There are various costs associated with a transfer of property, some of which are payable by the purchaser and others for which the seller is liable.

An agreement of sale will ordinarily provide that the purchaser is liable to pay the conveyancing costs related to the transfer of a property. These costs are payable prior to registration of transfer and include:

- A fee payable to the conveyancers attending to the transfer of the property, which increases as the value of the property increases and which is based on national guidelines recommended by the Law Society of South Africa. This fee is in respect of the general conveyancing work involved in the registration of a transfer in the relevant Deeds Office and relates to the conveyancer's responsibilities to prepare the documents, control the finances related to the transfer, apply for and obtain the rates certificate and transfer duty receipt, ensure compliance with the terms of the contract of sale, and also to ensure that the documents lodged in the Deeds Office are accurate and conditions of title are correctly brought forward in the title deeds.

- A charge for disbursements incurred and for any postages and petties. The conveyancers usually charge a fee for the collection of FICA documents as required in terms of the Financial Intelligence Centre Act No 38 of 2001.

- Transfer duty, which is the tax payable to the South African Revenue Services (SARS) on the transfer of an immovable property. This is required to be paid to SARS prior to lodgement of the transfer in the Deeds Office as SARS issues a receipt which is required to be lodged with the transfer documents in the Deeds Office. If the transaction is one on which VAT is payable, then transfer duty is not payable, and instead an exemption receipt is issued by SARS and lodged in the Deeds Office

- A fee payable to the relevant municipality to obtain a rates assessment on the property and, once the rates have been paid, a rates clearance certificate. This certificate is also required to be lodged with the transfer documents in the Deeds Office.

- A fee is payable to the Deeds Office for the examination and registration of the transfer documents and this fee is also based on the value of the property involved in the transfer.

- Bond registration costs, should the purchaser have obtained a bond in order to finance the transfer. These costs are made up of the conveyancer's fee, postages and petties, Deeds Office registration fee and any administration charges that the banks impose. These costs are separate from and additional to the costs of the transfer.

The other costs involved in a property transfer are those for which the seller is liable. The estate agents commission is usually paid by the seller as are the costs of obtaining borer and electrical compliance certificates, unless the agreement provides otherwise. Further, any charges related to the cancellation of an existing mortgage bond over the property are also for the seller's account. – Carla Martin

Carla Martin is a senior associate (Conveyancing Department) at Garlicke & Bousfield Inc.

www.property24.co.za

 10/08/2008