The Hidden Costs… | Free Transfer and Bond Cost Quotation | South Africa
ITEM |
AMOUNT |
FICA Verification |
R250.00 plus VAT |
Deeds Office Search |
R100 plus VAT |
Contribution toward rates/levy clearance |
R1 500 |
Postage and petties (sundry expenses) |
R700 plus VAT |
ITEM |
AMOUNT |
Initiation fee |
R4000.00-R5000 |
Valuation fee |
R1300 |
FICA Verification |
R250 plus VAT |
Deeds Office search |
R100 plus VAT |
Postage and petties (sundry expenses) |
R250 plus VAt |
Few things are as annoying as having been given an indication of transfer fees and bond costs only to discover later that there are other costs that nobody has mentioned to you before. I will attempt to lift the veil of the hidden transfer and bond costs in South Africa for the purchaser of a residential property.
Most agents and attorneys use a Table of Transfer and Bond Costs that has originally been issued by the Law Society. It is important to bear in mind that the Table merely serves as a recommended guideline. The attorneys may deviate from it. Sometimes attorneys may decide to give a discount where a number of similar instructions were received at more or less the same time, for example four or five transfers between the same parties in one sectional title scheme. At other times, the attorneys may wish to charge more than the tariff where additional work had to be done.
Sometimes purchasers confuse transfer duty and transfer fees. They have heard that no transfer duty is payable if the purchase price is below R1100 000 When they find out that they still have to pay transfer costs they are surprised and sometimes annoyed. The reason is that there are still fees and costs payable to the attorneys because they are entitled to remuneration for their services and the other costs and expenses are still in place. It is only the transfer duty payable to SA Revenue Services that has fallen away, if the property value is below R1100 000.
Even where the attorneys stick to the recommended tariff mentioned above, you may find that there are extra’s that you have not been informed about. This is not because of anyone’s dishonesty but simply because there is not enough space on the one page used for the Table of Costs to reflect all the possible costs items and secondly because the Law Society does not prescribe the suggested costs for these other items.
What are these other transfer costs? Well, they are usually small items, but if you add them up they can make a marked difference. Here follows a list of typical extra’s with their average fee (which may vary from firm to firm):
Most agents and attorneys use a Table of Transfer and Bond Costs that has originally been issued by the Law Society. It is important to bear in mind that the Table merely serves as a recommended guideline. The attorneys may deviate from it. Sometimes attorneys may decide to give a discount where a number of similar instructions were received at more or less the same time, for example four or five transfers between the same parties in one sectional title scheme. At other times, the attorneys may wish to charge more than the tariff where additional work had to be done.
Sometimes purchasers confuse transfer duty and transfer fees. They have heard that no transfer duty is payable if the purchase price is below R1100 000 When they find out that they still have to pay transfer costs they are surprised and sometimes annoyed. The reason is that there are still fees and costs payable to the attorneys because they are entitled to remuneration for their services and the other costs and expenses are still in place. It is only the transfer duty payable to SA Revenue Services that has fallen away, if the property value is below R1100 000.
Even where the attorneys stick to the recommended tariff mentioned above, you may find that there are extra’s that you have not been informed about. This is not because of anyone’s dishonesty but simply because there is not enough space on the one page used for the Table of Costs to reflect all the possible costs items and secondly because the Law Society does not prescribe the suggested costs for these other items.
What are these other transfer costs? Well, they are usually small items, but if you add them up they can make a marked difference. Here follows a list of typical extra’s with their average fee (which may vary from firm to firm):
The FICA verification has to do with compliance with the Financial Intelligence Centre Act, 38 of 2001, which requires from the attorneys to verify the identity and address of the parties and in the case of the purchaser, the source of funds for the transaction.
The Deeds Office search is usually an internet search to verify the details of the property and the existence or not of bonds and interdicts related to the property.
The contribution towards rates/levy clearance needs to be explained. It will apply where a municipality or body corporate expects the conveyancers to do the appropriation or splitting of amounts payable. Usually in terms of the Deed of Sale (Offer to Purchase) the Seller will pay rates and taxes until date of registration of transfer and the Purchaser will be liable for the rates and taxes as from the date of registration. The Attorney has to pay rates and taxes or levies upfront for a couple of months in advance in order to get a valid clearance certificate from the municipality or body corporate. Since the attorney does not know beforehand the date of registration he can only estimate the amount that will be payable by the purchaser. These are strictly speaking not legal costs but a payment in advance on the rates account, which should appear as a credit on the next rates and taxes or levy statement.
There are likewise usually additional costs for bonds that do not appear on the Table of Costs:
The Deeds Office search is usually an internet search to verify the details of the property and the existence or not of bonds and interdicts related to the property.
The contribution towards rates/levy clearance needs to be explained. It will apply where a municipality or body corporate expects the conveyancers to do the appropriation or splitting of amounts payable. Usually in terms of the Deed of Sale (Offer to Purchase) the Seller will pay rates and taxes until date of registration of transfer and the Purchaser will be liable for the rates and taxes as from the date of registration. The Attorney has to pay rates and taxes or levies upfront for a couple of months in advance in order to get a valid clearance certificate from the municipality or body corporate. Since the attorney does not know beforehand the date of registration he can only estimate the amount that will be payable by the purchaser. These are strictly speaking not legal costs but a payment in advance on the rates account, which should appear as a credit on the next rates and taxes or levy statement.
There are likewise usually additional costs for bonds that do not appear on the Table of Costs:
