A sentence in the article - Estate agents laughing all the way to the bank - caught my eye. It reads, " Conveyancers and legal bodies charge about 10% of the value of the property, giving them between R15 billion and R18 billion a year in fees". If that were the case even plumbers might consider turning to conveyancing. Facetiousness aside, the sentence highlights the generally held view that conveyancing attorneys get paid too much for what they do. The facts indicate otherwise.
An efficient land registration system is critical for the economic development and political stability of any country. And in South Africa as in many other countries, it is the conveyancer, not the estate agent, who is at the centre of this system. It is the conveyancer who ultimately has the legal responsibility of ensuring that one's title is sound. To this end, in addition to having studied law and being admitted as an attorney, the conveyancing examination syllabus issued by the Law Society of South Africa requires a broad knowledge of some forty Acts such as the Companies Act and the Administration of Estates Act. All of which amounts to many years of studying.
The conveyancer drafts not only deeds office documents but also sale agreements, deeds of donation and loan agreements. It is also his responsibility to superintend and control the finances of a transaction. The conveyancer therefore has to ensure that:
- The purchase price is paid.
- Transfer duty, VAT, rates and other local authority charges are collected.
- A mortgage bond, if necessary, is registered.
A statement like, "I sold my house and the attorney got (insert the entire amount reflected in the pro forma account)" is not uncommon. Conveyancing fees to the attorney in fact constitute about 1% of the transaction. They could be a lot higher if for instance title insurance had to be taken out, as is the case in the United States. It is the estate agent's commission and transfer duty which makes the transfer of property so expensive. This table and pie chart gives an idea.
The attorney's profession is regulated by the Law Society and high ethical standards have been laid down to ensure the public is protected. Another misconception is that conveyancing software is so powerful today that a highly trained competent legal secretary using it could in effect replace the attorney. The massive advantages and cost savings which conveyancing software has brought to the conveyancing profession must not be confused with the practice of law and its attendant complexities. Which is ultimately what a conveyancing transaction is. This brings me to a final point - that is the planned introduction of an electronic deeds registration system. Here the role of qualified conveyancers will be more vital than ever in ensuring the integrity of our land registration system.
In conclusion. The role of the attorney in the transfer of property is easily defensible and conveyancing attorneys should educate their clients in this regard to dispel any misconceptions that may linger.