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TRANSFER OF IMMOVABLE PROPERTY IN ZIMBABWE

TRANSFER OF IMMOVABLE PROPERTY IN ZIMBABWE

Understanding the property transfer PROCESS

 

Immovable property is property that cannot be moved from one location to another. It is affixed to the earth and is incapable of being moved. Land and houses constitute immovable property. Sometimes people are confused as to how one acquires ownership rights over a house or land. In some instances, people assume that mere occupation of a property confers ownership rights to them. It is important for existing and aspiring property owners to understand the property transfer process.

 

Transfer is done by a specialised lawyer called a conveyancer. The transfer of legal title of an immovable property from one party to another is generally known as conveyancing. Conveyancing also includes the registration and cancellation of legal encumbrances such as mortgage bonds and caveats.

Acquisition of immovable property

Immovable property is acquired through various ways which include sales, donations, sheriff sales, inheritance and divorce transfers. The list is however not exhaustive. Property which is registered under a title deed is transferred by a conveyancer regardless of the method of acquisition. This article will outline the steps and procedures for a simple transfer of property.

“It is imperative for a prospective purchaser to acquaint oneself with the property that they intend to purchase”

 

Inspection of the property

It is imperative for a prospective purchaser to acquaint oneself with the property that they intend to purchase. A purchaser needs to inspect the property and be satisfied with the condition and state of the property. The agreement of sale of immovable property usually carries a clause that stipulates that the purchaser has inspected the property and is aware of its extent, boundaries, locality and its physical characteristics. A purchaser is therefore unable to renege from such an agreement after signing the agreement and having indicated that they have inspected the property and are aware of its physical state. Inspection helps to guard against “surprises” when a person eventually takes possession of the property. As an example, one might find that the plot that they purchased does not have any arable land but is a vast expanse of a mountain. A physical inspection therefore assists one in making an informed decision in property transactions.

Due diligence

It is encouraged that a purchaser conducts due diligence before a property purchase and legal representation is recommendable at this stage. Due diligence is the investigation of all factors that affect the transfer of the property to the purchaser. It is essential to verify the authenticity of the title deed with the Registrar of Deeds and to confirm the current ownership of the property. A deeds search will also inform a purchaser on the existence of mortgages, caveats and any other legal encumbrances on the property.

With the upsurge of property frauds, one ought to verify the identity of the Seller. There are reported incidences where bogus sellers are involved in transactions. At times, the purported seller possesses identity documents which bear the actual seller’s details but the fraudster’s face. As a cautionary measure a person ought to be wary when dealing with an elderly person bearing a plastic identity card. It is also important to verify the seller’s identity because an owner whose property is sold and transferred without her consent remains the owner and can recover that property from the purchaser. This is regardless of whether or not the purchaser was an innocent purchaser.

A special power of attorney should exist where the seller has appointed a representative to sale on their behalf. Such special power of attorney should be perused to verify if it satisfies all the legal requirements for the transfer to be effected.

A red flag should be detected where the property is being sold at a price which is significantly below the market values of a particular area.

Who appoints the conveyancer?

Unless agreed otherwise, the seller has the right to appoint the conveyancer to attend to the transfer.  The position that the seller has the right to appoint the conveyancing attorneys was reinforced in the case of  Scapelox Trading (Pvt) (Ltd) v Mashangwa Family Trust and others  HH 91/14 wherein the learned judge stated that “it is trite that a conveyancer represents the seller and as such the practice in the jurisdiction is that the seller chooses a conveyancer of his choice to transfer the property from the seller to the purchaser”.

However, it is the obligation of the Purchaser to pay transfer fees.

Signing of documents

Once the purchaser has satisfied herself with the property and done all the due diligence, the parties can enter into an agreement of sale and sign same. The sale of an immovable property must be in writing. The agreement of sale should clearly describe the property sold and the purchase price payable and the terms of payment if any. It is advisable that the purchase price be deposited into the conveyancers’ trust account and be released to the Seller upon registration of the transfer. The parties’ obligations should also be spelt out together with remedies for breach amongst other terms and conditions.

 

In order to comply with formal requirements for transfer to be effected the conveyancer drafts the documents necessary for transfer to be effected.  Of importance is that the conveyancer drafts a power of attorney authorising the him/her to pass transfer. This power of attorney must be signed by the seller. Both parties sign declarations for stamp duty purposes which stamp duty is paid to the Registrar of Deeds. Declarations are required in terms of the Stamp Duties (Declarations for Acquisition or Disposal of Property) Regulations, 1999.

Rates clearance and capital gains tax certificates

The Registrar of Deeds will not register title until furnished with a rates clearance certificate from the local authority with jurisdiction over the property. It is the seller’s obligation to clear all the outstanding rates on the property sold. The purchaser has the duty to pay advance rates for a period specified by the municipality. The local authority issues out a rates clearance certificate upon application by a conveyancer.

The parties must attend at the Zimbabwe Revenue Authority offices and be interviewed in connection with the sale. The purpose of the interview is to assess the capital gains tax payable by the seller on the transaction. Once the tax payable is ascertained and has been paid, ZIMRA issues out a capital gains tax clearance certificate. The capital gains tax clearance certificate is in turn filed with the Registrar of Deeds in order for transfer to be effected. Capital gains tax is chargeable in terms of the Capital Gains Tax Act (Chapter 23:01) as read with sections 37 to 39 of the Finance Act [Chapter 23:04].

Registration of transfer

When all the documents have been signed and formalities met, the transfer documents, rates clearance certificate, capital gains tax clearance certificate and draft deeds are lodged with the Deeds Registry in order for transfer to be registered in the purchaser’s name. It is imperative to note that the conveyancer can not lodge the transfer documents unless satisfied that the purchase price has been paid or secured.

 In conclusion, it should be noted that the actual documents to  be lodged and the procedural requirements might vary depending with the circumstances of each transaction. In order to avoid prejudice to either of the parties to the sale, it is critical to obtain professional assistance from the time of purchase until title is transferred to the purchaser.

This Post Has One Comment

  1. Adv Isiah Mureriwa

    Good paper. Can I sent you an article I wrote on Sale of Land in Instalments and the Protection of the Purchaser based on the South African Alienation of Land Act

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