The Importance Of Understanding Your Property's Title Deed (now more than ever)
Category Advice
Sellers of property please note:
As from 1 January 2020 any person wishing to apply for a certified copy of a title deed or mortgage bond, must place an advert in any newspaper that circulates in the area where the property is situated. The application must be done by means of an affidavit that must be signed in the presence of a Commissioner of Oath.
The general public must thus be informed of the intention, and allow anyone who wishes to inspect a copy of the title deed or mortgage bond, to do so, and to object thereto, should they so wish, within 2 weeks of the advertisement being published.
What does this mean?
Proof of property ownership is having a copy of the property's title deed in your possession. Should your property be bonded, the title deed is in possession of the relevant financial institution holding your property as security for payment of the loan amount. If you have sold the said property, the process of transferring ownership requires your title deed copy being transferred to the purchaser and registered in his/her/its name in the Deeds Office as ownership is transferred from one person to another only by registration of a deed of transfer. The purpose is to ensure the security and indisputability of an owner's title to the property in question. Registration cannot take place unless the transferor (owner) has the title deed of the property concerned.
The above procedure with regards to obtaining a certified copy relates to the instance where the existing copy has been lost/mislaid/destroyed. This procedure could, of course, cause delays with the transfer of the seller's property or bond registration of the buyer. In the event of the purchaser requiring a mortgage loan to be registered against the title deed in order to enable the financing of the transaction, the original title deed will be held by the bank which will also have to consent to the application for a lost or destroyed deed.
It is therefore imperative that sellers and estate agents establish from the outset whether the original title deed is available. REDZetc is most definitely now going to make it a term of our seller's declaration form as many property owners are not even aware of the existence of their property's title deeds.
After all it is the title deed that contains vital information regarding the property that is being sold...and purchased.
Why is it important to know what information is attached to the property's title deed?
Simple. The seller needs to know what he/she/it is selling and the purchaser most definitely needs to know what he/she/it is buying!
The following is some very vital information, but is not necessarily exhaustive. A good property lawyer will be able to explain the contents to you if required, but here follows a layman's explanation:
- The title deed indicates who the registered owner of the property is. Ownership is regarded as a 'real right' in property.
- The title deed will also indicate any interests that other parties may have in the property, i.e. 'limited real rights' that are registered rights which one person may have over the property of another. The existence of an interest in someone's property affects the owner's rights (like a drainage and sewerage servitude held by the local authority) which can influence where and how buildings may be constructed and it can also influence the value of the property (like a right of way).
- Real and limited real rights that are registered against the title deed are enforceable against the whole world.
- Limited real rights that are registered against the title deeds of a property are enforceable irrespective of whether or not a purchaser of that property was aware of the existence of these rights.
Which documents need to be lodged with the Registrar of Deeds when a property is being transferred?
- the transferor's original title deed;
- the power of attorney to pass transfer which will authorise the transferor's conveyancer to act on behalf of the transferor;
- a transfer duty receipt or VAT certificate;
- a rates clearance certificate issued by the local authority;
- a certificate issued by the local authority confirming that all amounts payable to the local authority have been paid for the two years preceding the date of application for the rates clearance certificate;
- the mortgagee's consent to the cancellation of the mortgage bond if the property is mortgaged;
- any other consent that may be required by any condition(s) of the title deed; and
- any consent that may be required in terms of any other law.
All the above information makes it quite clear that both the seller of a property as well as the purchaser need to be well informed as to the contents of the title deed of the property in question.
Should you require any further information relating to the above information, please do not hesitate to call Pam Snyman at 082 8000 867 or consult your legal advisor.
Pam Snyman CPRE (NQF Level 7)
(MPhil, Dip Advanced Property Practice, Dip Property Investment & Valuation)
Author: REDZetc
