TYPES OF TITLE DEEDS

Sectional Title Deed

A sectional title deed is a title deed whereby the property owned consists of a section of a building together with an undivided share in a common property. For example owning an apartment in a building entitles you to a sectional title deed, as you do not own the entire building but only a portion of it.

 

Full Title Deed

A sectional title deed is a title deed where the property is owned fully on a specified piece of land, and on that land no one else owns any other property on it, therefore the property is not shared. For example, owning a house or a building wholly entitles you to a full title deed.

The deeds registry is open to any member of the public to also access information about:

  • The registered owner of a property
  • The rules surrounding a particular property
  • Interdicts and contracts involving the property
  • The purchase price of the property
  • Rules of a sectional title scheme
  • A copy of an antenuptial contract, deeds of servitude, mortgage bonds, etc.
  • A copy of a sectional title plan or the rules of a Sectional Title Scheme (note: this is not a certified copy, merely a copy for information purposes)
  • Township establishment conditions
  • Information relating to a property or deed
  • Information relating to the tracking of a deed through the registration process

Using an escrow account is the simplest way to handle the financial aspects of property sales. It’s a vital component of concluding a successful transaction.

 

An escrow account is:

  • An arrangement where a third party holds on to funds and key documents involved in a property sale, and then distributes them according to the agreement between the Buyer and the Seller.
  • A contractual agreement where a third party receives and distributes funds or documents for the primary transacting parties, with the distribution of money dependent on the agreed upon conditions by the transacting parties.
  • An account established by a broker (agent) for holding funds on behalf of the broker’s principal or some other person until the consummation or termination of a transaction.
  • A trust account held in the borrower’s name to pay obligations such as property taxes and insurance premiums

Using an escrow account means the Buyer and Seller don’t exchange money and documents directly with each other, but its done through the escrow account. Using an escrow account ensures accountability and that all parties receive what is due to them in time.

 

The Escrow Process

An escrow account is opened when the Buyers put up a deposit to show the Sellers that they’re serious about buying the home. An escrow officer is assigned to the account.

 

An escrow officer does the following:

• Holds funds and documents.

• Processes and facilitates the flow of documents and funds.

• Keeps all parties informed of progress.

• Responds to the lender's requirements.

• Secures a title insurance policy.

• Obtains approval of reports and documents from all parties.

• Prorates and adjusts insurance, taxes, rents, fees, etc.

• Records the deed and loan documents.

• Keeps track of and holds onto money owed and money deposited.

• Escrow closes when all the tasks, documents and funds are performed or secured by the escrow officer.

Buyer And Sellers Role In Escrow

In order for the transaction to reach a close both the Buyer and the Seller must do their respective parts to keep the transaction moving.

 

The Seller: Carry out all escrow transactions, provide the deed through the escrow officer, submit all other required paperwork as outlined in the purchase and sale agreement (i.e. insurance policies, home warranties, tax receipts, etc.)

 

The Buyer: Submit a down payment and any other funds required, carry out all escrow instructions, approve inspection reports, preliminary title reports and other items detailed in the purchase and sale agreement, execute a deed of trust to secure the loan.

 

 

Title Insurance

Title insurance protects against financial loss coming from problems found in a property’s title  or legal ownership. A thorough title search should turn up any problems or issues that could arise.  Title insurance covers the structure of the property but not the furniture in the property. An insurance company is chosen by the Buyer, the insurance cost can be an average of 7% of the property’s value.

 

 

The insurance can cover:

  • Improperly recorded deeds
  • Forgeries or impersonations
  • Undisclosed easements or use restrictions
  • Errors in legal paperwork
  • Fire, lighting, or explosion
  • Earthquake
  • Storm, tempest, flood
  • Damage due to civil unrest, riots or strikes
  • Aircraft or other aerial devices crashing or dropping