Property transfer delays: what causes them and how they can be avoided

Buying or selling real estate can be a stressful undertaking, but there is also some good news.

There are various steps you can take to mitigate any delays in getting to that wonderful day when the transfer process is finalised. Lew Geffen Sotheby’s International Realty takes a close look at property transfer delays and what can be done to avoid them. These delays often occur around buyer financing, compliance certificates, rates clearance, conveyancing documents, SARS compliance and the deeds office.

Delays related to buyer financing

Once a would-be buyer has signed an offer to purchase, they will, in many cases, need to secure a home loan. If they don’t have their paperwork and finances in order, this can take some time, although using the services of a bond originator will make a big difference. In certain circumstances, especially if the buyer is self-employed, the banks may take some time (and require some extra documentation) to make their decision. Buyers can speed up this process ahead of time by getting prequalified for home loan finance.

Compliance certificates

The ball’s in the seller’s court this time! No property transfer can go to the deeds office until they have certain compliance certificates, such as electrical, beetle and electric fence (if applicable) compliance. These certificates have long validity periods (at least six months), so it’s something you can get a jumpstart on before you even put your property on the market.

Rates clearance

Another responsibility on the seller’s shoulders is getting a rates clearance certificate. This document, issued by the relevant local authority, serves to certify that there is no outstanding municipal debt on the property. The Deeds Registries Act stipulates that no property may be transferred — regardless of how much it is worth — without a valid rates clearance certificate. Thanks to rates clearance certificates, the buyer can be assured that the rates for the two years leading up to the sale have been paid in full. Fortunately, in most cases, getting a rates clearance certificate is relatively quick.

Conveyancing documents

In a property sale, there are typically multiple parts of the process happening at the same time. For example, while the buyer is securing their finance, the conveyancing attorney will be starting to prepare the transfer. As part of this process, they need to run FICA processes on both the buyer and the seller. Signatures are also needed from both parties. Buyers and sellers can avoid delays by ensuring ahead of time that they are FICA-compliant and that they are available to sign documents when they are required to do so.

SARS compliance

One of the documents that has to be lodged with the Deeds Office is a transfer duty receipt, which is issued by SARS. The issuing of this document is an opportunity for the receiver of revenue to enforce tax compliance in every regard – not just regarding the buyer or seller’s property portfolio. Both the buyer and seller can circumvent delays by ensuring that they are fully tax-compliant.

Deeds office delays

Unfortunately, neither the buyer nor the seller has any power to mitigate many of the possible delays at the deeds office. It’s important to remember that if your transaction has gone to the deeds office at a time of year when there are numerous public holidays, the process will naturally take a little longer. Factors that can cause delays include the cancellation of the seller’s bond, registration of a new bond or incorrect/incomplete documentation.

Some other strategies for avoiding transfer delays

• Submit all necessary documentation as soon as it is requested.
• Ensure that you are upfront with the property practitioner about your financial situation and what you can afford.
• If you’re buying property, get preapproved by a bond originator like ooba.
• Buyers also need to ensure that they have budgeted accurately for the transfer costs of the new property they are buying.

If you’re looking to buy or sell property in South Africa, the team from Lew Geffen Sotheby’s International Realty has all the answers you need. Get in touch and let us help you buy, sell or rent real estate.