PEXA has introduced the ability to lodge an Encumbrance and Discharge an Encumbrance in SA. An encumbrance can be registered on a title as a restriction regarding the use of the land. It is an agreement creating various obligations on the parties, restricting or forbidding certain acts on the property.
When purchasing a property in a recently developed area, an encumbrance in favour of the developer often appears against the title of the property. Many encumbrances aim to maintain uniformity within the development and are applicable to each and every property in the area. Encumbrances can be seen as a benefit, as they help maintain consistency with certain types of developments.
Other encumbrances can be ‘lifted and replaced’. As the terms specify, they do not run with the title. The existing encumbrance is discharged as part of settlement (i.e., lifted) and a new encumbrance in the purchaser’s name in similar terms is registered at settlement (i.e., replaced).
You will see the new roles of Encumbrancee on Title and Incoming Encumbrancee when creating a new workspace in PEXA. This functionality also supports the uploading and attaching of supporting Covenants via the Files screen.
Watch a demo and webinar on SA Encumbrances below (24 mins)
1. Create a Workspace in the role of Encumbrancee on Title with no financial settlement.
Note: If this is part of a transfer (and a lift and replace is required), you will most likely be invited into a Transfer Workspace by the Incoming Proprietor or the Proprietor on Title.
2. Check the Land Title details screen.
3. Navigate to the Participants screen, locate the party shown as Encumbrancee on Title and use the action to confirm that you represent this party.
4. Navigate to the Documents screen, click Create Document and select Discharge of Encumbrance.
5. Ensure the details are correct and select the appropriate Set of Operative Words for this Discharge of Encumbrance.
6. View, Sign and Submit in the usual manner.