It’s normal for buyers and sellers to be eager to conclude their property transaction as quickly as possible. Unfortunately, delays are extremely common during the transfer process and are often out of buyers’, sellers’, agents’ and attorneys’ control.
Roger Lotz, Franchisee for the Rawson Helderberg Group, explains the most common delays that happen during property transfers, and how to minimise them as far as possible.
Sellers are legally required to provide compliance certificates for their electrical, gas and electric fence installations as a condition of their sale. Beetle-free and water installation compliance certificates may also be required in certain areas.
“These certificates aren’t just a formality,” says Lotz. “A lot of banks require them before they will grant the buyer bond approval. That means sellers who delay getting their certificates could impact the buyer’s finance and the progress of entire sale as a result.”
To avoid this situation, Lotz advises sellers to be proactive about compliance.
“Certificates are usually valid for two years from date of issue, so it’s not like they’re going to expire if you get them a little bit early,” he says.
It’s not just sellers who can put a hitch in buyers’ bond applications. Lotz says buyers could face an extended approval process if they don’t have their finances and paperwork in order in advance.
“Getting preapproved for finance speeds things up significantly, as bond originators can help iron out any red flags early to make the approval process much easier,” says Lotz. “Originators like Rawson Finance are also able to submit your application without needing any additional paperwork if you’ve gone through the preapproval process with them in the last three months.”
The conveyancing attorney typically begins preparing the transfer while the buyer is busy securing finance. As part of this process, they need to FICA both the buyer and the seller, and get signatures from both parties, in person or using approved online document signing processes.
“Not providing FICA documents timeously, or being unavailable for signing, will create delays in the transfer process,” says Lotz.
Some conveyancing delays are out of the control of buyers and sellers, however. Getting rates clearance certificates has become a major issue for conveyancers since the onset of COVID-19.
“Ordinarily, rates clearance shouldn’t take more than a week or two,” says Lotz. “Massive backlogs caused by lockdowns and COVID outbreaks, however, have seen that lead time extending to several weeks or even months. Certain municipalities are worse than others, but the delays are unpredictable, and there’s very little that anyone can do to speed the process along.”
SARS is responsible for issuing the transfer duty receipt that has to be lodged with the Deeds Office (together with the rates clearance certificate and other transfer documentation) in order to conclude the sale. According to Lotz, however, they also use this as a way to enforce tax compliance across all other tax types. That means both the buyer and seller needs to be registered and tax-compliant before the transfer duty application will be processed.
“It’s good practice to get your tax in order before you even list – or make an offer on – a property,” says Lotz. “Any errors in the tax information you submit to your conveyancer could also cause delays, so it’s essential that you are vigilant about accuracy.”
Once your conveyancer has navigated the challenges of getting rates clearance and a transfer duty receipt, they can lodge the transfer at the Deeds Office for registration. Unfortunately, Lotz says the Deeds Office is also struggling under massive COVID-driven backlogs, causing potentially significant delays on that end as well.
“It’s unfortunate that so many of the external role players in property transfers have been so negatively affected by COVID,” he says. “It’s frustrating for buyers and sellers, and for us as property professionals. All we can do is avoid the delays within our control, and hope for the best from the municipalities and government departments as they get back on their feet after a very difficult time.”
Get in touch with Rawson Properties Somerset West on 021 851 2656 should you require assistance with your property transaction.