 Good morning, and welcome to the EPSA Home Learns Private Property Weekly Webinar Slut. By way of introduction, I am Michelle Remdin from EPSA Home Learns. In today's slot, we will cover the topic of how to effectively manage the transfer process as a property practitioner. I do hope you can all hear me clearly. If not, please send me a thumbs down on the chat. So something that has easily become a frustration point for most property practitioners, as well as sellers, is that not enough is known about the conveyancing aspects of selling a home when it comes to the costs involved, who is responsible for paying what, the cancellation of an existing bond, as well as the guarantees process and how does this all work. Buying and selling a home can easily be an overwhelming process, especially if it is your first time. And as a property practitioner, it's quite important to be fully prepared and equipped with the correct information, you know, to have a discussion with the seller and to understand the process well. So my role in Home Learns involves managing the EPSA attorney panel and that they are responsible for registering and cancelling mortgage bonds on behalf of the bank. At EPSA, we make sure that we partner with the best attorneys on the panel, attorneys that are properly qualified and fully experienced, trusting them to know our process is quite well. Joining me today is Cor Van Dieventer, a director from Van Dieventer and Van Dieventer Incorporated. And we will be chatting with him today, as well as sharing his knowledge with us and the agent community, touching on the legal aspects of selling a home, the attorney process, as well as some of those hidden costs that many of us are not aware of. So Cor, thank you for joining me today. Morning Michelle. Thank you very much for the introduction and thank you to EPSA Firstly and to Private Property for making all of this possible. It is, I think, a wonderful initiative. To all the property practitioners out there, as Michelle said, I think it's an important topic that we'll be covering today and in the future programs going forward. So we look forward to educating you or assisting you and then showing all the points out that that is causes problems in some of the transfer processes. As I've always said, Michelle, when we chatted previously to do all of this, an educated or informed seller is a fantastic seller to work with and an informed purchaser is also a great purchaser to work with. They know what they have to do, what is expected from them, and it just makes the whole process going forward so much easier for the property practitioner and for us as the conveyances. So we look forward to sharing some of our knowledge with the property practitioners out there. Excellent. So why don't we get right to it? Cor, I think you absolutely cannot avoid dealing with an attorney in the buying and selling process. Okay. You know, whether you're buying for cash or whether you are financing through a bank like EPSA, you have to be involved with an attorney. So I think let's start there. Help us to understand who are the different attorneys involved in the conveyance in process? Why are they involved? And you know, what is their role as attorneys in the conveyance in process? Correct them, Michel. Attorneys and us as conveyances, we have to do the transfer in these offices and in most cases, it must probably 90% of all transactions, there are three attorneys involved in any transfer. The first attorney that's appointed by the seller in all the provinces except Quasulina Tell is where the purchaser still has the right to appoint the conveyance. So not many people know that, but in all the other provinces, the seller has the right to appoint the transferring attorney and the transferring attorney's role in the whole process is the transfer of ownership right from the seller to the purchaser. So that is the first attorney involved in the whole process. So the transferring attorney, he sort of manages the process, he takes all the flack the whole time because the sellers and purchasers always know who the transferring attorneys are. So if anything goes wrong in the whole process, the transferring attorney gets contacted. But then there's a second attorney that is appointed by the bank that gives the bond to the purchaser. So the purchaser, if he gets his bond through APSA, APSA, as you correctly said, will appoint one of their panel attorneys. That attorney has to be on the panel of APSA to enable them to do that transfer. So APSA appoints that attorney on behalf of the purchaser. So if you can see how the roles start going with the seller appoints the transferring attorney, APSA appoints the bond registration attorney, then there's a third attorney involved in most cases. In most cases, sellers have got a bond over their property and that bond needs to be cancelled to enable transfer to take place. And that is the bond cancellation attorney. And that attorney is appointed by the seller's bank where the seller is currently holding his bond. So if APSA, if the seller's bond is with APSA in our scenario, APSA will appoint the bond cancellation attorney on behalf of the seller. So it's important for property practitioners to understand the role of those three attorneys where they fit in to the whole process. And as we said on the invitation, how to manage those three attorneys because what we pick up is, yes, the transferring attorney does all the documentation from the seller to the purchaser. They sign all those documentation. But the property practitioner then needs to follow up with the bond registration attorney whether he's purchaser has signed the bond documents, whether he has paid his fees. And if there's a problem there, be proactive, contact the purchase and say, you've been contacted by two sets of attorneys because it becomes confusing for a first time purchase where a transferring attorney is contacting a bond registration attorney is contacting him. And for that property practitioner to manage all those attorneys to get the purchase and to pay his fees and we'll get to that. And also on the cancellation side to ensure that the figures add up and they know who those attorneys are. So it can be very confusing for for purchases for sellers when all these attorneys start contacting you. So you as the property practitioner needs to then inform your seller. This is why fundamental attorneys are contacting you and that they've