PEXA has 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 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 Incoming Encumbrancee with no financial settlement.
Note: If this is part of a Transfer (ie. a lift and replace encumbrance), you will most likely be invited into a Transfer Workspace by the Incoming Proprietor or Proprietor on Title.
2. Check the Land Title details screen.
3. On the Participants screen, create your party details.
Note: You will not be able to lodge your encumbrance until the Proprietor on Title has been represented in the Workspace as they are required to sign the Encumbrance. If required, invite in the Proprietor on Title now.
4. On the Documents screen, select Create Document and complete the relevant information:
- Details of rent charge
- Terms and conditions:
- If you have a Land Registry Reference number for your Encumbrance, enter it into the Document Reference field.
- Additional terms - you can either upload an attachment through the Files screen or enter in any additional terms in the free form text field.
5. If you elected to attach additional terms, navigate to the Files screen.
6. Select Upload File.
7. Browse for the file you wish to upload.
Note: The document must be uploaded in PDF format.
8. Select File Description and then Covenants.
9. Once uploaded, click on the action cog and select Attach.
The following screen will display:
10. Select Attach.
11. Navigate back to the Documents screen.
12. View, Sign and Submit in the usual manner.