While buying a home can be one of the most exciting things anyone can do, it can also be one of the most stressful and overwhelming undertakings of your life. This is especially true for first time buyers, and even more so given South Africa’s current economic climate.
The country and its people, business owners, and working force are still swimming in the wake of the COVID pandemic which flipped our lives upside down, forced businesses to close their doors, and caused thousands of people to lose their jobs.
However, there are still many people who are in the fortunate position to buy a home, whether it’s their first one or not and talking about the struggles that one might face during the buying/selling process is still relevant.
Therefore, in this two-part series, we talk about what can cause a delay in the transfer of the property you are trying to buy or sell.
Due to the number of legalities involved with buying and selling property in South Africa, the process of transferring property from one owner to another can be extremely lengthy. Buyers and sellers often become frustrated with delays because they are not aware of how intricate the process is.
It’s practically impossible to say exactly how long a property transfer takes as it depends on several factors.
The first step to buying or selling property is to sign the Deed of Sale which commonly sets the tone for the rest of the transaction. This is especially true when there are two or more transactions linked to the primary transaction. When one transaction is delayed for some reason, then all following transactions will also be delayed. Many transactions depend on the success of one or several steps preceding it, making the transfer of property a delicate process which requires careful coordination and full cooperation from all the parties involved.
In cases where the Deed of Sale has not been fully or accurately completed, serious delays in the transfer can be expected. Incomplete or inaccurate Deeds of Sale can be due to the fault of the buyer, seller, or real estate agent. It’s important to remember that the Deed of Sale is an essential component of the bond application process, and a bond cannot be obtained without it. If the bond application is rejected due to incomplete or inaccurate Deed of Sale, it will become necessary to amend the document accordingly and prepare it for reapplication. Having a property law attorney present from the start can help you avoid these hurdles.
Another cause for delay is when the buyer or seller fails to provide the necessary personal information or FICA documents to the bond and transferring attorneys. In addition, when either party fails to sign the relevant bond and transfer documents as requested by their attorneys, further delays can be expected.
Lastly, the seller is required to provide the transferring attorney with the original title deed of the property being sold. This is applicable unless the property is bonded (purchased with the help of getting a bond from a bank). If this is the case, then the title deed is usually kept safely by the bondholder. In cases where the original title deed has been lost or destroyed, a duplicate must be obtained from the Deeds Office – a process which can take up to three weeks.
The seamless transfer of property depends largely on cashflow and shortage of liquid capital can be a significant hindrance to a quick, smooth transfer. Buyers are not always aware of the additional costs, over and above the actual purchase price, that come with buying a house and they are often financially unprepared for them. In addition, the seller might also experience cashflow issues, especially when the selling price is not enough to settle an outstanding bond.
Serious delays can be caused when the buyer fails to pay the required deposit amount or is unsuccessful in obtaining bond approval. However, one of the more common problems is that the buyer doesn’t have the necessary funds readily available to pay for the bond registration and transfer costs, resulting in further delays.
A Transfer Duty receipt is needed for the conveyancer to lodge a transaction for registration. Therefore, the buyer is required to pay the transfer costs to the conveyancing attorneys so that they can pay the necessary Transfer Duty. Once this payment is made, the Transfer Duty receipt can be issued.
On the other hand, the seller must cancel their existing bond by giving the bondholder a notice of at least 90 days. A 3-month delay can be expected in this case.
Delays in the transfer of property can be extremely frustrating. However, having one of our conveyancing attorneys by your side will help you get through the process as quickly and smoothly as possible.
In our next article, we share more reasons why you may experience a delay in the transfer of property you are selling or buying.
For more information about our conveyancing services in Cape Town and Johannesburg, please don’t hesitate to contact us.
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