Why does the transfer process take so long

It is generally accepted that the transfer of immovable property can take anything between one month and three months. Some transfers may take even longer. Why is that?

The transfer of any particular property may involve as many as 17 role players, the most important of which are (although not limited to) the transferring attorney (“the attorney”), the estate agent, the seller, the purchaser, the existing mortgage bond holder (bank), the attorney cancelling the existing mortgage bond, the bond originator, the bank granting a mortgage bond to the purchaser, the attorney registering the mortgage bond, the local authority, the home owners’ association/body corporate, the electrical inspector, the beetle inspector, the person inspecting the gas installation, the bridging finance company, SARS and the Deeds Office.

Among those mentioned, the purchaser is actually the only one that has to provide his/her/its continuous co-operation throughout the entire process. It is therefore no surprise that the purchaser, should it ultimately appear to be his/her/its intention, finds himself in the ideal position to manipulate the time duration of the transfer process to the detriment of the seller, as well as one or more of the other role players referred to above.

Normally the purchaser has to:

• furnish the attorney with the required FICA documentation;
• complete, sign and return to the attorney an “Authority to Invest” form in the event that a deposit is payable;
• pay the deposit, if any, into the trust account of the attorney;
• ensure that the application for a mortgage bond, if any, is applied for and approved in time;
• sign (and return) the transfer documents to the attorney;
• pay the transfer costs into the trust account of the attorney;
• sign the mortgage bond registration documents;
• more often than not comply with additional documentary requirements of the bank that has approved the mortgage bond;
• pay the mortgage bond registration costs to the attorney attending to such registration;
• pay/guarantee payment of the balance of the purchase price to the attorney.

These are all straightforward actions and obligations, one would say. A valid inference, but unfortunately in practice it is not that simple. The reality is that quite a number of purchasers, whether intentionally or not, delay transactions in some way or the other. The transferring attorney then has to perform an almost impossible balancing act between, on the one hand, the seller and the estate agent involved who eagerly require the proceeds of the sale and, on the other hand, the purchaser who is less eager, for example, to attend to a required payment, be it the deposit, the transfer costs, the mortgage bond registration costs or the balance of the purchase price.

It is therefore somewhat peculiar that the pre-printed “Offer to Purchase” forms that are used by many, fail to adequately provide for swift action by the transferring attorney in the event of a purchaser being in breach of contract. For example, with advanced technology at everyone’s disposal nowadays, there is hardly any justification for contracts to still provide for delivery of notices in terms of such contract by registered mail.

In the vast majority of property transactions in our area, the purchaser presents an “Offer to Purchase” to the estate agent by e-mail who, in turn, forwards the offer to the seller by e-mail, the acceptance of which is similarly advised by e-mail, the deposit is paid electronically, guarantees are furnished electronically and the bank’s final grant is e-mailed to the purchaser. However, in the event of the purchaser’s breach and in order to enforce the terms of the accepted “Offer to Purchase”, it is expected of the seller to have a formal notice delivered to the physical address of the purchaser by registered mail allowing four days for delivery and anything between seven to fourteen days within which to remedy the breach. Does that make any sense? Why not simply provide for all communications and notices of a formal nature to be delivered by e-mail?

Failure by a purchaser to perform any one of the actions listed above, can delay the transfer process for almost three weeks. Imagine the time implications where a purchaser consecutively fails to perform one or more of the actions listed above and the seller repeatedly has to deliver formal notices by registered mail to the purchaser’s residential or other chosen physical address.

The process for obtaining a replacement copy of a lost title deed has been changed since 1 January 2020. A seller now has to publish a notice of his/her/its intention to apply for a replacement copy of the title deed in a local newspaper. Once the notice has been published, the public is granted fourteen days within which to object to the issue of a replacement copy. Upon expiry of the fourteen-day period, provided no objections have been raised and confirmation thereof submitted to the Deeds Office, the replacement copy of the title deed will be issued.

There are of course other factors that can also delay the process, for example, the municipality running behind schedule with the issue of rates clearance certificates (which these days with the technology at hand does not often happen), the existing mortgage bond holder (bank) having mislaid the existing title deed entailing the procedure above in applying for a replacement copy or the seller failing to settle any arrear rates and taxes, outstanding income tax, an unsafe electrical installation and/or the presence of beetles in the timber of the property. However, these factors are by far in the minority.

Therefore, in order to prevent unnecessary delays during the transfer process, it is important that an Offer to Purchase is carefully drafted and that the parties’ respective rights and obligations, as well as the sanctions in the event of breach by either party, are clearly stipulated.