The Sellers Right to Nominate the Transferring Attorney

1. THE SELLER’S EXCLUSIVE RIGHT TO NOMINATE THE TRANSFERRING ATTORNEY

1.1 Once a property owner has accepted an offer for the purchase of his property whereby a deed of sale has come into operation (provided the transaction is not subject to fulfillment of a suspensive condition), the agent will ask the owner (now referred to as the seller) to nominate the transferring attorney. It is important to note that it is the prerogative of the seller to nominate the transferring attorney although the purchaser is liable for payment of the transfer costs which includes the fee of the transferring attorney. Sellers are often requested to allow the purchaser’s attorney or an attorney that is clearly being promoted by the agent to attend to the registration of transfer. However, as will be seen later in this article, to accede to such a request may ultimately be regretted.

1.2 If a seller does not regularly engage the services of an attorney and he is therefore referred to one, for example, by the estate agent who had procured the sale, care should be taken that the deed of sale clearly states that the appointed attorney will be attending to the transfer on behalf of the seller.

2. THE DANGERS OF USING THE PURCHASER OR AGENT’S ATTORNEY TO ATTEND TO YOUR TRANSFER

2.1       If the purchaser’s attorney is appointed to register the transfer and the purchaser, for example, fails to, among others:

2.1.1 pay the deposit;

2.1.2 furnish the transferring attorney with the required FICA documentation;

2.1.3 sign the transfer or bond documents and/or pay the transfer and/or bond costs;

2.1.4 secure or pay the purchase price / furnish guarantees for payment thereof;

2.1.5 pay occupational interest;

2.1.6 comply with any other obligation in terms of the deed of sale;
who will enforce the seller’s rights in terms of the deed of sale? Most certainly not the purchaser’s attorney!

2.2       Similarly, if a particular transferring attorney or law firm is clearly being promoted by the agent who introduced the seller’s property to a purchaser, and a dispute arises between the seller and the agent (which does happen from time to time) do you honestly believe that the said attorney or firm will act against the agent that is promoting its services?

2.3       The dismal end-result is that the seller then needs to instruct his attorney or an attorney of his choice for assistance, who in the first place should have been instructed to attend to the transfer and to enforce the seller’s rights as contained in the deed of sale when required.

3. USE YOUR OWN ATTORNEY OR AT LEAST A LOCAL ATTORNEY OR LAW FIRM OF YOUR CHOICE

3.1       There are well-established law firms in Hermanus comprising reputable attorneys, many of whom with many years of extensive experience in property transfers and related matters. Therefore, when an estate agent recommends a transferring attorney from say Cape Town, Somerset West or surrounds instead of one from a local law firm, it might be prudent to enquire as to the reason for that. In many instances it will appear that such an agent may be acting under instructions from his/her principal to “support” attorneys from elsewhere which in some cases may entail sellers being encouraged, influenced and/or persuaded to nominate such attorneys in direct conflict with the current Code of Conduct of the Estate Agency Affairs Board (EAAB). Before simply accepting an estate agent’s recommendation of an attorney 100 or more kilometers away a seller should perhaps enquire as to such agent’s reason/s for deliberately overlooking equally (if not better) equipped local attorneys.

3.2       Considering the number of calls that transferring attorneys generally receive from concerned parties regarding the progress with registering a transfer, it is quite clear that a swiftly concluded transfer is of the utmost importance. This is particularly true as far as the seller and the estate agent are concerned as they both have considerable financial interests in a speedy conclusion of the transaction.

3.3       A deed of sale should always comprehensively describe a purchaser’s obligations towards the seller and clearly state the sanctions for non-compliance as it is the only way to ensure a swift transaction.

3.4       The obvious person equipped to enforce the seller’s rights in terms of the deed of sale is a transferring attorney of the seller’s choice and who throughout the process acts in the best interest of the latter.

3.5       It is therefore not advisable to name the transferring attorney promoted by an agent in the deed of sale but rather to stipulate that the “seller’s attorney” is to effect transfer. If a seller becomes disillusioned with the services rendered by the promoted attorney (which should not be the case if the seller has nominated his preferred attorney), nothing will prevent the seller from terminating the attorney’s mandate and appointing a different attorney to attend to the transfer and to protect the seller’s interests. If the transferring attorney’s name is inserted in the deed of sale, it becomes part of the agreement between the parties, rendering it incapable of being deviated from unless agreed to in writing by the purchaser.

(This article is merely a general information sheet and should not be used or relied on as legal or other professional advice. No liability is accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information contained herein. Always contact your legal advisor for specific detailed advice or contact us for further assistance.)