Types of property transfers: the basics you need to know

Whether it’s through a sale, inheritance or divorce settlement, there are a number of reasons for a property to be transferred from one owner to another. Each scenario is dealt with in slightly different ways, and our experienced team of conveyancing attorneys have put together a brief guide to help you understand the basics of each property transfer type.

January 31, 2020

What are the different kinds of property transfers?

Conventional & Sectional Title (through a property sale): A property transfer based on a sale will be determined by the terms of the offer to purchase. However, when it comes to property sales, there are two options depending on the kind of property being sold. A conventional property transfer takes place where a buyer purchases a freehold property from a willing seller, while a sectional title transfer takes place when a buyer purchases a sectional title unit (e.g. an apartment or a house within a complex).

Divorce: In the case of a divorce, the final divorce order and settlement agreement will determine whether a property will be transferred from one spouse to another (whether conventional or sectional title). The transfer that takes place will also depend on whether the parties were married in or out of community of property as this will determine how property is to be divided between the spouses.  

Deceased Estate: Property may also be transferred to the heirs of a deceased person based on the terms of the individual’s will or the terms of the Intestate Successions Act if the individual did not have a valid will. Such a transfer can only be initiated once the Liquidation and Distribution Account has laid open for 21 days and the Master of the High Court has confirmed that no objections have been lodged. As with a transfer based on divorce, the transfer may be either a conventional or sectional title transfer, depending on the type of property being transferred.

What is the conveyancing attorney’s role in each property transfer?

Conventional Transfers: Once the offer to purchase has been signed by both the buyer and the seller, it will be sent to the conveyancing attorneys who will review the document, taking note of all terms and suspensive conditions stipulated in the agreement. Based on this, the conveyancing attorneys will draft the transfer documents to be signed by both parties to the agreement. The transfer attorneys are also responsible for applying for settlement figures from the seller’s bank and requesting guarantees from the purchaser’s appointed bond attorneys, as well as applying for rates clearance figures from the local municipality and homeowners levy clearance figures (where relevant). These figures will have to be paid by the seller in order for the clearance certificates to be issued. In addition, the transfer attorneys will apply for the transfer duty receipt from SARS (payable by the purchaser) and will collect all necessary compliance certificates to be supplied by the seller. Once all the above has been done, the transfer attorneys will lodge the transfer at the Deeds Office. The transfer attorneys will also liaise with the appointed bond attorneys in order for the bond cancellation and bond registration documents to be lodged at the Deeds Office simultaneously with the transfer documents. On registration, the conveyancing attorneys will attend to the final payments according to the bond settlement.

Sectional Title: A sectional title transfer is much the same as a conventional transfer. However, in addition to the elements mentioned above, the transfer attorneys will also need to apply for levy settlement figures from the body corporate. These costs are payable by the seller in order for the levy clearance certificate to be issued. While drafting the transfer documents, the transfer attorneys will also investigate whether there are any exclusive use rights (such as a garage, storeroom or garden) registered against the property which would need to be included in the transfer.  

Divorce: The divorce order and settlement agreement will stipulate to which spouse the property (conventional or sectional title) has been awarded. The settlement agreement will also stipulate who will be liable for the settlement of the mortgage bond if applicable as well as the rates and levies. The conveyancing attorneys will manage the cancellation and registration of bonds where relevant as well as drafting and lodging the necessary transfer documents with the Deeds Office. Unlike other transfers, divorce transfers are exempt from transfer duty, therefore instead of obtaining the transfer duty figures and arranging payment, the transfer attorneys will obtain a transfer duty exemption certificate from SARS. The parties to the transfer will also have to obtain two independent signed estate agent valuations to indicate the fair value of the property for SARS purposes, and these valuations will need to be provided to the transfer attorneys.

Deceased Estate: The estate administrator will appoint the transfer attorneys once the Liquidation and Distribution account has been approved by the Master of the High Court and once it has remained open for 21 days for inspection with no objection. The transfer attorneys will then proceed with drafting the transfer documents and will apply for a transfer duty exemption certificate as the transfer is exempt from transfer duty. The transfer attorneys will also apply for the bond settlement figures, rates clearance figures and any levy clearance figures where relevant and request the executor of the estate to effect payment unless alternative arrangements have been made with the heirs.

What support can you expect from your conveyancing attorneys?

Regardless of the type of property transfer, it can be an overwhelming experience which is why enlisting the services of an experienced team of conveyancing attorneys is so important.

For example, the Snymans team can help guide you through the process and offer sellers assistance when it comes to applying for bridging finance to make paying the necessary costs for rates, levy and compliance certificates more manageable.

If a seller is in need of assistance to close rates and taxes accounts (or a buyer needs assistance in opening these accounts after registration) or to apply for a refund after registration, our team can offer recommendations on reputable and experienced consultants to assist.

Throughout the transfer, the conveyancing attorneys attending to your matter will provide regular updates so that all parties to the matter are up to date and aware of key milestones and expected deadlines.

As a property law firm which specialises in day-to-day conveyancing, we are able to provide expert advice to our clients in respect of questions they may have relating to the specific transfer.

Written by Wessel de Kock

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