Transfer Attorney vs Bond Attorney vs Bond Cancellation Attorney
When a property is sold in South Africa, the transfer process is managed by up to three separate attorneys, each instructed by a different principal. The transfer attorney, the bond registration attorney, and the bond cancellation attorney all play a specific role in getting a transaction registered, and in most cases, none of them represents both the buyer and the seller.
The Transfer Attorney
The transfer attorney, also referred to as the conveyancing attorney, is responsible for transferring ownership of the property from the seller's name into the buyer's name. This is the central role in the transaction, and the transfer attorney coordinates the entire process from instruction through to registration at the Deeds Office.
Under South African common law, it is the seller's prerogative to nominate and appoint the transfer attorney. The parties may agree otherwise in the Offer to Purchase, but in the absence of such an agreement, the choice belongs to the seller.
The transfer attorney prepares all transfer documents, attends to FICA compliance for both parties, applies for the rates clearance certificate from the municipality, collects the purchase price, and ultimately lodges the transfer documents at the Deeds Office. Once registration is confirmed, the transfer attorney settles all outstanding amounts and pays the net proceeds to the seller.
Despite being nominated by the seller, the transfer attorney's professional fees are paid by the buyer. These fees are calculated on a sliding scale based on the purchase price and are guided by the Legal Practice Council tariff.
The Bond Attorney
The bond attorney is appointed by the buyer's bank, not by the buyer or the seller. When a buyer applies for a home loan and the bank approves the application, the bank instructs an attorney from its approved panel to register a mortgage bond over the property in favour of the bank. The bond attorney acts for the bank, not for the buyer, although it is the buyer who pays their fees.
The bond attorney's role is specific: to prepare the bond registration documents, have them signed by the buyer, and lodge them at the Deeds Office simultaneously with the transfer documents. The bond attorney issues guarantees to the transfer attorney confirming that the purchase price will be paid over on registration. These guarantees are what give the transfer attorney the assurance needed to proceed with lodgement and eventual registration.
The buyer generally has limited say in which firm is appointed as bond attorney, as most banks work from a fixed panel. The fees are calculated on a sliding scale based on the bond amount, guided by the Legal Practice Council tariff, and are paid by the buyer separately from the transfer attorney fees.
Where the buyer purchases cash and no home loan is required, there is no bond attorney involved in the transaction.
The Cancellation Attorney
The cancellation attorney is only involved in a transaction where the seller has an existing bond over the property being sold. Where the seller owns the property free of any bond, no bond cancellation attorney is required and no cancellation costs will be incurred.
Where a bond exists, the seller's bank appoints the cancellation attorney from its own panel of attorneys. The cancellation attorney acts for the seller's bank, and their fees are for the seller's account. They are deducted from the seller's proceeds on registration.
The cancellation attorney's role is to obtain the settlement figures from the seller's bank, prepare the bond cancellation documents, and lodge them at the Deeds Office simultaneously with the transfer and bond registration documents.
Sellers should notify their bank of the intended sale as early as possible in the process. Most banks require approximately 90 days' notice of cancellation, and where that notice is not given timeously, penalty interest may be payable, the cost of which is for the seller's account.
How the Three Work Together
Each of the three attorneys operates independently, but registration cannot take place until all three are ready to lodge simultaneously at the Deeds Office. This is an established requirement of the conveyancing process, and the transfer attorney coordinates it, liaising with both the bond attorney and the cancellation attorney to align their respective documents, guarantees, and lodgement dates.
In practice, a delay by any one of the three holds up the entire transaction. If the buyer's bank takes longer than anticipated to issue bond documents, the transfer attorney cannot lodge. If the cancellation attorney is waiting on settlement figures from the seller's bank, lodgement is similarly delayed. If outstanding compliance certificates or rates clearance figures have not been secured, the transfer attorney cannot proceed regardless of where the other parties stand.
This is why the timeline of a property transfer is rarely determined by a single factor. It is the product of multiple processes running in parallel, each dependent on the others reaching the same point at the same time. An experienced transfer attorney who maintains active communication with all parties is the single most important factor in keeping that process on track.
CHA Properties: Professional Property Practitioners
CHA Properties works with sellers and buyers through every stage of a transaction, from mandate to registration, and can guide you on what to expect from each attorney involved in your transfer.
If you are selling or buying a property and want clarity on the process before you begin, contact us and speak to one of our professional and experienced property practitioners.
Thinking of selling and want the transfer process handled smoothly? Find out what your property is really worth. Request a free property valuation or speak to an agent on +27 83 475 7876.