Transfer & bond costs

Conveyancing attorneys play a vital role in the registration of every property transfer or bond, but their role is often misunderstood. Furthermore legal fees are often a hidden cost that may come as a surprise to first-time buyers.

Part of the service provided by the attorney is to draft the documents necessary in order for the transaction to be registered in the deeds office, obtain a rates clearance certificate from the local municipality and ensure that any necessary tax has been paid to SARS, explains Heather Briggs of Shepstone & Wylie Attorneys.

The conveyancer will appear before the Registrar of Deeds on behalf of the parties concerned, obtain the consent of any third parties which may be required in terms of the title deed or the sale agreement and, if there is a mortgage bond, will ensure that all the bank's requirements have been satisfied.

“The conveyancing attorney is important in facilitating communication between the seller, the buyer and the estate agent and ensures that all the parties involved comply with the conditions of the sale agreement,” she adds.

In terms of fees for these services, Briggs advises that these are largely governed by a tariff which is published by the Law Society.

However she cautions that this tariff merely serves as a guideline or recommendation and therefore an attorney may charge a fee other than the stipulated tariff if they so wish. As a result, the fee may be negotiated between the attorney and their client. According to the tariff, the amount of the fee is determined by the value of the purchase price of the property or the amount of the bond to be registered. For example, according to the latest tariff effective from 1 July 2009, the recommended transfer fee for a property of R1 million is R12 500,00 excluding VAT and the recommended bond registration fee for a bond of R1 million is R9 400,00 excluding VAT.

“There are certain costs and disbursements which the attorney is entitled to charge their client over and above the tariff fee,” adds Briggs. These costs include the registration fee levied by the Deeds Office on every transaction, disbursements to computer software providers in relation to electronic instructions, postages and petties such as telephone calls, faxes and emails and other disbursements which may be paid to third parties.

“It is important not to mistake transfer fees for transfer duty,” says Briggs. Transfer duty is a property tax which is paid to SARS whereas transfer fees are the fee paid to the conveyancing attorney for the service which they provide.

Article source : FAnews (www.fanews.co.za)