Debtors are usually required to provide security for repaying amounts owed to creditors before the creditor loans them money.
This can come in the form of personal security where another individual offers himself as surety for the repayment of your debt should you not make the payment yourself.
If you, the debtor, do not pay, then the surety will have to pay in your behalf.
Another common form of security is real security wherein the Mortgagor (the person/s or company who borrows money) offers their immovable property to the Mortgagee (the individual or financial institution who lends the money) to secure the repayment of debt.
In such cases the bank who usually functions as the Mortgagee will register a mortgage bond over the immovable property so as to ensure that the Mortgagor meets their obligations.
When a Mortgagor borrows money from a Mortgagee, he or she will have a mortgage bond over an immovable property which will serve as a form of security for repaying back amounts owed.
A mortgage bond can be registered over all forms of property whether or not the property has been improved so long as it is registrable in a Deeds Office.
Should the Mortgagor fail to meet his or her obligations in terms of paying the monthly installments, then the Mortgagee can enforce their rights.
In doing so the Mortgagee will be able to obtain a Court Order which will allow for the selling of the immovable property once the Mortgagor has been duly informed.
It is worth noting that the bank can’t sell the property immediately as a result of the Mortgagor not making a monthly installment.
In the mortgage bond there is usually provision made for an additional sum aside from the amount which is borrowed.
This amount covers the ancillary expenses which the Mortgagor will have to own the immovable property.
Such expenses include, insurance, maintenance costs, the legal costs in order to pursue the claim and arrear interest.
Should the Mortgagor foreclose on the bond, then this additional sum will cover all the abovementioned expenses.
The attorney will receive instructions (usually electronically) from the bank to register the bond.
Preparing the necessary documentation is an important step and due diligence will be needed to ensure that you have all the relevant information needed to proceed to the next step.
Request a flysheet from the transferring attorney if a transfer is involved.
Also, obtain guarantees for the requirements and relevant FICA documents.
The deeds office printout will need to be obtained and you will have to make sure that there are no issues with your property that could affect the registration of the bond.
If a further bond is to be registered then you will need to obtain the title deed and then prepare the bond documents to be signed.
Once you have the the necessary documents they will need to be signed and the payment of costs will also need to be arranged.
Once signed the transferring attorney will be advised by the bond attorney of this fact. If you are requested you will have to send guarantees or otherwise advise on the amount which is available under the bond.
After this you will advise on the state of the lodgement and if something is preventing the lodgement from taking place, then the transferring attorney will need to be alerted of the reason for this.
Proceed with lodgement in the event of a further bond being registered otherwise, if a transfer is involved, lodge the documents when the transferring attorney asks you to.
It will take 7-10 days for the Deeds Office to examine the deeds after which they will be prepared for registration.
The bond and all the other transactions which are linked with the agreement will be registered at the Deeds Office.
After this, you and your bank will be informed of the registration from the bond attorney who will then arrange with the bank to pay the bond proceeds.
The Deeds Office will then deliver the bond documents to the bond attorney, and if necessary he/she will also obtain the title deed from the transferring attorney.
Once this has been done the bond and other security documents will be delivered to the bank. But, the title deed will be delivered to the purchaser if there was no bond involved.
We are happy to assist you with the registration of mortgage bonds. Please contact us.
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