The process of transferring property can be both onerous and costly, and many sellers – and buyers – are ill-prepared for this vast amount of paperwork. It is thus vitally important that before you sign that sales agreement you are aware of how the transfer process works as well as the implications this will have on your budget.
Once you are aware of how the procedure works, you will be able to ensure that you do your part to make the transfer as smooth and speedy as possible.
First and foremost, make sure you budget accordingly for the transfer costs. Many buyers make the mistake of assuming that the transfer costs need only be settled once the property’s transfer has been completed. The fact of the matter is that the transfer costs will often be payable weeks before the actual transfer takes place, and as such it is important that this is taken into consideration when planning your finances. Should you be late with paying the transfer costs the conveyancing attorney will most likely delay the transfer until you have paid the necessary fees. This can obviously slow the process down significantly. Buyers are also obligated to pay a transfer tax to the government. These taxes are calculated on a sliding scale for all properties that are sold for R600 000 or more.
One way that you could accelerate the transfer process is by ensuring that you obtain electrical, plumbing and borehole certificates along with any other compliance certificates that may be needed for your current property once the sale agreement has been signed. Make sure theelectrical compliance certificate in particular is up to date, as these are only valid for two years and an absence of a valid certificate may delay the transfer process considerably.
Another reason that a valid electrical certificate is a must-have is that should the buyer of your home be applying for financing through a bank, the financing is unlikely to be granted without the electrical compliance certificate.
Another major cause of delays is the acquisition of a rates clearance certificate from the local municipality or council. The rates clearance certificate states that the property’s rates are up to date, and often the municipality requires that you make up to 5 months’ advance rates payments in order to obtain the certificate. Without this certificate the transfer cannot be processed, so it is important you factor this, as well as the extra costs potentially incurred, into your planning.
Often-times buyers may make arrangements to move into the house they are buying while paying occupational rent to the seller in order to cover their bond costs. While this may be a temporary and beneficial solution, confusion may also arise from the situation. The seller may, for instance, be expected to rectify problems that escaped the buyer’s notice when initially viewing the property. While most contracts’ ‘voetstoots’ clauses will protect the seller in these situations, the buyer may end up delaying the transfer process. As such, it is important to arrange that the transfer and occupation dates are synchronized.