20 Oct Cancelling an Existing Bond
Cancelling an existing bond can take place simultaneously with a property transfer. Once the seller has sold the property, the proceeds will be used to pay off the outstanding loan amount and the bond against the property will be cancelled. Let’s take a look at the process that must be followed.
Notify your lending institution of your intention of cancelling an existing bond
The first step in cancelling an existing bond is notifying the lending institution of your decision to do so.
This should be done in writing, so you have a record of your communication. The most effective approach to achieve this is to give instruction to the conveyancing attorneys serving on the cancellation panel for that particular bank to submit the request through the channels created just for that reason. After receiving the request, the bank will tell one of the panel attorneys to cancel the bond.
Contact us as soon as you start thinking of selling so we can advise you on the applicable notice period.
Take note of the notice period
It’s important to keep in mind that banks often need 90 days written notice before processing a bond cancellation when there are outstanding home loan balances, such as when a property is sold before the bond is paid up. Holders of bond accounts are responsible for any cancellation fees that may be paid if this time frame is cut short. Banks need to know how outstanding sums will be paid off in the event of an early settlement, such as through the sale of the homeowner’s home.
In the event that the bond is cancelled during the 90-day notice period, penalty interest might be charged on a pro rata basis, for the balance of the penalty period.
By way of example, in the event that 90 days’ notice is given and said bond is cancelled 30 days after issuing such notice, penalty interest will apply to the remaining 60 days. Should there be an overpayment to the bank, this will be refunded within a few days of registration.
The seller should provide written notice to the bank of his/her intention to cancel the bond. It is also good practice to notify the bank once instruction of transfer is received and the bond number is confirmed by the seller.
Cancel the bond with the deeds office
Any existing bonds over a seller’s property must be cancelled at the Deeds Office for simultaneous transfer into the purchaser’s name. This is true even if there is no outstanding amount owed on the loan account. In these cases, there will still be a formal bond that needs to be cancelled at the Deeds Office.
In order to cancel the existing bond, the transferring attorney will obtain the cancellation figures from the seller’s bank, and make sure that guarantees are issued to settle the balance upon registration. Cancellation of the existing bond by the seller’s bank will only be consented to, once these guarantees are received.
Should you have any concerns about penalty interest being levied on your property transaction, please email email@example.com with your bond account number. We will then request the cancellation figures, which will serve as notice of a seller’s intention to cancel his/her bond. The 90-day notice period will begin once this notification has been issued. Kindly be advised that the seller will not be able to access additional funds from his/her bond account once this notice is given or the cancellation figures are requested.
AWD Law serves on ABSA, FNB, and Nedbank’s cancellation panels. In the event that we are appointed to attend to the transfer of the property, we will apply for the cancellation from the seller’s bank and attend to the cancellation of the existing bond. Contact our office should you require any assistance to cancel your bond and we will notify the relevant bank accordingly.
Kindly be advised that AWD Law does not enter into litigation on behalf of clients. Our conveyancers specialise exclusively in the development of vacant land, property transfers, bond registrations, administration of deceased estates and notarial practice. Should you require assistance with a litigation, kindly contact The Legal Practice Council.
Contact AWD Law For Professional Property Advice before signing your Offer to Purchase.
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Beste Bronwen, aangeheg bewys van betaling. Baie dankie vir jul altyd vriendelike diens.
Thank you so much for your excellent service. Looking forward to working with you in the future 😊
Awesome great thank you guys really appreciate the amount of effort that everyone put into this deal , please tell Andre I really appreciate the effort.
Good Day Bronwen Thank you, that is brilliant news!!! We appreciate your offices assistance and excellent service herein 😉 Have a great day.
Baie dankie vir die goeie nuus en die puik diens wat ons deurlopend by julle ontvang het tydens die duur van die transaksie. Ons waardeer opreg. Mooi dag vir julle."
Vind asb aangeheg ons registrasieskrywe en bewys van betaling van die kommissie hierin. Ons vertrou dit is in orde en bedank jou vir die vriendelike instruksie en samewerking hierin. Ons hoop ons kan gou weer saamwerk.
"Beste Annalize, Baie dankie vir jul goeie werk. Andre dankie vir jou ook! Vriendelike groete"
Nog ‘n goeie verwysing hier!
Net 'n opregte dankie vir jul puik, professionele en vriendelike diens. Ek kan julle regtig aanbeveel! Vriendelike groete
Graag dankie se vir jul flinke diens. Hartlike Groete
vreeslik baie dankie en vir julle uitmundende en professionene werk!!!
Good day Pertunia I really cannot thank you enough for your promptness and constant feedback you always provide, much appreciated.
Dear Pertunia, I trust that you are well. Thank you for your email, content duly noted. Once again thank you for your kind and professional assistance throughout the process. We highly appreciate everything you did. Yours faithfully
Dear Andre, I want to bring to your attention how appreciative I am of the service I received from Patricia Erasmus throughout my dealings with her. She has been professional, courteous and often went over and beyond one can expect, to keep me updated and informed, on the status of my sales transaction. She was prompt, throughout my dealings with her and she would often contact me with feedback before I could ask about it first. It is not often that one experiences this dedicated work ethic and please note that her service is a positive contribution to your business.
Vir Aandag - Mnr Andre Germishuizen Baie dankie vir proffesionele en uitstekende hantering van ons eiendomstransaksies - wees verseker ons waardeer dit opreg en ons beveel jou en jou span aan kliente wie met vertroue jou kan ondersteun. Seenwense
Good day Andre Thank you for your patience in this matter. We have received feedback yesterday afternoon.
Thank you for your wonderful service. It’s refreshing to receive such service honestly. Thank your boss for us as well, we really appreciate the professional service we received. Because of you I was able to take the transferring attorneys to task. Be blessed
Wow !! Dit was baie vinnig ! Lekker aand Groete
Wow...Thank you so much, I'm so impressed by the swift service I'm receiving. Blessed regards
THANK YOU FOR YOUR HELP WITH THIS TRANSACTION. IT HAS BEEN A JOURNEY SECOND TO NONE. WELL DONE AWD LAW
Fantasties, baie baie dankie Magda en Andre!! Lekker dag vir julle!
Goeie dag Andre Ek hoop dit gaan nog goed. Weereens dankie dat jy ons so vroeg kon sien Woensdagoggend. Dit is so lekker dat ons die kontrak voor werk kon doen en nie ‘n halwe dag verlof te moes insit nie. Aangeheg die bewys van betaling vir die rekening soos aan ons gegee is Woensdag. Hou ons asb op hoogte van wat alles gebeur en laat weet asb indien daar nog enige iets is wat jy van ons benodig. Groete
Good afternoon Pertunia. I would first off like to thank you for your very efficient and professional service and making the process of buying our first home as seamless and stress free as possible.