Conveyancing: frequently asked questions
What is the 90 day penalty / early termination charge on a mortgage bond?
Sellers need to give 90 days’ notice to the financial institution if they intend to cancel their bond. The penalty, or early termination charge, is usually equal to 90 days’ interest (not capital) and is calculated daily. This means that if the bond is cancelled after 60 days’ notice, only 30 days’ penalty interest will be charged. The early termination penalty will not be applicable should the bond be cancelled once the 90 days has lapsed. The seller must inform the relevant bank through calling, emailing or faxing the bank, or their private banker, of their intention to cancel the bond in order to reduce the penalty payable.
Is it worth waiting out the 90 day penalty period by the bank or should we rather register asap?
We suggest that registration be achieved without delay in order to reduce any further risk for the Seller.
By when do you need the Compliance Certificates?
The Compliance Certificates (Electric Compliance, Electric Fence System Compliance and/or Gas Compliance Certificate) should be attended to as soon as possible after signature of the sale agreement. Should your purchaser be financing the purchase price of the property by means of a mortgage bond, the bond registration attorneys may require the Compliance Certificates to submit to the bank prior to the matter being lodged.
I just paid my rates account – can you obtain new Rates Clearance Figures from the council so that I don’t have to pay double for the current month?
There is no need to obtain new Clearance Figures from the council if you recently paid your latest account from the council. We will however, need the Proof of Payment to the of your latest account payment to determine whether the latest statement amount was included in the Rates Clearance Figures. If this is the case, then you will only need to pay the difference between the Rates Clearance Figures amount and the most recent amount paid.
What happens to the Electricity Account after Registration?
If Electricity is provided by Eskom, the seller must call Eskom’s call centre to close the account. In addition to this, the purchaser must call the call centre to open the electricity account in their own name. If Electricity is provided by the Council, such as the City of Johannesburg or the City of Ekurhuleni, the sellers and purchasers can utilise our services, at an extra nominal fee, to have the council accounts closed and opened. If sellers or purchasers have opted to close and open these accounts on their own, without utilising our services, they will be provided with the necessary documents to assist with this process.
When will my first Bond Instalment go off?
The general rule is that the first debit order will be processed on the next date as chosen by you on your Debit Order Instruction.
What does ‘Lodgement’, ‘On Prep’ and ‘Registration’ in the Deeds Office mean?
‘Lodgement’ is when the Transfer Documents are handed in to the relevant Deeds Office for examination. Provided that no queries or notes are raised during examination, the documents will be returned to us to prepare for registration (known as ‘On Prep’).Once the matter is ‘On Prep’, the documents would have been successfully examined and the relevant Deeds Office will permit registration. The matter must be registered within 5 days.Once the matter is ‘On Prep’ and we are ready to register, the matter is ‘put forward’ for registration. The matter will be ready to register the day after being ‘put forward’ (the deeds office needs a day to attend to final data checks).Registration is the final step in the Transfer Process and confirms that the change of ownership has now been officially recorded in the Deeds Office.
Who does the Transferring Attorney act for?
The Transferring Attorney is appointed by, and acts for, the seller however, he/she also owes a duty of good faith to the purchaser.
When is my transfer going to register?
A conventional transfer takes approximately two to three months to register from date of signature of the Offer to Purchase. Each transaction is unique as there are variable conditions and timeframes agreed to between the parties, which makes an accurate prediction of the date challenging.
When will I receive the proceeds from the sale?
The proceeds of the sale are paid as soon as possible after registration, generally within 48 hours.
Why is the estate agent commission more than I thought it was?
The additional amount is, more than likely, VAT on the commission amount which may have been excluded.
When is the Pro Forma Account payable by?
The proforma account must be paid prior to signature of the transfer documents. A delay in the payment could prejudice the speed of the transfer.
The Rates Amount is very high. What will my refund be on my Rates Payment?
The Rates Clearance Figures are issued with the current outstanding balance as at date of issue, together with a 4-month forward projection of rates and utilities. The amount to be refunded will be calculated on a pro-rata basis, based on when the transfer registers. The Council calculates this after registration and pays the refund to the Transferring Attorneys.
When will my rates account be opened? My property was registered a week ago.
The Council has to audit the accounts on registration of the transfer, as well as record the change of ownership of the property on their system. This process takes at least 4 – 6 weeks after transfer. Utility accounts must still be opened by the Purchaser.
What will my refund from the bank be once my bond is cancelled?
The bank will calculate the refund on date of registration. The Transferring Attorneys have no involvement in the calculation of the refund. We suggest you call your bank to receive clarification if required.
What is the Pro-Rata Levy Figure amount on my account for?
The pro-rata levy figure on your account is an estimation of levies payable to the managing agents on your behalf. We request levy figures on receipt of the matter and they are usually valid for a 3 month period, in order to cover the transfer period. Should the matter register before the date of expiry of the figures, we do a pro-rata apportionment between the seller and purchaser for the levies.
What does it mean that my bond account will be frozen?
If you have a bond over the property that you are selling, which entitles you to access any additional funds from the bond account, you will be unable to withdraw money from the bond account once we have requested cancellation figures. This is to ensure that the cancellation figures issued by the bank remain accurate.
What does a rejection in the Deeds Office mean? And when does this apply?
A Rejection is when the Deeds Office Examiners identify an error or omission in the transfer, bond or bond cancellation documents lodged. This error may have been occasioned by any one of the attorneys involved, or may be an error previously overlooked by the Deeds Office. In each instance, the queried documents must be rectified and be re-lodged.
Can I get a bond in my name and exclude my spouse?
If you are married out of Community of Property, then a property can be purchased in either spouses’ name, provided that the spouse purchasing the property will qualify for the bond on their own.
Article source: Kruger Attorneys & Conveyancers Inc