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COMMON CHALLENGES IN THE CONVEYANCING PROCESS

Conveyancing, the legal process of transferring property ownership from one party to another, is a crucial aspect of the real estate industry in South Africa. While the process is essential for facilitating property transactions, it does at times presents a few challenges and complexities. In this article, we’ll explore some of the common issues and hurdles that can arise during the conveyancing process.

 

1. Title Deed Issues:

One of the primary challenges in conveyancing relates to lost title deeds and / or discrepancies. Title deeds are legal documents that prove ownership of a property. Issues such as missing title deeds, conflicting information on deeds, or interdicts over the property can significantly delay the conveyancing process. Resolving these issues often requires thorough investigation and legal processes to be followed.

 

2. Outstanding Municipal Debts:

Another common challenge is dealing with outstanding municipal debts associated with the property. Buyers may encounter difficulties if the seller of the property has unpaid rates or utility bills. Or the Seller does not have enough funds to pay the rates and utilities in advance as required by the municipality. Conveyancers must ensure that all municipal debts are settled before the transfer of ownership takes place.

 

3. Property Encumbrances:

Property encumbrances, such as servitudes, restrictive conditions, or existing mortgage bonds, can complicate the conveyancing process. Servitudes, for example, grant certain rights or restrictions over a property to third parties. Restrictive conditions require consent from external third parties to transfer the property. Depending on who the third party is, this may be a cumbersome process. Resolving encumbrances requires careful examination of property records and may involve negotiations with affected parties to secure consent for the transfer.

 

4. Delays in Documentation:

Delays in obtaining the necessary documentation can also pose significant challenges. This includes delays in obtaining FICA documents from clients, clearance certificates from the municipality, compliance certificates (such as electrical or entomology certificates), or obtaining necessary approvals from relevant third parties referred to in the previous paragraph. Any delay in documentation can prolong the conveyancing process and frustrate both buyers and sellers.

 

5. Financial Constraints:

Financial constraints, in the form of either party having to apply for finance to cover costs related to the transfer. Financing delays in relation to the purchase price may be experienced if the sale is subject to the sale of a prior property and / or transfer costs to be paid from the proceeds of the prior sale. Many Sellers are not aware that the municipality require the payment of all rates and utilities 3 (three) months upfront. This amount can be too high for the Seller to pay, in which case the Seller would have to apply for bridging finance which might cause delays depending on which financial institution is instructed.

 

6. Fraud and Scams:

In an increasingly digital world, conveyancing transactions are vulnerable to fraud and scams. Cybercriminals may attempt to intercept communication between parties, impersonate legitimate parties, or misdirect funds during the transaction process. Conveyancers must implement robust security measures and exercise diligence to safeguard against fraudulent activities.

 

7. Legal and Regulatory Compliance:

Compliance with legal and regulatory requirements is paramount in the conveyancing process. Failure to adhere to legislative requirements, such as the Deeds Registries Act, Alienation of Land Act, Sectional Titles Act, Protection of Personal Information Act, the Consumer Protection Act, or the Financial Intelligence Centre Act (FICA), can result in legal complications and potential voiding of transactions. Conveyancers must stay abreast of evolving regulatory frameworks to ensure compliance.

 

The conveyancing process is beset with various challenges and issues, ranging from title deed discrepancies to financial constraints and regulatory compliance. Navigating these complexities requires expertise, diligence, and effective communication between all parties involved. By understanding and addressing these common challenges, conveyancers can facilitate smoother property transactions and mitigate risks for buyers and sellers alike.

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