Proof of home ownership, the title deeds to your new home, are very important documents. But who keeps them and what happens if they need to be changed?
- Title deeds are important legal documents used as evidence of proof of ownership of a home or piece of land.
- If there is a bond on the property then the title deeds will be kept by the lender or bank and only returned to the owner once the home loan has been fully paid.
- Property burdens, or obligations to the property that need to be met, as well as details of joint ownership will be included in the transfer deeds.
- A lawyer will be needed if the title deeds are changed, and the lenders and co-owners will have to agree to the changes, too.
One of the crucial steps in buying a new home is to have the title deed transferred into your name, thereby proving that you are now the legal owner of the property.
“You’ll need the assistance of a lawyer specialising in property transfers (also known as a conveyancer) to help you transfer the title deed into your name,” says Rhys Dyer, CEO of ooba home loans, South Africa’s largest home loan comparison service.
Dyer explains that you’ll only become the owner of the property when the Registrar of Deeds signs the transfer. “After it’s been signed, a copy of the title deed is kept at the Deeds Office closest to you,” he says.
What does the title deed include?
- A description of the property, with its size, boundaries and exact position.
- The name and identity number of the person or persons who legally own the property. (It is possible for more than one owner to be listed on a title deed.)
- The date when the property was last transferred.
- If bought from another person, the purchase price.
- Any factors that could restrict the sale of the property, for example, a home loan.
- Any restriction that applies on the purchase of the property. For example, the title deed should state if the property has a full freehold title.
- An official Deeds Registry Office seal to indicate that the deed has been recorded in the name of the owner and the date.
Why are title deeds needed?
“Title deeds are used as an official record of who owns the title to a property,” explains Dyer. “For example, if a buyer is interested in purchasing a property, then a lawyer will check the title deeds in order to make sure that the seller is entitled to sell the property.
“The title deeds may have details on whether there is a bond on the property, and whether anyone else has an interest in the property,” he notes, adding, “They are also useful in gaining information on property boundaries and rights of way through a property.”
Who keeps the title deeds?
Where the title deeds are kept depends mainly on whether there is a bond on the property or not. “If there is a bond then the deeds will be kept by the finance lender or bank,” says Dyer. “The deeds will only be returned to the owner once the home loan on the property has been fully paid, although photocopies of the deeds can be requested at any time.”
If no bond is held on the property then the title deeds will be kept by the owner. “They can either be kept in the home or they can be held by a lawyer for safekeeping,” he adds.
Included in the title deeds will be a list of “burdens”, or obligations to the property that need to be met. These burdens can cover a wide range but they will usually include:
- Repairs and maintenance to the property.
- Access and rights of way for the property.
- Any restriction on using the property to run a business.
- Information on restrictions on altering the property.
- Whether or not the owner holds right to any roads that cross the property.
There are a number of burdens that will, of course, depend on the type of property or land in question. “A lawyer will be able to advise if any of the language used in the title deeds is confusing,” says Dyer.
An important part of the title deeds will be joint ownership. “If the property is owned by more than one person then this will need to be included in the details,” Dyer explains. “It should also set out exactly how much of the property is owned by each person, and there should be details on what will happen if the other person were to die; these details are known as survivorship details.”
Changing the title deeds
There are a number of reasons why an owner may want to change the title on property deeds, says Dyer. “These could include if a co-owner sells or transfers their rights in the property, or if the owner wishes to sell their rights to the property.”
He explains that a lawyer will be needed if the title deeds are to be changed, and there will be a fee for this service. “If there is a bond on the property or if there are co-owners then the lender and the co-owners will need to agree to the changes, too,” he adds.
Title deeds are extremely important documents used as evidence of proof of ownership, Dyer notes. “Lawyers can be used when investigating the rights of ownership, but searches may also be made by the person who wishes to buy or find out who owns a property. If property is being considered for purchase then a check of the title deeds is always standard procedure and the sale should not go ahead without this information.”
Title deeds become relevant later in the home-buying process, but if you’re still in the hunt for a property, bear in mind that ooba home loans offer a range of tools that can help you with that as well. Start with their home loan calculators; then use their free, online prequalification tool, the ooba Bond Indicator, to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.