been appointed by absent to do your bond cancellation. So if you can understand that, explain it to your seller and purchaser. It gives them clarity. And once again, they understand the way all these emails and phone calls and stuff are coming from. Of course. And of course, the invoices are coming from as well. So you know, it's interesting that you touch on on the point that there's these three different attorneys involved, the transfer attorney, the bond registration attorney and the cancellation attorney. You know, at EPSA, we realize that it can be quite a confusing and overwhelming process. So we do allow the bond attorney to also be the transferring attorney if appointed in terms of the OTP. I think it just makes the process easier to manage if you're dealing with one attorney. And sometimes that transferring attorney will also be doing the cancellation. You know, I think from a customer point of view, to have one attorney to deal with, with signing up all the paperwork at one attorney as well also helps. However, they are distinctly different in terms of the process that is followed. It's always like putting two heads on. They'll sign the transfer documents and they'll finish that. And we explained to him that is the transfer that you've signed and you put on your bond registration at EPSA. And he said, this is the bond registration documents that you are signing on once they have clarity on that. It makes it a much easier experience for your clients. And they appreciate that, I think, Michelle. So yes, it's wonderful that EPSA has taken the initiative to, to allow purchases to do that. It makes it, it cuts the whole process in, most probably about three to four weeks. So yes, it's great that EPSA does that. Certainly saves a lot of time in terms of registering. So, Ko, I think, you know, something that comes up quite often as well is dealing with all of these different attorneys and then receiving those bills. I certainly was one that was very confused when you get all of these various bills and invoices coming through. And you often wonder, is this a scam? Is it legitimate? You know, tell us about the costs involved for the different attorneys. Typically, what can a seller expect to pay? What can a buyer expect to pay? I think it's really important in the home ownership journey that everyone is educated and understands the costs involved because it can be quite expensive. Most definitely, Michelle. And in these difficult times, I think speaking about finances, whether it's with the seller or the purchaser, it is a difficult thing to do because you have to go scratch around almost in your seller's finances. And then you have to tell the purchaser, as you correctly said, these amounts can quickly creep up into big amounts. But as a property practitioner, if you can break that barrier with your seller and explain to him and ask some odd questions in some cases, which I'll get to you now. And clarify that it causes or it makes the whole process going forward so much easier because once we informed of the seller's position and I'll get to all of that now, it is so much easier because those problems inevitably creeps out towards the end of the transaction where we start applying for rights and levies and all those things. But the first thing that a seller will pay for and this is where some sellers get confused and we get these calls and say, but why is the attorney's building and why have I been charged for attorney's fees and all of that? There are fees involved. And once again, that I said, the bond cancellation fee that that seller has to pay where his bond is cancelled. He has to pay those fees to those attorneys and the fees for most bond cancellations is between four and a half thousand and five thousand reins for cancellation of that bond, not a lot of money, but these days every penny counts and your seller needs to be informed that there will be attorney's fees on the seller side that is the bond cancellation if there is a bond over the property. And what we pick up sometimes is purchase to say, but my bond has been paid up, my amount is zero. If there's still a bond registered indoors over that part of it, whether your balance is zero with absent, you still need to have that bond cancelled. It doesn't matter whether it's zero or not. It still needs to be cancelled. So look out for those fees. Then fees that we are finding also on the sellers beyond that that peeps up on them is is all the compliance certificates that they have to apply to enable transfer to take place. So the first one that we all work with will know is the certificate of compliance or the electrical wiring certificate. The cost of issuing that certificate is not not a lot 500 to 750 to a thousand that we've seen. But the next part is where there are alterations that needs to be made with stuff is not used or something like that quickly where the 750 for the issue of the certificate for the rectification of that, it might be a three or four thousand reins that your seller has to pay to the electrician to enable them to bring all those repairs in and issue the certificate according to the regulations. And so always say to property practitioners, tell your seller to budget four thousand reins for the certificate was inevitably they sometimes are replaced in the second one. If there's electrical fencing installed on the property and electrical fencing certificate must also be issued by that or any electrician that is on the board and qualified to issue electrical fencing certificates. And once again, on that side there, there are always some rectifications that have to be made. We discussed that some angles have changed in terms of the regulation. So prepare yourself. Once again, there might be an extra fee for the issuing of that electrical fencing certificate. Third one, gas compliance certificate or certificate of conformity as they call it in the regulations. That is, if there's any gas installation on that property, whether it is an internal heater that is installed stoves or the ones that we find the most of, as soon as there is any gas installation on that property, a gas certificate needs to be issued by somebody that has been registered in terms of the act. The fourth one that we've got, you can see how all these are starting to add up. If you find the waste and cape, there is now a plumbing certificate that needs to be issued to ensure that the water flow is correct with the droughts