Court rules that conveyancer was negligent | Legal Articles

 

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Court rules that conveyancer was negligent

Conveyancer responsible for delays in property transfer

Selling a house at times could have various complications that could prevent the process from being completed timeously. 

Delays Conveyancer Negligent

A situation that could give rise to such an issue is when the seller has a bond registered over the property in question and the purchaser also intends on having a bond registered over the property.

Usually the transfer of immovable property is driven by the conveyancing attorney or transferring attorney of the person selling their property. 

In order to do this, the transferring attorney needs to contact the local authority in order to acquire the necessary rates and tax certificates. 

Transferring attorneys

If the property has a bond registered over it then the transferring attorney would also need to liaise with the relevant financial institute to obtain consent for the sale as well as meet the requirements given by the institution in order to obtain the consent. 

Cancellation of existing bond(s)

A firm of attorneys who are appointed by the financial institution will then attend to the cancellation of the bond which makes up the second set of attorneys involved in the transaction. 

A third set of attorneys will be involved in the transaction from the purchasers side. 

The property that the purchaser intends on buying will need to be mortgaged to provide security for the loan that was provided by his/her financial institution so as to finance the purchase price of the property. 

Registration of new bond

This financial institution will also appoint a relevant firm of attorneys in order to attend to the registration of the bond that comes into effect on the date of transfer of the property.

The three transactions which take place at the Deeds Office are then carried out simultaneously with the conveyancing attorney sometimes acting as a representative for more than one party. 

However, it is more common for there separate attorneys to be involved. 

The person selling their immovable property usually wants this process to be completed quickly so that they are able to get their money and use it for other ventures. 

In reality, the situation never plays out as intended and often times various issues arise which cause delays. 

These delays could arise from hold ups because of the municipality taking their time to issue the rates clearance certificates. 

Another cause for delays could be from the transferring attorney whom you appoint to handle the transfer. 

In the case of Margalit v Standard Bank of SA Ltd in 3 December 2012, Mr Margalit sold his property to a third party for an agreed to amount. 

It is important to note that his property had two mortgage bonds registered over it at the time in favour of Standard Bank (first defendants) - the first being registered on 2 July 1989 and the second being registered on 5 June 1991. 

An amount needed to be secured by the financial institution that was providing the purchaser with the loan to guarantee the payment of the money outstanding on the existing mortgage. 

Only with this secured amount could the purchasers bank obtain consent from Standard Bank to cancel the two existing mortgage bonds. 

The transfer process was met with delays which Mr Margalit accredited to the attorneys (second defendants) that Standard Bank had appointed to cancel the existing bonds. 

Following the instructions given by Mr Margalit, the transferring attorneys attending to the transfer of his property contacted Standard Bank in order to acquire the figures and requirements necessary for cancellation. 

These were given and all seemed well however, Standard Bank never checked thoroughly as they would have seen that two bonds were registered over the property. 

Thus they went on to prepare the documents as if it was just one bond being cancelled. 

The original title deed which was being held as security by Standard Bank had been lost at the time and so the conveyancing attorneys needed to apply to the Deeds Registrar so as to obtain a replacement. 

This was all done while Standard Bank were under the impression that only one mortgage bond needed to be cancelled.

As a result of this, the lodged documents were rejected and the transfer could not go through. 

Had everything been in order then their would have been no complications and the both parties would have accomplished what they set out to do during the agreement of sale. 

This would have taken place no later than 29 May 2008. The documents then had to be resubmitted again on 13 June 2008 and again rejected. 

Finally, Standard Bank’s bonds were cancelled and the transfer of the property could be finalised on 16 July 2008.

Conveyancing attorneys liable

Mr Margalit argued in court that the delays were as a result of negligence on the part of Standard Banks conveyancing attorneys. Because they never noticed at the start that the property had two bonds over it where both needed to be cancelled, the documents were rejected. 

Conveyancers are only human at the end of the day and are afforded allowances for things that were overlooked. 

However, conveyancers have to take the utmost care when preparing their documents as negligence on their part could result in the financial loss of clients and in turn make them liable for the damages suffered. 

If it can be proven that they were negligent in their dealings and that they did not demonstrate the level of skill and care expected of a reasonable conveyancer then they will be held accountable.

The second bond was overlooked although Standard Bank’s attorneys were in possession of a copy of the title deed showing number of bonds registered over the property. 

However, it was clear from the copy of the deed of transfer that two mortgage bonds had to be cancelled yet the attorneys failed to do so. 

The Court found that Standard Bank’s attorneys did not exercise relevant care and ruled that the delay which came about due to the documents being rejected on both 22 May 2008 and on 13 June 2008 was as a result of negligence on their part. 

Thus, Mr Margalit won the case and was entitled to recompense for the amounts he had claimed.

This case highlights the importance for an individual to confront those who are given responsibility and ensure that they are always kept on their toes. 

For professionals, the need for the utmost care to be taken in their dealings is emphasised. 

Should such a professional fail to do so, they could end up having to deal with serious claims or even being held financially liable for an error. 

Van Deventers & Van Deventers Incorporated - conveyancing attorneys Sandton

Contact us for efficient conveyancing services
 

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