Dormant (FNB) Home loan/Bond question

lived666

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So house is actually in my moms name but I paid it up a few years back and nothing is owed. Anyhow bond has come to term and FNB are calling to have it cancelled and the deed collected etc, but my mom isnt that well and says she just doesnt feel like, doesn't want the hassle with the bank and forms and attorneys and whatever is involved.

There is no insurance attached to the bond, these were moved when it was paid up.

So I called FNB Home loan and they said if nothing is done the bond goes dormant and until it is cancelled they retain ownership of the deed - so is there any issue with this, I really dont care if they hold onto the deed? There is no monthly bank fees and they cant charge because the bond is pre 2007 so they cant charge a monthly fee which I think is the main reason they pressing for a cancellation.

Any specific complications that I am not aware of if the bond goes dormant and the deed isnt collected?
 

zerocool2009

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FNB will charge a monthly bond fee (a service fee), even if it is paid up.

You have 2 choices, pay thousands of rands to get it on your personal name, or just extend the period with 10 or 20 years, and continue to pay service fees.
 

lived666

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FNB will charge a monthly bond fee (a service fee), even if it is paid up.

You have 2 choices, pay thousands of rands to get it on your personal name, or just extend the period with 10 or 20 years, and continue to pay service fees.
Thing is I haven't been charged any monthly fees since the bond was paid up, so not concerned about monthly fees. They told me if I ignore it then it just goes dormant and the deed stays with the bank, which I don't really care about.
I told the consultant on the phone rather the deed stays with them than the EFF but she didn't find that amusing.
 

Pitbull

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Thing is I haven't been charged any monthly fees since the bond was paid up, so not concerned about monthly fees. They told me if I ignore it then it just goes dormant and the deed stays with the bank, which I don't really care about.
I told the consultant on the phone rather the deed stays with them than the EFF but she didn't find that amusing.
Honest and best advice. Pay the transfer fees and have it registered in whom ever will inherit the house (I suspect it's you). Eventually it will need to be done and having to do it when the property is in an estate is going to be one hell of a mission. Borrow the transfer fees if you have to, just get it done sooner rather than later :)
 

petum

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Honest and best advice. Pay the transfer fees and have it registered in whom ever will inherit the house (I suspect it's you). Eventually it will need to be done and having to do it when the property is in an estate is going to be one hell of a mission. Borrow the transfer fees if you have to, just get it done sooner rather than later :)
Are you not subject to capital gains and donations tax?
 

Speedster

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I'm no conveyencor (sp?) but surely the deed is already registered in the name of the owner (for lack of a better term) and not the bank? The bank would have registered a bond against the deed, but there shouldn't be any necessity to transfer the property to the owner as this would already have taken place. This sounds like simply closing an account at the bank as opposed to a transfer of property ownership.
 

zerocool2009

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I'm no conveyencor (sp?) but surely the deed is already registered in the name of the owner (for lack of a better term) and not the bank? The bank would have registered a bond against the deed, but there shouldn't be any necessity to transfer the property to the owner as this would already have taken place. This sounds like simply closing an account at the bank as opposed to a transfer of property ownership.
No fees payable to get the title deed, but attorney fees payable to cancel the bond
 

Speedster

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FNB will charge a monthly bond fee (a service fee), even if it is paid up.

You have 2 choices, pay thousands of rands to get it on your personal name, or just extend the period with 10 or 20 years, and continue to pay service fees.

No fees payable to get the title deed, but attorney fees payable to cancel the bond
How are those two posts compatible?
 

Lupus

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Pay the transfer fees, get it in writting that you're inheriting the house, borrow the money for the lawyers and sort it out now. While your mom is still capable. A friend recently lost their mom and lets say the legal web is tough.
 

zerocool2009

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Dear Speedster,

If you dont owe on your bond, you can ask the bank to transfer the deed to your name (costs involved for that).

Secondly, I dont know if the guy owe's R0 or R5 at least.

SO ....... to get the deed you need to pay BOND CANCELLATION costs.

SOOOOOOOOOOOOOO, if you think paying R10 000 for a piece of paper is worth spending (then all good)

Related to my first post, if your 20 years are up, you can ask the bank to "reset" the 20 year period by filling in a FNB Homeloan request form
 

signates

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There's tax implications of transferring into your name. Donation of property triggers a disposal and CGT becomes payable as well as donations tax on the value above R100k.

