From sale to transfer: HBG Schindlers guides you through property law with ease

Hi, I am Jonathan Broekman from Homes of Distinction. For our Vlog, Living and Investing with Jonathan, I recently sat down with a conveyancing attorney, Marius van Rensburg, lead practitioner in Property Law, Conveyancing and Real Estate at HBG Schindlers Attorneys to discuss the role they play in property transactions. Many buyers and sellers aren't entirely sure how a lawyer might assist or whether legal expertise is necessary in the process, so I wanted to provide insights from an expert's perspective to help clarify how conveyancing attorneys can protect and streamline the process.

Marius, before we get stuck into the nitty gritty, tell us a bit about what you do and how you became a lawyer handling conveyancing. 

Well, I think I got into law by mistake like most lawyers. You start the degree, do your articles and before you know it, that's all you do. 

I am a conveyancer. I was admitted to the South African bar as a conveyancer in 1998 and I have been practising law for 26 years. I joined HBG Schindlers Attorneys in  2001 as a partner and I've grown the Property Law, Conveyancing and Real Estate department since then.

At HBG Schindlers Attorneys, we transfer and resell commercial properties, do developments and we prepare bonds for most of the commercial banks out there. Our goal at HBG Schindlers Attorneys is to try and help property practitioners, buyers and sellers to make the process go smoother and make the whole process easier for them.  

You make it sound so simple.

Well, that comes from many, many years of conducting conveyancing transactions and I am passionate about teaching and educating people. I like taking time out of my day to take a step back and explain how the process works and help people through the process.

Marius, today's chat is about buyers and sellers not understanding the role that you actually play in the whole process. Help us here and explain how involved you are in getting a buyer to feel comfortable signing a sale agreement and what happens from then onwards.

Look, it's a legal process. In a judgement I read many years ago, the judge spoke of the mysterious ways of conveyances. And I must say that that's kind of true.  While buyers and sellers are better educated about the various aspects of the conveyancing processes nowadays, it is still quite foreign to them. The acquisition or sale of a property is, for most people, one of the biggest transactions that they will ever get involved in as the property is their biggest asset.

This makes it very important for it to be done right. There are a lot of legalities involved and it is important to realise that  conveyancers don't only know property law but also contract law and other applicable laws. This is why it is important to have a conveyancer who is experienced,  and is able to communicate with you and can guide you through that process.

If something goes wrong, as is sometimes the case, you will want to have a conveyancer that's been by your side and understands what is happening, and not have to start trying to bring a new person up to speed in the middle of the transaction. A good  conveyancer is going to be able to deal with those problems without it going into a litigious situation.  We act for the seller, but we owe a duty and good faith to the buyer.

Tell me, Marius, what do you conveyancers do exactly? Once we, the real estate property practitioner, have completed the sale and passed the transfer on to you, help us understand what your role is in the next steps?

In essence our role is to transfer ownership of the property from the seller to the purchaser.
In that process, there is an administrative conveyancing process for which our team of paralegals and  conveyancers get involved.  Amongst other things, collect the deposits, make sure the bond is granted, make sure the guarantees come in on time and get the documents signed in the manner required for the Deeds Office purposes.

We also must ensure that the instructions coming from the agreement itself are followed and the process goes smoothly. This includes making sure that when the buyer takes control of the property, it's free of debt, the seller has good title, we collect the purchase price and make sure that the seller gets paid within the agreed time frames.

You make it sound like a fairly simple process, but we both know that there are many pitfalls along the way. What are some of the issues that you've come across recently? 

No, there are various pitfalls which mostly arise because of the personalities we deal with. You get people that are easy, they give you what you want and people that are not so easy. I've learnt over the years that because someone has decided to buy or sell a property, doesn't always mean they want to sell or buy. They change their minds. They say they've got money, but don't. The deposit comes in or doesn't. People say that they can get a bond but they've got problems.  There could be issues around occupation or the condition of the property. The law of "voetstoots" (denoting a sale in which the vendor is freed from all responsibility for the condition of the thing being sold) and consumer law deal with issues of the condition of the property.  

You need a seasoned conveyancer who is a good communicator and problem solver by your side.  One who will pick up the phone, make a call, go to the property to see what the issues are, call for a round table meeting and have the situation resolved.

