Agents have a role to play in preventing deed registration delays

Cobus Odendaal

MAIN IMAGE: Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty

Senior writer

Some years ago, South Africa’s Deeds Offices were highly criticised for being slow to transfer properties. Agencies in response, cited to buyers that it would take up to three months for their transfer to take place. The Deeds Offices have turned this around, and now indicate that it should take no more than 3 weeks maximum to process the documents … that is if all documents are in order.

Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg, reminds us that property transactions are known to be a protracted process with multiple steps and reams of documentation, often exacerbated by the potential minefield of suspensive conditions and contractual obligations. “Only once the deal is finally concluded and signed on the dotted line do people breathe a sigh of relief. However, the deal isn’t done until the transfer has actually happened, and the anticipated downhill cruise to transfer can still become an uphill battle if one isn’t careful.”

There are, essentially, two primary types of delays, Odendaal says. “The first relates to the confirmation of the sale, and the second, delays that occur once the sale has been confirmed and, in many instances, both can be avoided by doing one’s homework and having all one’s ducks in a row from the onset.”

These delays play out in many ways, but one of the main reasons is that the timeline is out of sync, especially when two or more deals are linked, and money from one sale is needed to purchase the next property. “Buyers are also not budgeting for the transfer costs of the new property they are buying, or they have an access bond in place on their current home, and when the attorney calls for bond cancellation, that bond account will be frozen, and they will not be able to access the funds,” says Odendaal. “The required 90 days notice of cancelling of the existing bond can also cause delays as well as avoidable late cancellation fees.”

Odendaal highlights that the most common delays occur during bond approval, bond cancellation, signing of transfer documents, obtaining valid compliance certificates, issues encountered at lodgements requiring the removal of notes by the Registrar of Deeds, and unusual, more complex transfers such as those related to estates that require an endorsement of the Master of the High Court.

Denese Zaslansky, CEO of First Realty, steps in, adding that some prospective sellers find that their bond, which was registered when they bought the property (or if they took a second bond or loan against the property), is higher than the ultimate price that the current market/buyer would pay. 

“In this instance, the agent must tell the seller that the bank will not cancel his/her bond as an outstanding amount would remain if he/she were to accept the offer,” advises Zaslansky.  “If the seller has no option but to sell and owe the bank, the seller must try and make an arrangement with the bondholder/bank to repay the balance owing over a period of time. This is usually done by way of an Acknowledgement of Debt over a certain time period.  This can be a lengthy process, however, and any professional agent would not market the property until an agreement is reached between the seller and the bank.

“In the instance where an agent markets the property without having confirmation that the bank will accept reduced repayment of the bond, the buyer could be prejudiced as the transfer will not take place.”

Much of this can be avoided, as Giel Viljoen, principal property practitioner with Leapfrog Stellenbosch, points out. “It is very important for a trusted property advisor to complete the Offer to Purchase correctly, especially with regards to deposits and bond approval dates, registration and occupation dates, fixtures and fittings, extra conditions and the completed condition report between the parties in the offer.

“The Offer to Purchase clarifies everything pertaining to the transaction, and if done correctly, most things fall in place,” says Viljoen.  “The whole process needs to be driven by the agent, starting from bank valuations where the agent needs to meet the different bank valuators at the property, arrange COCs, and also meet and help with the appointments, opening up, etc. This also includes helping the purchaser with documents for the bond application via the bond originator; working together is key.”

Zaslansky says that agents must take all timelines into consideration, to the extent of asking buyers if they are able to fulfil their obligations, which includes payment of deposits on time, encouraging buyers to accept the Approval in Principle timorously, meeting with attorney’s and signing documents, compliance certificates, and so on, inclusive of enquiring about marital and foreign residence status.

“It’s quite a list, but unnecessary delays can be avoided if the agent ensures all required information and documentation is in place, upfront, which will allow conveyancers to attend to due process to effect a smooth transfer and restoration of the property,” she says.

“There is no such thing as a perfect easy registration as we are dealing with people with emotions,” Viljoen points out. “Education and clear communication play a big role, which is why agents must guide the seller and purchaser throughout the process. While emails do help with communications, making a call to clarify obstacles is what excellent agents do. They get things done quicker this way, ensuring no misunderstandings, and, with frequent updates, anxieties will be reduced, as will delays.”

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