Guidelines on Transfer Process

1. Transfer of Title Deeds

These sales must be handled by a legal practitioner and involve the cancellation of one Deed, and the issue of a new one. Also may involve cancellation of a mortgage or caveat over the property. This ensures that all the monies owing against the property are properly repaid by the Seller, prior to transfer to new owner. The Lawyer will require the Agreement of Sale and instruction from the Seller to proceed. Also needed is the original Title Deed. Once this is checked the parties will be asked to sign declarations & Powers of Attorney etc, then the Purchaser will pay the transfer costs to the Lawyer.

These costs include Government stamp duty, registration fees & sundry costs which amount to approximately 8% of the purchase price. The Lawyer will also obtain Rates clearance and the Purchaser will be given a rates figure to pay. This is of course credited to his rates account.

The Seller will also be asked to obtain a Capital Gains tax Clearance Certificate, and most Lawyers will assist & advise on this. The minimum requirement now is 15% Withholding Tax and in certain cases the Lawyer can issue guarantees of payment once funds become available. This is accepted by the Deed's Office. Capital Gains Tax is a subject on it's own & Sellers are advised to make themselves familiar with this. Owner's aged 59yrs and over, and selling their principal residences are now (since Jan 05) exempt from this tax but do check carefully that you qualify.

The whole transfer process on a straightforward sale is around three months but, however, parties can help by paying the costs & getting all the necessary documents to the Lawyers as quickly as possible. Each sale is unique therefore a specific time cannot be assessed. Lost Title Deeds are a real problem & costly process to replace plus taking time. This again has to be done by a Lawyer.

The Lawyer will never submit the file to the Deed's Office for transfer until he has secured the full purchase price either by holding the funds in a Trust Account or a guarantee for payment upon transfer. If funds have been paid direct to the Seller, then he must confirm this in writing. This is to safeguard both Seller and Purchaser, and ensure that once the sale is registered then funds are freely available to the Seller - & the Purchaser has the Title Deeds to confirm ownership.

Our advice to Sellers is to have the Title Deed available with a copy for any Agent helping you. The Purchase Agreement is also very useful. Your ID number is required. Tenanted properties are more complicated, and involve giving the proper legal notice to the tenant. This should be given by the new Owner in most cases.

As can be seen selling property is complex, and a bit of time spent finding out how it all works will prevent a lot of wasted time and heartache.



2. Sale of Sub- divided Property

A sub division is formed when a piece of land under one Title Deed is divided into portions, and they are then sold off. This is a long and costly process, and no sub- division can be sold until the property has been surveyed & a proposal diagram of the sections is approved by the Surveyor General. The Owner will then receive a letter of approval to sub- divide, setting out the conditions of the sale. These include an endowment payment to Council, provision of road access and services. Transfer to new owner will not be registered until these conditions have been met either by the Seller or Purchaser. The whole sub- division process can take well in excess of six months.

3. Sectional Title

This is mainly applicable to Flats when each flat in a block is held by different owners. The first Title Deed for the entire block and piece of land has been divided into separate flats and can include a piece of land as well. The original owner then sells Shares in the holding company, and these are properly registered in the Deed's Office & Owner's hold their own Title Deed. These may be used for mortgage loans, Bank collateral etc. Registration of a Sale and change of Title Deed needs to be done through Legal Practitioners as previously described.

4. Share Transfer

There are some properties (mainly flats) that can be purchased by buying shares in the Company that owns the property. This is very quick and does not involve Legal Practitioners & Deed's Office. Therefore the saving on transfer costs is substantial. To buy Shares an Agreement of Sale of Shares is signed plus an application to transfer the Shares from Seller to Buyer. The Seller must furnish the original Share Certificate, the Owners Constitution and details of Owner's Association. The Purchaser should be aware of all the details & will receive a copy of the Constitution. The Seller will need to obtain a Capital Gains Tax Certificate and a new Certificate cannot be issued until this is provided to prove payment of the Tax.

As no Lawyer is involved it is always wise to have an Accountant handle the deal and particularly to safeguard funds. Basically it becomes a swap - the new certificate to purchase in exchange for the purchase price to the Seller.

A Share Certificate is as important as a Title Deed & must be kept somewhere safe and secure, but cannot be used to obtain Mortgage Loans. A small fee may be charged by the Accounting Firm to issue new certificates but this is much lower than a transfer through Deed's Office & a lot less complicated and time consuming.



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