LEP20XT

Number 4

THE BOND CANCELLATION

PROCESS
 THE BOND
CANCELLATION PROCESS
•In this chapter, imagine that you are working as a deeds assistant at
Manamela Attorneys, the bond cancellation attorney.

•Property over which a bond has been registered cannot be

transferred unless the bond has been disposed of. It is by way of
cancellation of that bond.

•Michael and Emily Green still owe an amount to Absa Bank regarding
the bond they had registered over the property. The Greens are
legally not supposed to sell the property to Sipho Legodi before the
bond has been disposed of.

ABC of Conveyancing:
Kilbourn & Botha
 THE BOND CANCELLATION
PROCESS
•As soon as it comes to the notice of Absa Bank that the Greens want
to sell the property over which they have a bond, they will instruct their
attorney to collect the outstanding amount on the loan and cancel the
bond.

•The instructions will be given in writing and the outstanding amount

will be furnished as well as the particulars of the seller and his
attorney.

•As soon as instructions have been received from Absa Bank, the
conveyancing assistant must attend to the following:
ABC of Conveyancing:
Kilbourn & Botha
 THE BOND CANCELLATION
PROCESS
1. Acknowledge receipt of instructions

•Instruction was received from Absa Bank (to cancel their bond) and a
letter must be written to Absa Bank to acknowledge receipt of the
instruction. Your client is Absa Bank.

•In this letter you must also request Absa Bank to give you the
cancellation figures.

ABC of Conveyancing:
Kilbourn & Botha
 THE BOND CANCELLATION
PROCESS
2. Arrange payment of outstanding amount on bond loan

•There are various ways in which the outstanding amount can be settled.

•In most cases Malan & Mohale Inc. will be requested to furnish guarantees
for the payment of the outstanding amount on the bond.

•The Greens can pay the outstanding amount in cash. If this is the case
then arrangements must be made with their attorney for payment of the
amount into the trust account of Manamela Attorneys.

•Payment of this amount to Absa Bank will only be made on date of

transfer.
ABC of Conveyancing:
Kilbourn & Botha
 THE BOND CANCELLATION
PROCESS
3. Establish simultaneous transactions

This information can be requested in writing from Malan & Mohale Inc,
alternatively it can be obtained telephonically from the deeds assistant
of Malan & Mohale Inc when he phones to arrange for lodging. It is
advisable that all information should be obtained in writing and kept in
the file.

ABC of Conveyancing:
Kilbourn & Botha
 THE BOND CANCELLATION
PROCESS
4. Obtain payment of fees for cancellation of bond

•The mortgagors (SELLERS) are responsible for payment of the fees

regarding the cancellation of the bond. The Greens will therefore be
requested to settle the fee.

•As Malan & Mohale Inc acts on behalf of the Greens in this matter, a
letter will be written to them, requesting payment of the cancellation fee,
alternatively requesting them to furnish an undertaking that the fee will
be settled on date of transfer.

ABC of Conveyancing:
Kilbourn & Botha
 THE BOND CANCELLATION
PROCESS
5. Prepare document for cancellation of bond and arrange
signature thereof

•Absa Bank must sign the consent to cancel the bond.

•The bank will appoint someone to sign the document on its behalf. It is
advisable to obtain the resolution from Absa Bank whereby they have
authorised a person to sign the necessary document for cancellation of
the bond, and to keep it in the file.

ABC of Conveyancing:
Kilbourn & Botha
 THE BOND CANCELLATION
PROCESS
6. Malan & Mohale Inc will arrange lodgement and the bond
cancellation will be registered

•The client must be notified immediately once the bond has been
cancelled. On date of cancellation of the bond, the guarantee received
from FNB, must be presented for payment.

•The money received from FNB must be paid into the firm's trust
account.

ABC of Conveyancing:
Kilbourn & Botha
 THE BOND CANCELLATION
PROCESS

7. Finalisation of file

A letter will be addressed to the client confirming the cancellation of

the bond and the firm's trust cheque for the amount of the guarantee
received from FNB must be forwarded to the client (Absa Bank).

ABC of Conveyancing:
Kilbourn & Botha
 References:
Kilbourn L & Botha M:
The ABC of Conveyancing: 2020 Handbook
978-1-48513-385-8, Juta