Leaving it in her name will end up with the property eventually in her estate on her passing and estate duty payable.

I would work out the tax implication of both options and take it from there.
 

Speedster

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Dear Speedster,

If you dont owe on your bond, you can ask the bank to transfer the deed to your name (costs involved for that).

Secondly, I dont know if the guy owe's R0 or R5 at least.

SO ....... to get the deed you need to pay BOND CANCELLATION costs.

SOOOOOOOOOOOOOO, if you think paying R10 000 for a piece of paper is worth spending (then all good)

Related to my first post, if your 20 years are up, you can ask the bank to "reset" the 20 year period by filling in a FNB Homeloan request form
There shouldn't be any need to transfer the deed, it is already in the "owner's" name. Banks don't register deeds in their name, they just register a bond against the deed.

Also, this bond doesn't need to be cancelled as it had reached expiry. Cancelling a bond requires attorneys to draw up the new (i.e. cancellation) agreement. A bond that reaches expiry is a completed contract so there is no need to draw up a cancellation agreement.

I still don't understand how the following two posts are compatible.

... pay thousands of rands to get it on your personal name...
No fees payable to get the title deed.../QUOTE]
 
Last edited:

zerocool2009

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There shouldn't be any need to transfer the deed, it is already in the "owner's" name. Banks don't register deeds in their name, they just register a bond against the deed.

Also, this bond doesn't need to be cancelled as it had reached expiry. Cancelling a bond requires attorneys to draw up the new (i.e. cancellation) agreement. A bond that reaches expiry is a completed contract so there is no need to draw up a cancellation agreement
"As soon as a bond reaches maturity (that is, when the full term of the loan period is reached), it has to be cancelled – and this service comes at a cost. "
 

creeper

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So house is actually in my moms name but I paid it up a few years back and nothing is owed. Anyhow bond has come to term and FNB are calling to have it cancelled and the deed collected etc, but my mom isnt that well and says she just doesnt feel like, doesn't want the hassle with the bank and forms and attorneys and whatever is involved.

There is no insurance attached to the bond, these were moved when it was paid up.

So I called FNB Home loan and they said if nothing is done the bond goes dormant and until it is cancelled they retain ownership of the deed - so is there any issue with this, I really dont care if they hold onto the deed? There is no monthly bank fees and they cant charge because the bond is pre 2007 so they cant charge a monthly fee which I think is the main reason they pressing for a cancellation.

Any specific complications that I am not aware of if the bond goes dormant and the deed isnt collected?
A few options:
1. Place the bond in safe custody. Bank keeps bond deed and title deed.
2. Close the account. There shouldn’t be a cost to you. Bank pays for bond cancellation attorneys. Title deed will still be in your mother’s name

Trying to get the title deed on your name is costly exercise and SARS might ask questions if there is no money paid.

Remember, the title deed is always under your mother’s name. Bond deed is attached to the property and is owned by the bank. Bank keeps the title deed as part of their security (because
 

lived666

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A few options:
1. Place the bond in safe custody. Bank keeps bond deed and title deed.
2. Close the account. There shouldn’t be a cost to you. Bank pays for bond cancellation attorneys. Title deed will still be in your mother’s name

Trying to get the title deed on your name is costly exercise and SARS might ask questions if there is no money paid.

Remember, the title deed is always under your mother’s name. Bond deed is attached to the property and is owned by the bank. Bank keeps the title deed as part of their security (because
Option 1 - how? As far as I know that mean just doing nothing, not cancelling and the bond goes dormant until cancelled.
Option 2 - as far as I know I have to pay

I dont really care in which name the deed is in but as far as I know the client has to pay bond cancellation fees?
 

jman

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So you pay the R6k or whatever it is to open the bond, and then must pay to close it? Man, assholes..
 

creeper

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Option 1 - how? As far as I know that mean just doing nothing, not cancelling and the bond goes dormant until cancelled.
Option 2 - as far as I know I have to pay

I dont really care in which name the deed is in but as far as I know the client has to pay bond cancellation fees?
https://www.privateproperty.co.za/advice/property/articles/pros-and-cons-of-a-paid-up-bond-facility/249

There is a safe custody charge. However, I think ABSA was free (talking 8 years ago)
 

zerocool2009

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I quickly phoned around, you are looking at roughly R4000 to get the actual deed. No cost on FNB side, the fee payable is the legal leg of things.

JMan .... I would rather say attorney's make money out of nothing.
 
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