Marius, we know from experience that in selling a house everybody knows an attorney, but not every attorney is a conveyancer. Help us understand the difference. 

Well, a conveyancer is an attorney. One must qualify as an attorney first and then take professional-designated exams to get admitted as a conveyancer.  It is a specialisation.  Beyond the qualification, I believe what makes a good conveyancer is experience and the ability to communicate well with people in order to get the job done. In my case, that includes the ability to manage a team well to meet the client's needs..

We know that once the sale agreement has been concluded, there are other steps to be fulfilled including payment of the deposit, the granting of the bond and City of Joburg or municipalities and the Deeds office to be dealt with. What sort of timelines do you need to work with? 

There have been a lot of stories about  transfers being completed in six weeks. We have also done transfers in six weeks, but the reality is that how long a transfer normally takes is dependent on the time frames indicated in the sale agreements. For example, if you've got 30 days indicated for a bond and another 30 days for guarantees, that's 60 days already. One would also need another two to three weeks for the registration at the Deeds office. A cash deal however would definitely be quicker and could be registered in six weeks. 

Other completion dependencies include the Deeds office and the city councils or municipalities. My experience has been that the deeds office is a very well run and professional organisation.  The lodging and registration can take 7 to 8 days.  And contrary to popular belief, the city councils also actually work quite efficiently. The thing with city councils is if everything is in place, the process can be quite fast. However, if there's a problem, this causes delays because they take time to resolve.

I advise sellers to, firstly, choose the right property practitioner with expertise in that area and who knows their job; then, have them conduct a due diligence so that you understand what it is that you're selling.  

When a seller approaches us, we always check whether there are issues with the City of Joburg accounts or the municipal accounts, because where there is a query, it's not going to get resolved quickly when what we need is clearance. It is best to try to resolve any issues in the marketing phase so we don't have them impacting the transfer process.

Help us understand what FICA is, how it plays into the transaction and why it is necessary.

The Financial Intelligence Centre Act 38 of 2001 or FICA is a legal framework which exists to help identify the proceeds of unlawful activities and to combat activities related to money laundering, terrorist financing and tax evasion.  Property practitioners and attorneys have an obligation to comply with FICA as they are designated as accountable institutions in the Act.

FICA requires that we must collect documentation to identify and verify our clients and then conduct our due diligence to enable us to make an assessment whether there is something suspicious in regard to the parties or the transaction. If there is, we are obliged to make a report. 

What I think the general public finds irritating with this part of the process is that they need to give us all the documentation we may have to request for.  For example, if the party transacting is a trust, we must get the required documents pertaining to each trustee and beneficiary.  If the party is a company, we must establish who is the beneficial owner of the company, which includes shareholder information in order to establish who is the beneficial owner of the company - the live, warm body at the end of that company. All of that involves a lot of administrative work and document requests which property practitioners, attorneys and the general public find to be a tedious process. There are no shortcuts. People tend to misunderstand this but FICA compliance is non-negotiable and property practitioners and attorneys must comply or be fined by the FICA authorities. 

Would you say sentiment has an effect on the Real Estate market?

Absolutely! My view is that sentiment drives the market more than anything. The question is, do you feel good enough about the economy and the government to actually now invest your money into long-term investments? 

We have seen the impact of negative sentiment. When load-shedding started, we saw an immediate decline in our workload.  When  load-shedding ended, with the formation of a government of national unity, we saw an immediate uptick in property transactions as with reduced interest rates.

I think we've covered pretty much everything, Marius, but if anyone has a query to do with property-related matters and need some legal advice, can they get in touch with you? Are you  available to answer questions from property practitioners or buyers and sellers?

Yes, with pleasure. I try to make that my thing, making myself available to answer questions from property practitioners or buyers and sellers. 

You accepted this invite, so we know you are accessible.  Thank you, and thanks for joining us today. 

Yeah, great pleasure. Thank you for having me.

Should you have any further queries you can reach Marius van Rensburg at the HBG Schindler's Advocates at their Third Floor, 3 Melrose Boulevard, Melrose Arch, 2076.  Or contact him on 011 568 8500 or info@schindlers.co.za.

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This article is intended to provide insights into the conveyancing process based on a recent interview. While the information is shared in good faith, it is important to remember that individual circumstances may vary. We encourage readers to consult a qualified professional for specific legal advice tailored to their needs.