Conveyancing fees are among several costs – over and above the purchase price – that buyers need to budget for when buying a property.
Typically appointed by the seller, but paid for by the buyer, conveyancers are an essential part of every property transaction, but what exactly do they do, and how much value do they add for the buyer and the seller?
“Conveyancing is the process of transferring legal ownership of fixed property from one person – or a company or trust – to another,” says Bill Rawson, chairman of the Rawson Property Group.
“It involves taking the deed of sale, ensuring it meets all the legal requirements, and then requesting and collecting supporting information and drafting all the necessary documentation to be lodged with the Deeds Office to finalise the registration of the sale.”
The information the conveyancer will need to collect includes the mortgage bond, cancellation figures and title deeds from the seller’s bank, if applicable, compliance certificates from the seller, and the amounts from the municipality for a rates clearance certificate on the property in question.
Documents to be drafted include a power of attorney to pass transfer for the seller to sign, giving permission for the conveyancer to transfer registered ownership of the property on the seller’s behalf. You will also need declarations in respect of marital status, identity number and insolvency for the seller and buyer, confirming the details and solvency of all parties involved.
In addition to this, a declaration for transfer duty or VAT needs to be prepared and signed, along with bond registration documentation for the buyer, if necessary.
“It can be a time-consuming and complicated process,” says Rawson, “and requires specialist knowledge and extraordinary accuracy – particularly in less straightforward transactions that include things like subdivision or consolidation of properties, or the registration of servitudes. Because of this, only an attorney who has passed the national conveyancing examination is allowed to perform these services, and no property sale can be concluded without having a qualified conveyancer on board.”
The reason for these strict rules, Rawson says, is to protect the rights of buyers and sellers during what is often one of the most high-value transactions they will make in their lifetimes.
“Property ownership is also something that is taken very seriously by the government, and it’s vital that we retain a high standard of land registration,” he says.
Since having a conveyancer is a legal requirement for a sale, it makes sense that conveyancing fees are also regulated by law, but it’s somewhat less logical that those fees are almost always paid by the buyer without negotiation.
“Conveyancers are traditionally appointed by the seller,” says Rawson, “largely because the seller is at greater risk during the transaction, and stands to lose more if things go wrong. The fact that the fees are normally covered by the buyer is simply a matter of convention. Neither of these things is set in stone, however, and you can always negotiate a different arrangement in your agreement of sale.”
Regardless of the expense, conveyancers perform an undeniably vital function in the property sales process, but their value extends beyond simply fulfilling a legal requirement.
“Without a conveyancer, buying or selling a property would be an intimidating complex process,” says Rawson, “but thanks to their expertise, most sales run like a well-oiled machine. You may not have choice about appointing them, but that doesn’t mean they don’t earn their dues. Good conveyancers are worth their weight in gold.”
This article “Conveyancing Fees: What Are You Paying For? ” was issued by Rawson Property Group – http://www.rawson.co.za/
