You’ve found the house of your dreams, the one where you can picture your family growing old in and you’ve signed the offer to purchase which was accepted by the seller – now what?
According to Craig Hutchison, CEO of Engel & Völkers Southern Africa, there are still a number of administrative factors that need to be put in order and processed.
“The first step is to ensure that the house is transferred to you,” he said.
“The transfer attorneys receive the signed offer to purchase contract. They do a deed search, open a file and send letters to the parties involved.
“It is up to the transfer attorneys to ensure that all the paperwork is in order.”
Below Hutchison outlined the other documents you will need when moving in.
A deed or title deed
The title deed is a document that states that you are the legal owner of a property in South Africa. As proof that you own the property, the title deed needs to be transferred into your name.
The document acts as proof of ownership in terms of the Deeds Registries Act, and every property is required to have its own deed.
The document contains important information about the property including size, description and selling price, Hutchison said.
For a transfer of property to take place, a Municipal Clearance Certificate for Rates and Taxes as well as for Water and Lights is also required.
Without a municipal clearance certificate, the Deeds Office won’t proceed with the transfer, Hutchison pointed out.
The certificate proves that all rates and taxes, as well as Water and Lights on the property, have been paid up to date.
Because the transfer of property can take a few months, the seller is obliged to pay four to five months of rates in order for the certificate to be issued, said Hutchinson.
“It is a good idea for the buyer and the seller to meet at the property to do a reading of the Water and Lights meters on the date of transfer so that everyone is on the same page and there are no surprises when the statement arrives,” Hutchison said.
“It is also the duty of the transfer attorneys to have various other certificates available for the buyer, including a certificate of alarm if the property has an alarm and an electricity compliance certificate as well as a gas compliance certificate if the house uses gas.
“These are for the home buyer’s peace of mind and are not necessary for acquiring a Municipal Clearance Certificate,” he said.
Bond application and approval
“For many individuals, part of the process of becoming a homeowner is applying for a bond and having the bond application approved,” said Hutchinson.
“The bank requires information on you, the applicant, as well as the property. They also need to see the offer to purchase.
“They may send someone to do a valuation on the property, depending on what percentage of the price the buyer is applying for. Both the buyer and the property are analysed and qualified before a bond is issued.”
Hutchinson said that the transfer attorneys then communicate with the bank’s attorneys with regards to various other documentation required in this application process.
“It is interesting to note that the bond registration will appear on the title deed and the bank keeps the original title deed document; while the owner receives a copy,” he said.
“Once there are guarantees from the bond approver, these are sent to the cancellation attorneys of the present bond holders.
“Cancellation attorneys send this to the financial institution for approval of cancellation.
“The financial institution signs and returns to cancellation attorneys. They then confirm that they are ready to lodge and organize with bond and transfer attorneys for lodgment at the Deeds Office.”
Once new ownership has been lodged at the Deeds Office, the seller moves out the house so that the new owners can move in and take occupation.
The owner waits to receive the title deed from the Deeds Office.
“The Title Deed and Bond Act are then sent to the applicable parties,” said Hutchinson.
“Taxes are finalized and there is an acknowledgement of receipt of the document from the relevant parties.”