South African Property and
Conveyancing Process Information
Bond Cancellation Notice and Penalties
Sellers must provide 90 days’ notice to their financial institution if they intend to cancel their mortgage bond.
The early termination penalty is typically equal to 90 days’ interest (excluding capital) calculated daily.
If notice is given late (e.g., after 60 days), only the remaining days’ interest penalty applies.
After 90 days’ notice, no penalty applies. It is crucial for sellers to inform their bank via phone, email, or fax to minimize penalties.
Registration Process and Timelines
We recommend proceeding with property registration without delay to reduce risk for sellers. A conventional transfer generally takes between two and three months from the signing of the Offer to Purchase, but this period may vary depending on transaction conditions.
The transferring attorney acts on behalf of the seller but also has a duty of fairness to the purchaser.
Once registration is complete, the proceeds of the sale are typically paid within 48 hours.
Compliance Certificates Requirements
Compliance Certificates must be obtained promptly after signing the sale agreement.
They may be required by bond registration attorneys to satisfy bank requirements before lodging registration documents. These certificates include:
Electrical Compliance Certificate (ECC): Issued by a licensed electrician, valid for two years unless alterations are made.
Electric Fence System Certificate of Compliance (EFSCOC): Required if there is an electric fence, issued by a licensed installer.
Certificate of Conformity for Gas Appliances (COCGA): Required if gas appliances are installed, issued by a licensed gas installer.
Plumbing Certificate of Compliance: Currently required only in Cape Town.
Pest or Borer Beetle Certificate: Required in KwaZulu-Natal, Eastern Cape, and Western Cape, issued by a registered entomologist.
Rates and Levy Clearance Certificates
A Rates Clearance Certificate confirms that the seller’s municipal accounts are up to date and usually requires payment of rates and utilities for 4 months in advance.
Validity is generally 60 days. For sectional title properties, a Levy Clearance Certificate is required, certifying that Body Corporate levies are fully paid.
This certificate must also be valid at the time of transfer.
If recent payments have been made to the municipality, proof of payment is required to reconcile clearance figures.
Refunds due from rates or levies after registration are calculated pro-rata and paid by the municipality to the transferring attorneys.
This process may take 4 to 6 weeks following registration.
Utility Account Transfers
If electricity is supplied by Eskom, sellers must contact Eskom to close their account, and purchasers must open a new account in their name.
For council-provided electricity (e.g., City of Johannesburg, City of Ekurhuleni), sellers and purchasers can manage account openings and closures independently or use conveyancer services at a nominal fee.
Transfer Document Process
‘Lodgement’ occurs when transfer documents are submitted to the Deeds Office for examination.
If no issues are raised, documents move to the ‘On Prep’ stage, allowing registration within 5 days.
Once ‘put forward’ for registration, it is typically registered the next day after final Deeds Office checks.
If any errors (rejections) arise during examination, documents must be corrected and resubmitted.
Bond Cancellation and Withdrawal Restrictions
If a bond exists on the property, it must be formally cancelled at the Deeds Office through an application by the bondholder.
This process usually costs between R4000 and R5000.
Sellers cannot withdraw additional funds from the bond account after cancellation figures have been requested to keep penalties accurate.
Purchaser and Seller Fees
Purchasers are liable for conveyancing fees based on a sliding scale tied to the purchase price and bond amount, as recommended by the Legal Practise Council.
Property Professional commissions are paid by the seller on registration and are typically earned upon signing the sale agreement or upon conditions being fulfilled.
Occupation and Rental After Sale
If the seller remains in the property post-registration or the purchaser occupies before registration, the occupying party must pay occupational rental to the registered owner.
This rental excludes utilities and is agreed between parties and reflected in the Offer to Purchase.
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Kerry Wood conveyancers
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Gauteng South Africa
0685323 504