Many in SA don't own homes they paid for
Thousands of people around South Africa may be living in houses they believe they have bought but, in fact, have no right to, regardless of having paid large sums of money for them, because they did not follow the correct procedure.

Bob Bertrand, conveyancing attorney with Bowman Gilfillan Attorneys, explained the process that must be followed by law in transactions involving immovable property.

To make the sale legal, a signed written agreement which sets out the important terms is needed. These terms include a description of the property, information about the seller and buyer, the purchase price, when it must be paid, the transfer registration date and when occupation will be given.

Once this binding agreement of sale has been signed by both parties the conveyancing attorney prepares the transfer documents which include the power of attorney to pass transfer, status affidavits, transfer duty declarations and the deed of transfer.

The attorney will also obtain rates clearance from the municipality and all rates and service bills will have to be paid up before the certificate is issued.

Transfer duty, or value added tax based on the purchase price of the property, has to be paid to the SA Revenue Service and a clearance certificate obtained. If transfer duty is due if could be anything upwards of R4 200 which is the amount payable on a R150 000 house.

If there is an existing bond on the house it has to be cancelled and will have to be paid up out of the proceeds of the sale on the day transfer is registered. Bond cancellation can cost the seller about R850.

The cost of registering a new bond is about R2 700 for R120 000.
Once all documents are ready and fees have been paid - transfer duty, conveyancer's fee and bond costs - the papers can be lodged in the Deeds Office for examination.

When they are in order, the full purchase price is paid, the transfer can be registered and the ownership of the house is passed to the buyer.

  • This article was originally published on page 2 of Sunday Argus on January 30, 2005
Article by: Myolisi Gophe - www.iol.co.za