The Deeds Registries Act and the conveyancing practice that flows from it are sometimes referred to as an “exact science” that hasn’t changed much over the years.
There is also the long-standing joke made by non-conveyancing attorneys (more specifically litigation attorneys) that conveyancers only have to stay sober until 11h00 when they have registered their deeds, and their conveyancing secretaries have finalized the accounts for the sellers and purchasers for the registrations of that day.
Jokes aside, the conveyancing industry has not seen major changes to the laws governing conveyancing practice over the last number of years. The changes have rather been in the practical execution of functions and the implementation of electronic applications for supporting documents.
When I started registering deeds at the Cape Town deeds office in 1993, there was a practice in place that was peculiar to Cape Town. In the rest of the country, money would be exchanged on registration of transfer of properties by way of bank guarantees issued by the bank registering the purchaser’s new bond to settle the amount required by the seller’s bank to cancel his existing bond.
This process of getting bank guarantees issued was both cumbersome and time consuming. It required the transferring attorneys to request cancellation figures from the existing bondholder, then to submit these cancellation figures to the attorneys registering the purchaser’s new bond and requesting them to issue bank guarantees in favour of the existing bond holder. On receipt of these guarantees, they would then forward them to the attorneys attending to the cancellation of the seller’s bond, with a request to obtain the bank’s consent to cancellation of its bond.
The banks were extremely strict on the wording of these guarantees and any mistakes in the property description, the names of the buyer and seller or the figures, dates or interest rates reflected in the bank guarantees, no matter how small, resulted in the guarantees not being accepted, and the whole process started afresh.
In addition to the bank guarantees having to be meticulously checked beforehand, they then on the date of registration of the transaction had to be presented to the bank that issued them in exchange for a cheque that in turn had to be deposited before close of banking at around 15h45. The bank guarantees all had a clause providing that they could not be presented for payment before a certain time (sometimes as late as 15h00) which resulted in some nervous articled clerks doing their stint in the conveyancing department frantically rushing from the banks where the guarantees paid out to the firm’s bank where the proceeds had to be deposited.
Cape Town had a system in place unique to Cape Town that prevented all this rushing around getting guarantees presented and cheques deposited.
In Cape Town, conveyancers simply gave each other undertakings to settle a certain amount on date of registration by means of a trust cheque. In effect, this meant that the day prior to registration of a transfer, the transferring attorney would establish from the attorney cancelling the seller’s bond the amount required to cancel the seller’s bond and would leave for the deeds office with a trust cheque for that amount that morning. In addition, the transferring attorney would have a further cheque in settlement of the cancellation costs of the attorney cancelling the seller’s existing bond. The attorney registering the purchaser’s bond would likewise leave for the deeds office with a trust cheque for the proceeds of the purchaser’s bond.
Although the trust accounts of transferring attorneys were technically in debit on the morning of registration, this system worked well despite the fact that transferring attorneys paid out money that they didn’t hold in trust at that stage. For the system to work, conveyancers had to be able to rely on each other. For outsiders not familiar with the system, it must have seemed strange to see all the conveyancers exchanging cheques with each other but it also lead to some amusing moments.
The execution room was on the 12th floor of the building in Plein Street and, on one particularly hot day, someone unexpectedly decided to slide open a window. The sudden rush of wind into the room blew cheques all over the place and it took the conveyancers quite some time to sort it all out and return the cheques to their rightful owners.
An area of conveyancing practice that has changed for the better is the electronic applications and issuing of transfer duty receipts and rates clearance certificates.
When I started practicing, these documents had to be manually applied for and issued at the offices of SARS and the local authorities respectively. This led to backlogs that added to delays in the registration process.
During the switchover to electronic applications, initial teething problems caused even further delays of weeks and sometimes even months. Since these initial problems have been ironed out, a transfer duty receipt can, in certain circumstances, be obtained on the same day that the application is made if the documents are all in order and a rates clearance can be issued a few days after payment of the outstanding rates have been made.
For a long time, there has been talk of electronic lodgement and registration of deeds but if and when this will be implemented is still unclear. The person that was the main driver behind this has since retired and security issues around an electronic deeds registration system remain problematic.
Thinking about electronic registrations reminded me of an unusual situation I had with a registration a few years back.
An uncle had stood surety for his niece and when she defaulted on her bond repayments, he was forced to purchase her property to prevent the bank from foreclosing and selling the property in execution.
The uncle was also an attorney, and the arrangement was made that on the morning of registration his clerk would meet me at the deeds office to hand over his firm’s trust cheque in settlement of the purchase price. On the morning of registration, I received a phone call to inform me that the niece had vacated the property the previous day but had left two vicious dogs behind which she would collect that day. The clerk was accordingly sent to the deeds office with the trust cheque but with instructions not to hand the cheque to me until the uncle had confirmed to him that the dogs had been removed and that he could get vacant occupation.
At the deeds office, I explained my predicament to the Assistant Registrars and although they were initially amused, as the morning dragged on, they became slightly agitated, every now and then asking me “Have the dogs gone?”
When at last I could give them the news that the dogs had been removed there were shouts of “Yeah!! Now let’s register and go to lunch!”
Raymond Scott
Senior Associate
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