APPOINTING A CONVEYANCER IN A PROPERTY TRANSACTION

The Conveyancer plays a pivotal role in a property transaction involving the conveyance of immoveable property from one person to another.  Briefly stated, the function of the conveyancer is to:

  • Ensure that the conditions of sale or other document establishing the right to claim conveyance of the property have been complied with
  • Ensure that all conditions of title applicable to the property are complied with , where relevant
  • Ensure that the provisions of any Law which might be applicable to the transaction are complied with (there could be, dozens of such laws which find application )
  • Assemble, collate and verify all the information required in order for him to correctly prepare the myriad of transfer documents required to convey ownership
  • Ensure that the full purchase Price is adequately secured before the date of conveyance
  • Ensure that all mortgages currently registered over the Property are discharged and formally cancelled on the date of conveyance
  • Ascertain, collect and pay to the relevant Local Authority the amount required to enable it to issue a Municipal Clearance Certificate. This amount will invariably be for the total arrear rates and Municipal service charges, the current amounts due, and provision for the estimated future amounts for four months in advance.
  • Calculate, collect and pay over to SARS the amount of Transfer Duty payable on the transaction, or alternatively collect and pay over the VAT due
  • Secure the relevant Entomologist Certificate of Clearance, the Electrical, Gas Appliance and Electric Fencing Certificates of Conformity and Compliance where applicable
  • Secure third party levy certificates or consents (For example, from Sectional Title Bodies Corporate or Homeowners Associations)
  • Prepare  and oversee the signature of the documents of conveyance, which are to be drawn in such manner so as to achieve the speediest conveyance of ownership , and which will deliver to the buyer a valid , effective title to the property
  • Lodge the documents with the Registrar of Deeds for examination, and , if found to be in order , ultimate registration in confirmation of the successful conveyance of the property ownership
  • The Conveyancer then doffs his accountant’s hat, and prepares an itemised account to the parties, recording the entire financial aspects of the transaction, and pays out in accordance therewith

It is clear from the very truncated description of the Conveyancing function given above , that the decision on which conveyancer is be appointed to attend to the work required , needs careful consideration . The question is, therefore, who appoints the Conveyancer, the Buyer or seller?

The first point to bear in mind is that the issue of the appointment of conveyance is as much a term of the deed of sale, requiring negotiation and agreement between the parties, as is the occupation date. That the Parties themselves are the sole determinators of which conveyance is to be appointed, is proven by the fact that a conveyancer, once appointed , and who does not attend to the required work to the satisfaction of the parties, may be dismissed by the parties  at their sole discretion, and another conveyancer must then be agreed upon and appointed . However, what is the position if the deed of sale is silent, which is evidence of no consensus between the parties on who should be appointed? Who then appoints the conveyancer?

The old 1906 Transvaal High Court case of James vs The Liquidator of the Amsterdam Township Company, was the first occasion on which this matter of appointment when the deed of sale is silent, was considered by our courts. The Transvaal court held that as it was the Seller who gave the Conveyancer a mandate to convey the ownership of the property, and then the Seller ought to appoint the conveyancer in the absence of provision therefore in the agreement. This decision was binding in the Province of the Transvaal, and, initially, all Provinces followed suit. This uniformity lasted until 1920.

In that year, the old Natal High Court, in the matter of Kathandran vs Arbuthnot, held that as it was the Buyer who paid the cost of conveyance, including the Transfer Duty Tax on the transaction, payable to the Revenue Authorities, then it was the Buyers prerogative to appoint the conveyancer when the deed of sale is silent.  This judgment was not followed by any other Province, all of which stuck with the James decision that it was the Seller’s right to appoint, whereas maverick Natal opted for the buyer.

Most property practitioners now agree that it is the Seller who should have the right to appoint in the absence of a provision therefore in the deed of sale. Virtually every preprinted Estate Agency deed of sale provides as such. This holds true for Kwazulu-Natal as well. In the view of virtually every role player in the property Industry, the 1920 Arbuthnot judgment has been abrogated (lapsed) by disuse, on the grounds that trade custom and usages, and the changing nature of the South African Property Industry, make it clear that the appointment should be made by the Seller .

The reasons commonly advanced for this view include:

*The person most likely to be tardy in complying with his obligations, thereby delaying the conclusion of the transaction, is the Buyer.

*Were the conveyancer to have been appointed by the buyer, he would be less likely to insist on punctual compliance by his client, than would a conveyancer who was appointed by the Seller.

*The Seller’s Conveyancer is more likely to ensure that the Purchase Price is fully and adequately secured within the stipulated time limits, than the buyers’ conveyancer. The latter might be induced to turn a blind eye to the Buyers non compliance, accepting his clients’ word, for example, that the Purchase Price would be paid in full on the date of conveyance.

*When there is a breach of his contractual obligation by the Buyer ( the most likely scenario ) , the sellers Conveyancer is far more likely to be prepared to serve Notice of breach on the Buyer , than would a Conveyancer appointed by the Buyer.

By: Andrew Fisher – Attorney, notary public and conveyancer

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