Our professionals provide legal services in relation to the transfer of immovable property and the registration thereof with the Deeds Registry. Our services include guidance and advice, as well as the transfer of both residential and commercial property and the drafting of all necessary documentation to effect such transfers in an efficient and cost effective manner.
What does the Electronic Deeds Registration System mean for the consumer?
“I have a property portfolio and am constantly buying and selling properties. I’ve recently seen media reports that a new electronic deeds registration system is coming for South Africa. For me speed of sale and registrations is vital. Will this new system improve or worsen the current registration processes?”
You are correct in that the new Electronic Deeds Registration Systems Bill has been signed into law by the President on 19 September 2019. This new Act will enable property transactions to be processed electronically and instructs the Chief Registrar of Deeds to develop, establish and maintain such an electronic deeds registration system using information and communications technologies for the preparation, lodgement, registration, execution and storing of deeds and documents.
The purpose of the Act is to streamline property registrations in the deed’s office. As such it aims to enable the electronic processing, preparation and lodgement of deeds and documents by conveyancers and the Registrar of Deeds. It aims to do this by moving away from the traditional method of having to manually attend thereto at the Deeds Office. The Act also provides for the development of an Electronic Deeds Registration System or e-DRS, through which South Africa will take advantage of the benefits offered by internet access, e-commerce and global computerisation in the management of security of property title. With the ever-growing need for computerisation and digitalisation, the e-DRS looks to employ internet-based systems and to eventually discontinue registration procedures which are currently regulated by the Deeds Registries Act and the Sectional Titles Act.
The new electronic deeds system will hopefully enable the registration of large volumes of deeds and it will improve the turn-around times for the delivering of registered title deeds and other security documents to clients, with access to the deed’s registration services from anywhere in the country. It should in the long run speed up the registration of transactions and provide greater mobility for the registration of transactions, ultimately benefiting the consumer.
Who gets to choose the conveyancing attorney?
I’ve finally found a buyer for my property. I want my brother, who is an attorney, to do the transfer on the sale because then I know it will be done right and fast, but the buyer wants his attorney to do the transfer stating that as he has to pay transfer costs, it should be his right to choose. Whose choice is it?”
According to our common law, it is standard practice that the seller nominates the conveyancing attorney as it is believed that the seller stands more to lose than the buyer if the transaction does not continue.
In a typical property transaction, the costs due by the buyer will be for payment of the purchase price, transfer costs and transfer duty. As this represents a number of costs and financing that need to be attended to before a successful transfer of property takes place, the seller will probably feel more at ease if his nominated conveyancer handles all of these intricate steps and costs to ensure that the transaction is attended to correctly and efficiently. This does not mean that a conveyancer only acts in the interest of the seller. The conveyancer must act in the interests of both parties. However, the fact that the buyer is liable for costs, does not give the buyer a right to nominate the attorney.
It is however possible for the seller and buyer to agree that the transfer can be attended to by a conveyancer agreed upon by both parties and even one nominated by the buyer. If such agreement is made, it should ideally be added as a specific condition of the agreement of sale to ensure that no later disputes arise in this regard.
What to do when you settle your home loan?
“After nearly 20 years I’m finally at the point where I’ve just about repaid my home loan. This has me wondering though, what happens or what I should do when I pay the final instalment?”
The first thing to do after you pay your final instalment to the bank is open a bottle of champagne and celebrate your home being fully yours! Once the important celebrations are finalised, you can move on to consider your options.
It must be noted that your home loan (or mortgage) will not automatically be cancelled just because you have paid the final instalment. This leaves you with two options:
1. Keep your home loan account with the bank open; or
2. Cancel the home loan account with the bank.
Many choose to keep their home loan accounts open as they can still continue to use and draw from their flexi-account facility linked to their home loan. The advantage of keeping your home loan account open is that you will not have to incur further costs to register another bond over the property as security should you wish to take a further loan from the bank for example to fund house renovations. You will still need to pay the monthly administration costs of the bank and your insurance policy and of course, if you loan money, you will need to monthly pay back the new loan. Also note that the bank will keep the title deed to your house as security until the home loan is cancelled.
If you would rather part ways with the bank and cancel your home loan account, the following steps should be followed:
Firstly, you must give the bank written notice of your intention to cancel the home loan. Usually a period of 90 days is required. The bank will then send instructions to their cancellation attorney to assist them with cancelling the home loan at the Deeds Office. If you fail to notify the bank within the above-mentioned three-month period of the cancellation of your home loan, additional charges could be added to your settlement statement.
Secondly, the cancellation attorney will provide you with a settlement statement containing your cancellation figures. The cancellation figures is made up of the settlement amount and approximately six months of life insurance premiums in advance so that provision is made for the cancellation process to be finalised. In case of early termination, an early termination penalty may also be added to the cancellation figures. Once the cancellation figures are paid, the cancellation attorney lodges a consent to cancel your home loan at the Deeds Office. On date of registration at the Deeds Office, your home loan is officially cancelled and the account with the bank is closed.
You will then receive the title deed to your home from the cancellation attorney. This title deed reflects your ownership of your property and should be carefully stored. Once lost, it can be an expensive exercise to replace such a title deed.
Once the home loan is cancelled you no longer have to pay life insurance premiums to the bank or any bank charges or banking fees. As cancelling your home loan also means you are cancelling your home insurance with the bank, it will be important to without delay ensure that you take out the necessary insurance cover for your home.
If you are unsure about the exact pros and cons of cancelling your home loan, consider talking to your attorney and banker for more information about the options at your disposal
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