that Cape Town have had in the Western Cape and in Cape Town, especially a couple of years back, they have said now that plumbers have to come out, check that everything is correct in terms of the flow and the capacity and all those things. And that's another cost that that might be added onto the sales account because he has to pay that plumber to bring in any repairs that that needs to be done. Certificate number five, as we carry on, once again, if you're lucky enough to stay along the coast, anywhere along the coast, a border beetle or entomologist certificate needs to be issued by somebody for border beetle in most cases. So anywhere along the coast, that certificate needs to be given to the conveyances by the seller. And if there's any border beetle or anything like that, once again, your poor seller has to cover those costs. If there's border beetle in the wood or anything like that. So certificate number six, as we discussed yesterday as well, if you're on small holdings now and what we've seen small holdings and even in Cape Town in some suburbs where there's bowels and stuff like that, most of the banks are requiring a bore hold certificate, which that ball has to comply with certain standards and then all of that, which is another cost. I've seen the cost anything between four and 10,000 rounds for the issuing of that certificate because it has to measure the water flow, water quality and all of that. So you can quickly see those certificates where you think it's just a 750, a 750. If it's 5,000 rounds per certificate, your poor seller could be in for quite a bit of money that he has to pay in on that side. Then number three, I think that's the most important one and the most expenses that the seller will probably have to pay is the commission to the property practitioner. Hopefully in most cases, the property practitioners that are online are fortunate to get 7.5%. So the seller has to pay that to the property practitioner. Then also rates in taxes, in Johannesburg, in Hopting, where we are now here, that the municipalities require the sellers to pay three months rates in taxes upfront, which can also be quite a bit of money if your rates in taxes are 3, 4, 5,000 rounds per month. But also, and this is the caveat, where that seller has to pay any arrears that he has on his rates in taxes. And that is where we're getting now that the property practitioner needs to sit with the seller, asking for the latest rates in taxes amount because people are under pressure because of lockdown and the economy and stuff like that. We are finding that these amounts can sometimes be quite considerable in that scene. So look at what the rates are, but also ask for a latest rates account from your seller, because these sums all have to add up and I'll get to that when we get to the end of the seller's cost. The last one, the second last one that I'll discuss is levies. If it's sectional title, also request a latest levy statement from your seller and make sure that that levy statement is up to date and it's been paid up and they're not too far in arrears. And the last one then, Michelle, is also get a latest bond account statement from your seller. Hopefully they bond these with Exxer and they pay it up and they're in good standing. But if that seller is in arrears with his bond and you can quickly see when you start adding up all these amounts, all the certificates, all the cancellation figures we'll get to and your poor seller is under pressure because it's behind on rates and taxes and levies and your commission that you have to add up. Make sure that all these amounts that you've added up are sufficient when you market the property to take it to market that you don't get a surprise where your seller that we've seen is 200 or 300,000 rounds behind on rates and taxes and all of a sudden you get a fantastic offer from a purchaser but once we start making these sums, there's a shortfall. So that becomes a problem and property practitioners out there ask the odd questions. It's difficult, but don't take a mandate or you can take a mandate where there's a shortfall but then you've got to explain to your seller and to your purchaser that the process will take longer and I'm sure that you'll cover. I think you're touching on something so important. So firstly, just to comment, I am surprised to understand that there is actually quite a lot of certificates that is the responsibility of the seller to get and there's costs involved to your point but something that we see within the bank is the cancellations process. I don't think that property practitioners and some of our sellers understand what goes into that process, particularly around the early termination fee and how that works. So maybe take us through that process as well and then we can close off with understanding how the guarantees and the shortfalls works as well. Let's quickly just check quickly on the purchaser side, Michelle. Then I'll run over to the guarantees because it's important to sort of check your seller's finances but also to explain costs up front before that purchase that even makes the offer of what is cost or and we all know these costs and all of that but the most important cost that your purchaser will have to pay is firstly the transfer costs which gets paid to the transferring attorney and please understand the difference there. There's always transfer costs for us attorneys, fortunately unfortunately for the purchaser but there's always transfer costs and go look through those tables on websites and our website fundyeventes.law make sure that you know what the transfer costs are that the purchaser has to pay. Secondly, there's two things in life different taxes but they are in some cases they are transfer duty. Transfer duty is what goes to South African revenue services that is for properties over one million Reins. So if you buy a property over one million Reins there will be transfer duty payable to South. The third cost that a purchaser there will always be and and this is where purchasers sometimes forget these bond registration fees that are payable to the bond registration attorney. It's as we discussed earlier right in the beginning if you go add up all these fees your per purchaser if he gets invoiced by a transferring attorney yes transfer duty and here is bond registration costs they are under tremendous pressure to to pay those costs. So once again as we said if you inform your