Author: property 24
27 January 2021
Why checking the title deed before making an offer to purchase is important
The property market was brought to a standstill with the Deeds Office closure last year, but many might fail to understand why. For clarity, one first needs to understand that the title deed is a document that proves legal ownership of a property in South Africa – and the Deeds Office is where copies of these documents are held.
When these offices close, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa explains that no properties can be bought or sold as the title deeds cannot be transferred into the new owner’s name.
“According to the Deeds Registries Act, 47 of 1937, anyone who purchases a home will need to have the title deed transferred into their name as proof that they own the property. This is why several Deeds Offices are found throughout the country, each tasked with handling a particular area of jurisdiction. The office within the closest proximity to where the property is located will keep a copy of the home’s Title Deed in the form of the Deeds Registry. This registry is open to anyone who requires access to this information for a nominal cost,” he clarifies.
In most cases, the original copy of the Title Deed will be held by the financial institution through whom the buyer has acquired his/her home finance.
Transfer of ownership
“The owner of the property will only receive the original Title Deed once the home loan is paid back in full. Banks are legally entitled to keep the Title Deed because it is their money that bought the home and they have a vested interest in the property,” explains Goslett.
A title deed does not only define proof of ownership, but also states the details of a property, conditions and purchase price. When an owner wants to sell their property, an original title deed is required when registering the property in the buyer’s name in the deeds office.
In order to get a title deed transferred into your name you will need the assistance of a lawyer specialising in property transfers (also known as a conveyancer), and you will only become the owner of the property once the Registrar of Deeds signs and endorses the deed, says Steve van Wyk, Seeff’s MD in Centurion.
After this has been signed, a copy of the title deed is kept at the Deeds Office closest to you, and the original would be sent to the conveyancers. Should the property be bonded, the conveyancers will forward the original to the bank as security, or alternatively to the new owner if the property is not bonded.
In addition to declaring legal ownership, the document also contains important information about the property, including a comprehensive description and exact size of the property as well as the rules and restrictions surrounding the property. The document also shares some insight into a property’s history, including the name of the registered owner and previous owners and the purchase price paid by the current owner.
‘Conditions applicable to the zoning, use or sale of the land’
“By reading the Title Deed on a property, a prospective buyer will know if there are any conditions applicable to the zoning, use or sale of the land, along with all real rights registered in respect of the property. This is why buyers should read through the Title Deed carefully to ensure that they are fully aware of all the details pertaining to the property before signing the OTP,” adds Goslett.
Even if the bank that holds the bond over the property has the original Title Deed in their possession, Goslett notes that the homeowner or agent marketing the home should have a copy that the buyer can read through. Alternatively, buyers can access the information directly by obtaining a copy from the Deeds Office.
An important part of the title deeds will be joint ownership. “If the property is owned by more than one person then this will need to be included in the details,” explains Rhys Dyer, CEO of ooba home loans, South Africa’s home loan comparison service. “It should also set out exactly how much of the property is owned by each person, and there should be details on what will happen if the other person were to die, these details are known as survivorship details.”
Considering how important the Title Deed and consequently the Deeds Office is, it is incredible how quickly the real estate industry has been able to bounce back after the hard lockdown.
“After months of not being able to generate any income, our agents hit the ground running when the Deeds Offices finally re-opened, recording record-high sales volumes month after month in the latter half of 2020. While we do not know what lies ahead in the year to come, we remain hopeful that we shall not see another nation-wide Deeds Office closure and are incredibly grateful for the months of excellent sales we are continuing to see,” says Goslett.
The process of having a home’s title deed transferred to your name happens in the following way:
– The transfer attorney (appointed by the seller) prepares all the documents needed for registering the property transfer.
– After the bond documentation for the buyer has been prepared and the seller’s bond has been cancelled, all the necessary information, including the clearances from local authorities, bodies corporate and SARS, will be lodged at the Deeds Office.
– The Deeds Office will take two to three weeks to verify all submitted documents depending on the various circumstances and, once complete, will notify all the attorneys. The final step of registration will take place on the same day.
– On the day of registration, the bank pays out the amount needed for the home loan and the buyer officially becomes the owner of the property. This entire registration process typically takes between two to three months to complete.
To obtain a copy of a deed or document from a deeds registry, you must:
– Go to any Deeds Office (deeds registries may not give out information acting on a letter or a telephone call).
– Go to the information desk, where an official will help you complete a prescribed form and explain the procedure.
– Request a data typist to do a search on the property, pay the required fee at the cashier’s office and take the receipt back to the official at the information desk.
– A search may take 30 to 60 minutes. In some of the larger offices, the copy of a deed is posted or it must be collected after a certain period of time.
Alternatively, you can contact a conveyancer in your area to assist you with the process.
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