All you need to know about Bond registration
Buying a home and registering a bond can be a long and complex process. It helps to know the parties involved and the steps required for bond registration.
Parties involved in the sale or purchase of a property:
- Estate Agent
- Transferring Attorney (appointed by the seller to transfer the property into the buyer’s name)
- Bond Attorney (appointed by the bank granting the bond to register the bond)
- Cancellation Attorney (appointed by the bank canceling bond of seller to cancel the previous bond)
The same attorney could be appointed to handle more than one or even all of the above transactions.
The Transfer Process
While the transfer process follows a series of successive stages, the time period involved varies considerably. Generally the following guidelines apply: – A cash transaction might take approximately 6 weeks – In normal circumstances, including bond approval, approximately 8 weeks – If conditional upon the sale of the purchaser’s property (within 30 days), approximately 12 weeks.
Stage 1 – The Purchase / Sale of a property
Property can be sold by way of a written Deed of Sale, signed by both the purchaser and the seller, as well as their spouses if they are married in community of property. Witnesses need to sign the Deed of Sale as well. A verbal contract for the sale or mortgage of fixed property is invalid.
The Deed of Sale must be carefully examined to ensure that it accurately reflects the parties’ full agreement, especially with regard to the amount payable, the method of payment, all verbal promises made by the seller or his estate agent, the incorporation of all special conditions to suit the parties’ particular needs and the time of the buyer’s physical occupation of the property (which may coincide with registration) and transfer of the property.
If physical occupation and transfer do not coincide, the deed of sale must specifically provide for occupational rental payable between the dates of occupation and transfer. If the sale is subject to the buyer obtaining a bond, this must also be specified in the deed of sale, as must the period within which bond approval must be obtained to avoid the deal being delayed indefinitely.
Stage 1 is finalised when the Agreement/Deed of Sale is concluded/signed between the purchaser and the seller, having been brought together by the estate agent. It must be noted that Estate Agents are not always a party to the sale and are therefore not compulsory to the registration process. Estate Agents have their own Deeds of Sale, although an attorney can draft one specifically suited to the needs of the parties concerned.
The purchaser makes an initial payment (deposit) and receives a copy of the Deed of Sale for his or her records as does the seller. Simultaneously, the Transferring Attorney is furnished with the original Deed / Agreement of Sale, making it possible to draw up documents. A copy is kept on file by the Estate Agency concerned.
Stage 3 – Bond application and approval
The purchaser applies for a bond with a bank. Once a bond has been granted by the bank, it advises the Bond Attorney to register the bond.
If the bank requests it, fumigators may be instructed to inspect the property for infestation by beetle.(These certificates are usually only compulsory in coastal regions). Also, if the seller is not in possession of an Electrical Clearance Certificate, this will need to be obtained.