purchaser that there's all these costs they know what to pay and they pay it quickly it speeds up the whole process tremendously. Then other ones I've just made notes of here is bank initiation fees sometimes apps would request a purchase if you pay bank initiation fees upfront and those are your fees for doing the credit checks sending out there the evaluator and then all those things and and that cost initiation fees now is 6400 Reins per bond registration. So if it's payable upfront it can be quite a significant fee for your purchase or also to pay and then lastly occupational rental if your purchaser is taking occupation prior to registration it's not voluntary to pay that occupational rental they have to pay that in some cases it can can also be quite a significant amount that that purchase has to pay on a monthly basis. So as you see there's costs so there's a purchase and it can be quite quite a big amount quite a big amount on that. And that's why it's so important to know what you're getting yourself into and to be prepared you know and as property practitioners for you to be able to inform the buyer and the purchaser of what they potentially could be getting themselves into. If that purchaser knows me pays his cost I can assure you the property practitioners out there that's online now you're going to be saving two to three weeks on a transaction where you've got a fantastic purchase that pays all his fees on the whole transaction and smoothly. So under the last bit there Michelle and if I take notes it's gone so quickly. I know we're running out of time. I can talk a lot and I love talking about it and it's so good. And we will come back and talk over you. We'll come back and is the cancellation process that we discussed earlier or you requested that we discussed earlier. Firstly the cancellation guarantee process when the OTP comes in and everything's fine and it's all in place we have to request cancellation figures from the bond cancellation attorney. They have to give us those figures what amount is required by EPSA to cancel that seller's bond and that's why as I said with the cost it's imperative that you look at your latest bank state or bond statement from your seller and see what it is because that inevitably will be more or less that is going to be needed to settle that seller's bond and just a quick one here for the property practitioners the banks or EPSA when they issue it and then all the other other banks on those cancellation figures they add three months in instalment on to that so if your bond is a million they would add a million and 21 000 your seller gets upset because he says but my bond statement only says a million why do I need a million and 21 000 to cancel it it's for reasons that some sellers unfortunately stop paying and the bank makes provision for that when we cancel the bond so that is on the cancellation side but also as you mentioned earlier please inform your sellers or the property practitioners that once that property goes to the market that they inform EPSA of that 90-day penalty clause that the bond or the property is on the market and you give up giving your 90 days notice because the the last thing you want is for the property to sell quickly it's a cash purchase and all of a sudden the banks enforces that 90-day penalty clause which can in some times some cases also be quite a lot of money so make sure that you get your sellers to notify EPSA that your property is going to the market then lastly once we've got those cancellation figures that we've got we have to issue guarantees from the bond registration side on behalf of EPSA to all the various attorneys involved in the process and those guarantees will cover the bond cancellation the purchase price any fees and all of that so once those guarantees matches up to the cancellation and the process and all of that the whole process will start and just lastly Michelle finish on that those figures that are issued the cancellation figures and the guarantees are only valid for three months from date of issue by the sellers bank and by the bond registration bank on that side if those figures or the time lapses in three months it's almost like we we start all over again that's why it's imperative that we work together as a team from the EPSA and all the property practitioners out there to ensure that the whole process goes smoothly there's no hiccups towards the end where some of these figures might lapse and it's even more important during these times where these offices are closing these backlogs at some of these offices we've been finding in some of these offices like Pretoria and Peter Maritzberg there there was tremendous backlogs four to six weeks from from date of lodgment to date of registration so the more we can manage the process together I think the better the process is for everybody involved yeah wonderful core I think you know like you said you know we're running out of time but I think you've touched on such interesting topics you know thank you for such an insightful conversation I certainly myself have learned a lot you know buying and selling a house the legal process can be very confusing let alone all the paperwork that needs to be completed and to your point you know the recent events COVID-19 the unrest that we've experienced as well you know all of these things further complicates the process and it's precisely for this reason that we should be as a property industry talking about these common challenges and as well as the opportunities and successes as a property industry so please do reach out to us property practitioners to Apsa home loans or to our panel attorney for any questions or any issues you would like us to provide insights on we will be posting the resources that core shared today on the private property platform and please do let private private property know if there's any topics you would like covered as well to help support you as a property practitioner community core thank you for your time today and thank you for the valuable insights I certainly enjoyed the conversation thank you Michelle thank you to Apsa for taking initiative and private property it's really appreciated from our side and to the property practitioners out there keep on selling good luck and we're heading towards the end of the year I can't believe it so thank you once again Michelle for the opportunity it is really appreciated thank you pleasure thank you Paul cheers