MAIN IMAGE: Mike Spencer, former owner of Global Platinum; Minette du Preez of Green Attorneys, Notaries and Conveyancers
Danie Keet
Bulk property transfers, especially in the commercial real estate sector, is somewhat of an unknown option in comparison to normal transfers.
“Having been in the property industry since 1975, I thought that bulk transfers were quite common and understood by everyone. This seems not to be the case,” says Mike Spencer former owner of Global Platinum who now continues to work as residential and commercial sales manager of the company.
“Put very simply a bulk transfer is the transfer of property from one owner (the seller) to the new owner (the buyer). It is just multiple sales from the same seller to the same buyer.
“There are a few practical limitations. Being in one deeds office would be one and I would imagine a single town would be another. It is also not something that is done frequently but is not uncommon. For instance, we bought 250 sites in an insolvent estate and they were transferred as bulk,” he explained. A bulk transfer ca therefore consist of a transfer from an estate or insolvent estate or from a normal sale.
According to Spencer there are few limitations ion bulk transfers. These include that the transfers must take place at one time and in the same Deeds Office.
“The Deeds Office is fully equipped to assist with bulk transfers as it is quite common. With first transferers of property, the Deeds Office requests applications batched in the sum of 20 at a time, but for any transfers thereafter, there are no limitations on the size of the batches lodged,” said Minette du Preez of Green Attorneys, Notaries and Conveyancers of Bloemfontein.
Du Preez said the property type must be the same, i.e., either sectional title or full title, but not a mixture of both and therefore came from the same Municipality for the request of the clearance certificate.
Advantages of bulk transfers are varied. Firstly the cost of transfer is reduced. If two properties’ selling price is under R1 million, there is no transfer fees. If the total price exceeds R1 m, transfer duty is payable based on the total cost. But if the buyer and seller are registered for VAT there is no transfer duty payable because VAT is applicable.
One could transfer 20 properties and not be charged transfer duty. The cost of transfer for one offer at R20,000,000 is around R3,689,144 with transfer duty, but only R193,144 if both parties are registered for VAT. Zero rated separate R1 m offers would cost R24,809 each or R496,180 (No transfer duty on each individual sale – a saving of R303,036.
“Therefore, one SARS certificate will be applied for and once certificate will be lodged in the Deed Office. This automatically reduces the drafting costs and the properties can be transferred in one title deed that will be an added saving on expenses,” Du Preez emphasised.
“There is only one sales agreement instead of one per property to deal with. Similar savings are made by taking a single bond over all these properties. The total cost of a R20 million bond being R68,834 while 20 times R1,000,000 bonds would cost R296,180. Another saving of R227,346. The total saving to your client being R530,382,” Spencer explained.
