The A-B-C of Property Transactions

Transfer of ownership of immovable property in South Africa has to be registered in the Deeds Office of the area in which a particular property is situated. The “guidelines” along which registration is to be effected by the transferring attorney/conveyancer, appointed by the seller, will to a large extent be contained in the Deed of Sale, i.e. the “Offer to Purchase” once it has been accepted in writing by the owner/seller.

It is of paramount importance that the Deed of Sale clearly and correctly reflects the parties’ true intentions, their rights and obligations, that any time frames are adequately described and that it complies with at least the basic principles of the law of contract.

In the coming months this column will be dealing bi-weekly with possible ways in which a Deed of Sale can be structured in order to ensure a streamlined and swift registration process. At the same time, it will be addressing important issues relating to the registration process that normally give rise to uncertainty and anxiety amongst contracting parties and/or their agents and in respect of which legal guidance is usually required.

These issues include, amongst others (but not limited to),

• the correct citation of the person/s or entity/ies (company, close corporation or trust) in whose name a property has to be registered;

• whether VAT or transfer duty will be payable;

• requirements for zero-rated VAT transactions;

• various types of suspensive conditions;

• the position of foreign sellers and buyers;

• calculation and payment of transfer costs (inclusive of transfer duty, if any);

• compliance with the Financial Intelligence Centre Act (“FICA”);

• issues relating to rates clearance certificates;

• the time duration of the registration process and ways in which delays can be curbed;

• simple steps that can be taken in order to expedite the entire process;

• the meaning and application of the so-called 72-hour clause;

• latent and patent defects and the effect, if any, of the Consumer Protection Act.

It is most certainly not the aim of the articles in this series to provide expert or specialized advice on complicated legal issues pertaining to property transactions. This is hardly the forum for that. Instead, every effort will be made to convey in simple terms what is generally required in order to register a transfer in the shortest possible time with the least amount of stress for the mutual benefit of each and every role player that is involved in the process, be it the seller, purchaser, estate agent, bond originator, financial institution, local authority, body corporate or attorney.