Property transfer process demystified
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It becomes worrisome that after paying the full purchase price, one has to wait a long time before receiving formal title to their property.
It is common that one would expect a straightforward trading transaction where one gets a receipt for the product.
However, because of the amounts involved, quite a few cautionary steps have to be taken to ensure that the buyer receives good title to the property.
Unless stated otherwise in the agreement of sale, the purchaser is responsible for transfer charges by conveyancers or accountants in share transfers.
The least burdensome of all the transfer processes of title is share transfer. It involves the transfer of shares from one individual to the next.
For share transfer to occur, a company should only have a single asset that it owns.
There are common situations where people would want to benefit from the lure of properties that offer share transfer by selling their property as a share transfer only to realise that the company that owns the property intended for sale also owns other property that is not for sale.
The process of share transfer in property works in such a way that instead of a normal conveyance that involve the changing of names on the title deed, the company continues to own the property despite the change in ownership of the company.
The owners change by the transferring of shares from the purchaser to the seller.
Therefore, the reasoning will be that, whoever owns the company also owns the sole asset of the company, which is the property.
It becomes cheaper in the sense that one will not have to pay registration fees and stamp duty, which accounts for a significant amount of the purchase price.
This method of transfer and ownership is an advantage mainly to property investors and developers who intend to resell the property.
Little time is wasted in the transfer process as it will take a few days. It requires the lawyer or accountant in this case to just check the company records and accounts.
The chosen representative will check for the purchasers whether the company has liabilities or even other assets.
The total costs payable in most instances are far less than what will be payable where registration of title is required by the changing of deed.
In a normal transfer, which involves the changing of names on the deed, it requires the work of a conveyancer.
When the agreements of sale are signed after being drafted either by the estate agent or lawyer, the seller nominates the preferred conveyancer to whom the seller will hand over the title deed accompanied by an irrevocable power of attorney to transfer the property.
The conveyancer will draft a new deed for the benefit of purchaser attached to it will be all documents required by deeds office.
A rates clearance certificate will be applied for which will require seller to clear outstanding bills while purchaser is required to make an advance payment of rates. A statement of account will be presented to purchaser, which will include the stamp duty, registration fees, conveyancer's charges and any other charges that may be applicable.
Once the documents are with the Registrar of Deeds, they are checked and if satisfactory, the Registrar will sign the draft deed in the purchaser's name and date it. At this point, the purchaser becomes the proud owner of new property.
Cession is the ceding of property by written agreement or treaty with the purchaser getting immediate rights on the property.
In most situations, deeds are scheduled to come out at a later period.
The norm is the deeds will come out in the purchaser's name.
This method of payment is common with developers or new developments.
Vengai Madzima is a property consultant and analyst with Wisdom Properties. He can be contacted on 0772 468093 email: firstname.lastname@example.org
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Source: Wisdom Properties
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