Make sure you are scrutinising your Title Deeds
Title Deeds prove who the legal and registered owner of a specific property is and in addition to describing the location and type of property, details what rights and limitations the specific property offers.
When you apply for a mortgage bond, this will be registered against your Title Deeds at the Deeds Office and will be binding until such a time that you repay your home loan and the bank issues an instruction to remove the bond.
Why scrutinise your Title Deeds?
Let’s face it, terms and conditions are painful to go through and fine print is frustrating. Who truly feels like squinting for that long before signing the offer to purchase on your first home? My point exactly.
Contracts come with so much legal jargon and half the time we’re just nodding in agreement to speed up the process. But it’s become an extremely necessary task to read one’s Title Deed, no matter how tedious it might seem.
What is a Title deed?
A title deed is a legal document that proves ownership of a property or piece of land. As with all financed items, leased or bonded, the legal documents remain in the possession of the lender until such time that the homeowner has settled the home loan and it gets transferred into his name. So, in this case, the bank holds tightly onto those Title Deeds until completion of the bond repayment. The moment the bond is settled, the home can be transferred into the new and very excited home-owners name. That is when the Title Deeds are handed over.
If there happens to be any property burdens or obligations to the property, these will all be listed in the Title Deed. Since it’s legal, there’s always a lawyer involved and, in this case, the lawyer will be used for any changes that need to be made. The lenders and co-owners have to agree on these.
A conveyancer will assist you in the transfer process and make sure that the home is securely in your name and the proof is in the writing, and the Registrar’s signature of course! Thereafter, the Deeds Office take possession of the Title Deed.
What does a Title Deed include?
There are a number of things included with the first and obvious one being a detailed description of the property, explaining its size, boundaries and exact position. The new owners name and South African ID number along with any others if it’s a joint ownership. Also included is the date of transfer and the purchase price of the property.
If there are any restricting factors of the sale, they will also be listed. Any restriction that applies to the purchase would then also be included. Lastly, an official Deeds Registry Office seal simply to show that the deed has been transferred and recorded in the name of the owner.
What happens when you buy a property using a home loan?
When you buy a property and make use of a home loan the bank or mortgage provider will register a bond over your property at the Deeds Office. This essentially allows the bank to secure the property legally while you repay the loan that you have taken out.
Once your repay the loan, the bank will issue an instruction to de-register or cancel the bond over the property. This is just a form security over a property and is completely removed once you've paid off the bond.
What is the importance of a Title Deed?
They serve to prove and keep as an official record of who owns the property stated on the document itself. When a buyer is looking to invest in a new property, then typically his lawyer will look into the Title Deeds to ensure that the seller is actually entitled to sell the property in question.
Title deeds will indicate whether there is an active bond on the property and this one might come as a surprise, but also who else might have expressed any interest in purchasing the property. Lawyers will also be able to determine quite easily if there are any boundaries on the property.
Where are the Title Deeds kept?
This purely depends on the status of the property. If there’s a bond on the property, the Title Deeds will be with the bank, if there isn’t, then it’ll be with the owner or the Deeds Office. The owner does have the right to ask a lawyer to keep it safely in a secure filing system for safekeeping. Which most people do.
Understanding property burdens
As mentioned earlier, these burdens are included in the Title Deed. There are a number of things that these burdens could be, but they are predominantly repairs and maintenance to the property, any restrictions on running a business from the property, information that might restrict owners to alter the property in any way, and lastly whether or not the owner has any rights over roads that directly cross the property.
Joint ownership of property
This is a key part of the Title Deed. When a property has more than one person that owns it, it absolutely has to be included. And in the case of two, the percentage of ownership per party should be included. The details on what would transpire if one of the parties on the Title Deed had to die also needs to be included under the survivorship section.
Title Deed changes
You might ask why one would need to change anything if it’s purely based on fact? However, there are reasons that include the potential of a co-owner wishing to sell or transfer their rights in the property, or if the owner wishes to do the same.
Lawyers are the only ones that can assist with changes and this service comes at a fee. If there is a bond, both parties must concur on all changes before they can be made.
What happens if you lose your original Title Deed?
In such a case you will have to make an application to the Deeds Office to receive a duplicate Title Deed and you will have to pay the associated fee.
I’m sure by now you have ascertained for yourself the importance of these title deeds. They’re there to prove ownership but also to protect the owner and allow for the owner’s rights over the property. Title Deed checks for purchase are a standard procedure to determine all the factual and contractual elements to the property.