will also be made to the Purchaser for any credit or interest that may have accrued to him from his deposit, and he will also pay the Estate Agent’s commission.

1.9 The following documents are usually required by the conveyancer:

From seller and buyer

1.9.1 Copies of Identity Documents, Antenuptial Contract, Marriage Certificate, Divorce Order (where applicable).

2.9.2 If the property is sold or bought by a:

1.9.3 Company – copies of the Memorandum and Articles of Association, Certificate of Incorporation, Certificate to Commence Business, copy of the first page of the authorized person’s Identity Book;

1.9.4 Close Corporation – a copy of the CC1 Founding Statement and/or the CC2, copy of the first page of the authorized person’s Identity Book

1.9.5 Trust – a copy of the Trust Deed, copy of Letters of Authority issued to Trustee/s, copy of the first page of the authorized person’s Identity Book.

1.10 From seller

1.10.1 Name of Bondholder (s) (i.e. Bank, Branch and Account number).

1.11 Ideally the agent should advise the purchaser what the costs of transfer and bond registration are likely to be so as to prevent delays.