WHY DO I HAVE TO PAY MORE TO “CANCEL” MY BOND WHEN I SELL MY PROPERTY?

WHY DO I HAVE TO PAY MORE TO “CANCEL” MY BOND WHEN I SELL MY PROPERTY?

So you find yourself in the position where you have paid off your bond after MANY years of hard work, (or, if you were extremely lucky you hit the lottery jackpot!) Either way your loan sum has been paid off and you no longer have to pay those monthly instalments to the bank. You now decide to sell your property and retire to the seaside: you have been advised over and over that the costs of the transfer will be for the Purchaser, but then you find out that the bond you paid off still needs to be “cancelled” – and in fact you need to pay for this to happen?

Allow us to explain: when you received your loan approval from the bank and went to sign the documents at the attorney’s offices you signed a Loan Agreement which set out the terms of repayment among other standard mortgage conditions. In order for the bank to secure the loan and to be able to initiate action against the property or prevent someone from selling the property prior to the loan being settled a Mortgage Bond was registered and endorsed against your property on the title deed at the Deeds Office. This protects the bank and secures the repayment of the loan.

What this also means is that even when the loan is repaid the endorsement of the bond against the title deed of your property must be cancelled at the Deeds Office. This can only be done by a Conveyancer whom the bank appoints to do so, and those terms mentioned in the loan agreement above include that the costs of registering and cancelling the bond are for your account.

The Conveyancer appointed to attend to the cancellation ensures that the financial arrangements are secure and the bank releases your title deed and issues a “Consent to Cancellation”  so that the property can now be transferred.

Feel free to contact us for any further information.

 

  • On March 23, 2023
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