What is a Bond Registration?
These bonds are debt securities issued by the South African government to raise funds for various public projects, infrastructure development, and other essential initiatives.
Bond Registration In South Africa
WHAT IS INVOLVED IN THE BOND REGISTRATION PROCESS IN SOUTH AFRICAN LAW?
Several people are involved in the bond registration process; the buyer, the seller, the estate agent, a transferring attorney, a bond attorney, and a cancellation attorney. In some instances, one attorney is responsible for the entire process. The seller appoints the transferring attorney who ensures the transfer of the property to the buyer’s name. The bank in charge of the buyer’s bond selects the bond registration attorneys. The bank in charge of the seller’s bond appoints the cancellation attorney.
PM Attorneys specialize in helping clients with the registration and cancellation of all types of bonds. These may include mortgage bonds, surety bonds, collateral bonds, and notarial bonds. PM Attorneys’ bond registration and cancellation team has vast experience assisting clients throughout the bond registration process, including preparing draft deed documents for signature, advising on bond registration costs, and more.
A mortgage bond is registered when purchasing an immovable property and applying for a loan from a financial institution or a bank. Below is a guideline for the process of bond registrations:
- A buyer decides to purchase immovable property. Both the seller and buyer sign an offer to purchase. The offer to purchase contains the terms and conditions of the sale of the property. This document is required to apply for a loan at a bank.
- Once the purchaser’s loan application is approved, the bank appoints a bond registration attorney to register a mortgage bond over the property as security for the bank.
- The bond attorney liaises with the transfer attorney agreeing to provide guarantees for the property’s purchase price. The bond registration documents and the property transfer documents are registered simultaneously at the Deeds Registries Office. Registration takes approximately six weeks after the bank approves the loan.
The transferring attorney requests a signature from the buyer and the seller on the transfer documents for the property. The transferring attorney appointed by the seller obtains the title deed and bond cancellation figures of the property. The attorney approaches the bank for the property’s title deed and cancellation figures. The municipality supplies a statement of rates and taxes. On receiving the guarantee of the outstanding amount, the cancellation attorney cancels the seller’s home loan. The transferring attorney then pays the transfer duty, rates, and taxes.
The bond registration attorney gets the purchaser to sign the Mortgage Loan Agreement and all other documents required by the bank. The bond attorney is responsible for lodging the mortgage documents at the deeds office. The office takes about three weeks to issue the clearance rates after the attorney has lodged all the documents.
The transferring attorney contacts the buyer to confirm the ownership of the property. The bank pays out the loan on registration following the guarantees issued. The bank also informs the purchaser of the monthly repayments.
How much does bond registration cost in South Africa?
| Bond Capital Amount | Registration Costs |
|---|---|
| Exceeds R8 000 000 but does not exceed R10 000 000 | R2 854 |
| Exceeds R10 000 000 but does not exceed R15 000 000 | R3 397 |
| Exceeds R15 000 000 but does not exceed R20 000 000 | R4 080 |
| Exceeds R20 000 000 but does not exceed R30 000 000 | R4 755 |