Have you ever wondered about the nitty-gritty details of property transfers in South Africa? In this article we are going to be exploring the Intricacies of Property Transfer in South Africa: Steps, Timeframes, and Potential Delays.
Whether you’re a buyer, seller, or just a curious observer, understanding the process can help shed light on what can sometimes feel like a complex journey. In this guide, we’ll break down the steps, the typical timeframes each step involves, and common hurdles that might slow down the transfer process.
The Path to Property Transfer
Under normal circumstances, you might be looking at around three months for a property transfer to be completed in South Africa. That’s from the moment both parties agree to the deal until the property legally changes hands. As of 2023, we’ve successfully navigated past the massive Deeds Office backlogs and service disruptions that were a result of the pandemic.
However, there are still some legal intricacies that can sometimes lead to significant delays.
Now, let’s delve into the journey of a property transfer and understand why it takes the time it does.
Stage 1: Fresh Bond Application and Approval
Once the buyer and seller agree on the purchase, the buyer takes the first step by applying for a bank-approved bond. This process usually takes up to four weeks. A bond attorney then steps in to handle the paperwork required for the bond. It’s important to note that the buyer covers the associated costs.
Stage 2: Settlement of Existing Bond
The seller appoints a transferring attorney, who then requests the details of the existing bond cancellation from the bank. The seller is responsible for settling the remaining balance of the bond. At this point, the bank sends the original title deed to the bond-cancellation attorneys. It’s worth allowing more time here, as this stage often takes longer than the mandatory 90-day bond cancellation notice period.
Stage 3: Municipal Clearance
Both parties, the buyer, and the seller, sign the transfer documents. The local municipality evaluates the property’s rates and taxes, and any outstanding payments are handled by the seller. The municipality then issues a municipal clearance certificate. This stage generally takes about 15 working days.
Stage 4: Transfer Duty Payment
The transferring attorney takes care of paying the transfer duty to the South African Revenue Service on behalf of the buyer. This payment usually results in the issuance of a transfer duty receipt by SARS. This step tends to take around 20 working days.
Stage 5: Submission of Documents to the Deeds Office
At this stage, all the crucial documents—such as bond approval, cancellation records, compliance certificates, and receipts—are submitted to the Deeds Office. If everything is in order, the property’s ownership is officially transferred to the new owner. This process generally takes between eight to 10 days.
Navigating Common Delays
Of course, not every property transfer sails smoothly. Various factors can introduce delays into the process. For example, property transactions might depend on the successful sale of the buyer’s existing home, which itself takes an average of 67 days in the current market.
In cases of sectional title units, a crucial step involves obtaining a levy clearance certificate from the body corporate.
This can add up to 20 working days to the process.
Other frequent causes of delays include:
- A missing property title deed, which might take weeks to replace from the Deeds Office.
- Incomplete or incorrect Deed of Sale, which can be attributed to the seller, buyer, or real estate agent.
- Delays in the seller signing bond and transfer documents or providing necessary FICA documents to the attorneys.
- Financial challenges on the buyer’s end, who might underestimate expenses tied to the property transfer.
- Financial constraints faced by the seller, who needs to repay an outstanding bond and cover costs related to the property transition.
- The process of canceling an existing bond, which generally takes a minimum of three months.
So, there you have it – an insightful journey through the property transfer landscape in South Africa. Whether you’re a participant in this process or simply curious about the intricacies, this guide should give you a clearer picture of what to expect.
