How to Avoid Delays with Property Transfers

The point of sale is always the high water mark for both buyer and seller, whether or not the property has been sold privately, or through an estate agent. It then takes a period of approximately two to three months to register transfer after the date of sale and the approval of a loan.

There may be unforeseen delays with the registration of transfer into the new owner’s name, even in what may appear to be a straightforward sale of a property. The following guidelines may assist buyers and sellers to expedite transfer.

PENALTY INTEREST ON EXISTING BONDS

Often banks have a clause in their bond documents which requires their client (being the seller when the property is placed back on the market to sell) to give them 90 days notice of their intention to cancel the existing bond. If transfer takes place prior to the expiry of this period, the seller would remain liable for interest for the full 90 day period on their bond, from the date that the bank received notice, regardless of the fact that transfer takes place at an earlier date.

Sellers are advised to check with their banks whether or not they are required to give notice, and if so, sellers should arrange with their banks to give notice prior to the actual sale of the property. The buyer might insist on transfer before the expiry of the 90 day period, and the seller would end up having to pay penalty interest.

INFORMATION ON SALE AGREEMENTS MUST BE ACCURATE

The parties and the property must be accurately described, and the manner of payment must be clearly set out in the sale agreement. In some instances however, a spouse may have passed away, or the parties may have got divorced and the title deed does not necessarily reflect this. If a sale agreement is signed by only one party, where for example the other party has passed away, apart from the inevitable delays with transfer in a deceased estate, the sale agreement may also not be valid.

Make sure that the information relating to ownership of a property is up to date and accurate, before a sale agreement is concluded.

UNPAID TAXES

SARS will not issue a Conveyancer with a transfer duty receipt unless both the buyer and the seller’s tax affairs are up to date. Before you put your property on the market to be sold, make sure your tax affairs are up to date to avoid any delays. Ensure that your sale agreement contains a clause whereby both buyer and seller are under an obligation to ensure that their tax affairs are up to date if not before the sale, then as quickly as possible thereafter.

UNPAID RATES AND THE ISSUE OF RATES CLEARANCE CERTIFICATES

Sectional title units are now separately rated, and over and above a levy clearance certificate, we are also required to furnish the Deeds Office with a rates clearance certificate in order to transfer a sectional title property. If rates are in arrears, the local authority would usually accept an undertaking from the Conveyancers to pay the arrears on transfer of the property. However, in some instances there might not be sufficient funds available to do so. It will expedite a sale if all rates and levies are up to date prior to the sale.

On transfer, the new owner will have the comfort of knowing that there are no encumbrances over the property from the previous owner such as unpaid rates or water and electricity, and that the existing bond has been settled and cancelled.

Karien Hunter is a respected property lawyer, and the founder of AMC Hunter Inc.