Purchaser's Costs: What you actually pay the Conveyancer to do
- Moegsiena Ishmail
- Jul 8, 2020
- 3 min read
What is a "conveyancer" and why do we need one?
A Conveyancer is an attorney who specialises in the "conveyance", if you will, or transfer of immovable/fixed property from one person to another. Records of property ownership is publicly available at the Office of the Registrar of Deeds and therefore, Conveyancers are held to a higher level of scrutiny in ensuring that the records of the Registrar of Deeds are correct. This is an extraordinary responsibility. The integrity of the property ownership system is dependent on the correct performance of the Conveyancer and Deeds Registry.
Conveyancing Fees
Conveyancing fees are paid by the buyer, and are the fees paid to conduct the conveyancing process. The Conveyancer's fees are paid over and above the purchase price. The Purchaser must ensure that they have sufficient funds to cover the conveyancer's fees at the time that they are shopping around for a property.
Conveyancing fees cover a range of professional services:
Ensuring that the Offer to Purchase complies with all the legal requirements for the sale of land in terms of the Alienation of Land Act. The Conveyancer will conduct various searches in the Deeds Office to verify ownership as well as party and property descriptions. The information gathered from these searches include: any existing mortgage bonds on the property, title deed numbers, ownership history, deeds office recorded property description and verification of marital status.
In the event that the property is bonded, the transfer attorney (conveyancer) will call on the seller for the bond account number to place the bond under cancellation. The bank will appoint a bond cancellation attorney from its panel. The transfer attorney (conveyancer) will then liaise with the bond cancellation attorney (also a conveyancer) and provide the necessary undertakings to ensure that the bond is cancelled when property ownership is transferred to the purchaser. The Seller pays the cancellation attorney's costs, as well as the bond cancellation figures (the amount owing to the bank under the bond).
Should the Agreement of Sale be subject to the purchaser obtaining a mortgage bond from the bank, the bank will again, once the bond is approved, appoint a firm from its panel to attend to the registration of the bond. The bond attorney (another conveyancer) will liaise with the bank and ensure that all the compliance relating to the mortgage bond documents are met as required by the bank. The transfer attorney will liaise with the bond attorney to ensure that the bank issues the guarantee for payment of the purchase price. The purchaser pays the bond attorneys costs. REMEMBER that bond registration costs are SEPARATE from transfer registration costs.
The transfer attorneys (conveyancer) also attends to the drafting of the new title deed which will become the original title deed on registration, power of attorney to pass transfer, and various affidavits and declarations by the seller and the buyer. We also apply to the Municipality for the rates clearance certificate and transfer duty receipt from SARS. The buyer pays transfer duty.
Attend to the Homeowners Association on behalf of the seller as well as the bod corporate for levy clearance. The Conveyancer also hold funds on behalf of the purchaser in trust and attends to the Deeds Office to execute the deeds and register the property into the name of the purchaser.
Conveyancing requires a lot of specialist knowledge and extraordinary accuracy. Conveyancers also deal with less straight forward transactions that include things like subdivisions and consolidations, partitions or sectional title development. Conveyancers therefore perform a vital function in the Conveyancing process, without whom transfer of ownership of immovable property would not be possible.
Who pays what?
The buyer
Transfer Attorney Fees (registration of transfer);
Bond Attorney Fees (registration of mortgage bond); and
Transfer Duty or VAT
The seller
Estate Agent's Commission;
Compliance Certificates - i.e. electrical installation, electric fencing, gas compliance, plumbing and infestation certificates;
Bond Cancellation Attorney Fees;
Bond Cancellation Figures owed to the bank;
Rates and Services paid 60 days in advance;
Certified copy of a misplaced title deed (if title deed was in Sellers possession and was misplaced);
Levy amounts to owing to Body Corporate and/or Homeowners Association
Always remember that Transfer Costs and Transfer Duty are two separate items which the buyer is responsible for. Transfer Duty is a tax levied by SARS whenever someone buys property.
Comments