Sale, divorce & inheritance: What to know these 3 property transfer types

When ownership changes on a residential property the reason for it is typically because the property has been sold, the co-owners are parting ways - mostly often a married couple going through a divorce - or there's a transfer necessitated by an inheritance. 

"Each of these property transfer scenarios are handled slightly differently, and it's important to note the nuances of each and work with a professional  estate agent and a good conveyancing attorney to guide you through the process," says Michelle Cohen, Principal at Leapfrog Johannesburg North East. 

Cohen shares insights and advice on three of the most common kinds of transfer, highlighting what needs to be taken into consideration. 

Transfer through sale 

It goes without saying that a transfer of ownership is involved when a property is sold. Property transfers through the sale of a property, whether a full title  or sectional title property, adhere to the terms laid out in the Offer to Purchase (OTP). 

Cohen explains that conveyancing attorneys appointed to manage the transfer will review the terms and conditions laid out in the OTP and draft transfer documents based on this information. The transfer documents are then signed by both the buyer and the seller, and it's crucial that both parties understand, and are comfortable, with the contents of the document. 

Additionally, the transfer attorney will request the settlement figures for the bond from the seller's bondholder (bank), arrange rates and levies clearance from the relevant municipality and the home owners association or managing agents if a sectional title transfer.  The seller is responsible for these payments and only after settlement will the necessary clearance certificates be issued. 

The transferring attorney will also obtain guarantees from the buyers bond registration attorney in order to secure the purchase price.

The transferring attorney will also call for the transfer duty receipt from SARS if the purchase price is over R1 100 000.   

"All these conditions must be adhered to in a satisfactory manner before the transfer can be logged at the Deeds Office. Then, once registration has taken place, final payments will be made and the property will officially change hands," Cohen says. 

Transfer through divorce

Divorce is a common reason for a property transfer and it's useful to note that the divorce order and settlement agreement determines which spouse the property is awarded to and who will be responsible for the settlement of the bond, where applicable. 

Cohen explains that, in terms of the Transfer Duty Act, divorce transfers are exempt from transfer duty, but it is crucial that a transfer duty exemption certificate is obtained from SARS that states the terms of the particular transfer. 

The two parties involved -  the spouses - then need to obtain independent valuations from two different estate agents to indicate the fair value of the property for the purpose of obtaining the transfer duty exemption certificate from SARS. 

In the case of couples married in community of property, whilst the spouses own an undivided half share in law, they should still regulate the property ownership in a divorce settlement agreement and go through the process of transferring a half share. The transfer of the half share is exempt from transfer duty. 

Transfer duty exemption is applicable to all marital regimes and civil unions.

Transfer through inheritance 

When a property transfer results from a deceased estate, the heir to the property will be subject to the terms in the deceased individual's last will and testament. If there was no valid will at the time of passing, the terms of the Intestate Successions Act will apply. 

In either event, the transfer may only take place once the Liquidation and Distribution Account has been approved by the Master of the High Court and has laid open for 21 days. Furthermore, the Master of the High Court must confirm that no objections have been lodged against the intended transfer of the property.

It is only once the conditions outlined above have been satisfied, the transfer documents can be drawn up by the transfer attorneys and transfer duty exemption certificate may be obtained from SARS. 

Lastly, the bond settlement, rates and levies clearances figures will also need to be obtained by the transfer attorneys so that the executor of the estate can make arrangements for payment or arrange for settlement otherwise stipulated.