There is currently no legal framework in South Africa that mandates the common practice where the seller appoints the conveyancer, and the purchaser pays the transfer fees. However, this arrangement has become deeply embedded in South African conveyancing practice over many years, if not decades, due to a range of practical and legal reasons outlined below.

South African contract law grants parties the freedom to contract with whomever they choose, and to agree on the terms of that contract.

In property transactions, conveyancing involves the drafting and preparation of deeds and supporting documents for submission to the Deeds Office. These documents are prepared by a conveyancer, who is responsible for lodging and registering them.

It is important to note that conveyancing is a highly specialised field. By law, only an admitted attorney who has passed the national conveyancing exam may practise as a conveyancer. While transfer fees may seem high, they reflect the complexity of the process, and the precision required to ensure a valid and legally secure property transfer.

The conveyancing process involves multiple stakeholders, including (but not limited to) the seller, purchaser, SARS, municipalities, homeowners’ associations, body corporates, the Master’s Office, and lessees.

A conveyancer must navigate and apply various pieces of legislation to ensure that land registrations in South Africa are secure, compliant, and accurate. Key legislation includes:

• Deeds Registries Act 47 of 1937
• Sectional Titles Act 95 of 1986
• Sectional Titles Schemes Management Act 8 of 2011

There are good reasons why the seller should appoint the conveyancer:
a) The property is the seller’s asset, and appointing the conveyancer allows the seller to ensure that the transfer is handled correctly and without delay, and that the purchaser meets their contractual obligations.
b) If the purchaser were to appoint the conveyancer, it would create a potential conflict of interest, particularly if the purchaser fails to perform. This would place the seller at a disadvantage.

When a purchaser signs a Deed of Sale to buy a property, one of the standard terms is that the purchaser is responsible for all transfer costs related to the transaction. These include transfer duty, transfer fees, and disbursements.

Upon receiving the invoice from the transferring conveyancer, the purchaser should be able to distinguish between:
• Transfer duty payable to SARS,
• Disbursements payable to the Deeds Office, and
• Transfer fees payable to the conveyancer.

Disbursements to the Deeds Office are determined and gazetted annually in accordance with Section 9(9) of the Deeds Registries Act, 1937 (Act No. 47 of 1937). The approved fees are set out in schedules prepared by the Deeds Registries Regulations Board under Section 10 of the Act.

The transfer fees are a set of guidelines based on the value of the property, set out by the Law Society of South Africa. These fees are negotiable, which is highlighted in the guidelines.

Section 2 of the Transfer Duty Act 40 of 1949 provides for the imposition of transfer duty. Where applicable, this duty is payable by the party acquiring the property, namely, the purchaser.

The appointed conveyancer has no role in influencing their own appointment. In practice, the conveyancer only becomes aware of the transaction once the signed Deed of Sale is forwarded to them by the seller or the property practitioner, instructing them to proceed with the transfer.

It is well established that a contract only comes into existence once the parties have agreed on all the terms and conditions that create legal obligations. Both the seller and the purchaser have the opportunity to negotiate the terms before the agreement is finalised, and the purchaser may refer the agreement to their attorney for review before signing. If the parties cannot agree on the appointment of the conveyancer, no valid contract of sale will exist.

Should the seller appoint a property practitioner, the property practitioner will assist the parties with completing the terms of the agreement. It is assumed the property practitioner guides and explains the terms of the agreement to the purchaser and seller with a view to transparency and fairness; however, the parties can still refer the agreement to their own attorney for comment and advising their client of their rights and obligations in terms of the agreement. 

The conveyancer cannot retrospectively advise the purchaser of their rights and responsibilities other than informing the purchaser of when their obligations are due.

The best practice is for both the seller and purchaser to appoint their own attorneys to ensure that each party’s interests are independently protected.

Reference List: 
1. Deeds Registries Act 47 of 1937 
2. Sectional Titles Act 95 of 1986
3. Sectional Titles Schemes Management Act 8 of 2011

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