INTRODUCTION

The steps taken after receipt of an instruction from the bank and prior to registration of a mortgage bond vary from transaction to transaction, there are however certain steps which are uniform depending on the type of bond instruction and we set these out below, together with a brief explanation.  This is not intended to be an exhaustive resume of all procedures in every transaction but is intended simply as a guideline.

BOND CONDITIONS

When the Banks instruct Attorneys to register a mortgage bond, the instruction is accompanied by various bond registration conditions.  The Attorneys should provide a copy of these conditions to the client.  It is of great importance that clients peruse and assist the Attorneys with the fulfillment of these conditions to avoid unnecessary delays as the Attorneys are not permitted to register any mortgage bond until such time as all conditions have been completely fulfilled.

FICA REQUIREMENTS

In terms of the Financial Intelligence Centre Act, the Banks are required to FICA all clients.  Attorneys are also accountable institutions in terms of this legislation and also have the obligation to FICA all clients.  Attorneys are mandated and obliged by the Banks to collect the FICA information on behalf of the Banks.

It is a registration policy of most banks that a matter may not be registered in the Deeds Registry (and in some cases may not be lodged in the Deeds Registry) before the Attorneys have sent to the Bank the certified copies of the clients FICA documents and received the Banks consent to proceed further.  The Banks are very particular on this issue and regard the obligation as most serious.  Clients are encouraged to provide the necessary information in order to avoid delays.

SWITCHING BONDS

A switching bond is where a client has a bond with another bank and wishes to cancel that bond and change to a new bank.

The procedure here is that the first registered bond needs to be cancelled and the new bond registered.  These two registrations take place simultaneously in the Deeds office.

The Bond Attorneys will require the current bond account number to obtain cancellation figures from the existing bank.  The existing bank will instruct an attorney on their panel to attend to the cancellation of the registered bond on their behalf and will send them the relevant title deeds and bond/s together with cancellation figures.

Should the bank not be in possession of the title deed and/or mortgage bond/s registration copies will have to be obtained from the relevant deeds office which may take some time. On receipt of copies of the title deed the Bond Attorney will be in a position to prepare your documents for signature.

Clients should be aware that on average an amount of R1 300.00 is charged per bond cancellation but this amount varies according to the amount of the bonds being cancelled. This fee will have to be paid by the client unless the bank taking over the existing bond agrees to cover such fees.

If the registered bond contains an access facility and the client wishes to draw funds from the account, the client should advise the Bond Attorney of same as early as possible as from the moment the cancellation figures are issued the registered bond account will be frozen and there will be no access to the relevant funds. 

In terms of the National Credit Act Banks are entitled to 90 days interest in lieu of notice.  Should this notice not have been given, the client will have to wait a period of 90 days for the time period to expire, whereafter the Bond Attorney shall proceed to cancel and register the new bond.

During the above process the client will be required to continue to pay the monthly bond installments. This money is however not lost and the bank will refund post registration any monies received in excess of the cancellation amount.

On receipt of the cancellation figures and copies of the bonds the Bond Attorney will prepare the documents for signature. Once these bond documents have been signed guarantees will be issued. Guarantees will then be sent to the cancellation attorneys and the bond documents will be prepared for lodgment and for submission to the bank in question.

NEW BONDS

A new bond registration takes place where a Purchaser purchases property and a mortgage bond is to be registered as a first bond to finance the purchase price.

On receipt of a new bond instruction the Bond Attorneys will advise the Transferring Attorneys of the amount available for guarantees and will simultaneously request a copy of the title deed and their guarantee requirements.

Once the Bond Attorneys are in receipt of the draft deed the documents are prepared for signature. Once the documents have been signed the Bond Attorneys issue guarantees and send them to the Transferring Attorneys. The Bond Attorneys further prepare the bond documents to be sent to the bank and the deeds office.

The Bond Attorneys then await an instruction from the Transferring Attorneys that they are ready to lodge in the deeds office.

FURTHER LOANS

A further loan is one where the owner of property already has a bond registered over the property and is now loaning further funds from the bank who is the bond holder in respect of the first bond.  The further mortgage bond is registered as a second (or third or fourth etc) bond to secure the further loan by the bank to the owner of the property.

On receipt of a further loan instruction the Bond Attorney will request the title deed from the bank as the original deed needs to be lodged in the deeds office for endorsement. In the interim documents are prepared for signature. Once the documents are signed and the Bond Attorneys are in receipt of the title deed from the bank the matter is lodged in the Deeds Office and the balance of the documents are sent to the bank.

WEBSITE DISCLAIMER: Save for the contents of this disclaimer, the content of this website is provided for general information purposes only and should not be construed as, and does not constitute, legal or other professional advice. To the extent that you wish to place reliance upon any information contained on this website, you do so totally at your own risk and we accept no responsibility for any loss or damage whatsoever, howsoever arising. In addition, the hyperlinks provided on this website are provided for convenience only. We make no representations or warranties whatsoever in respect of the accuracy, completeness and/or reliability of any information, opinions, data and/or content provided on such linked website, nor do we endorse or take any responsibility for the content of any such linked website.