Government Wants South African Deeds Registration System To become Electronical

South Africa has a deeds registration system with a solid reputation, but it’s still a manual system. The going trend in everything from car rentals to banking is go the electronic route, so it just makes sense the deeds registrations system should follow the same route, or perhaps it’s not so simple?

Currently it takes around 7 to 8 working days for the registration of a title deed in the deeds office, however, this is not why there is such a backlog with the registration of title deeds.

Maryna Botha, director with legal firm Smith Tabata Buchanan Boyes, says South Africa has a reputation for a very secure and transparent registration system, illustrated by, for example, the fact that we are one of few jurisdictions where property owners do not have to take out insurance regarding their title.

“It is exceptionally rare that someone can go to a registered owner of a property and allege or prove that he/she has better title to the land. In other words, one can rely on the deeds office information that the person who is shown on the title deed as registered owner, is the person with unassailable title to the land.”

However, the government is battling to catch up with a mountainous backlog of title deeds, reportedly mostly for RDP houses, that must still be issued. The Mail&Guardian reported in 2016 the estimated backlog in issuing title deeds in South Africa’s RDP housing project was estimated to be more than 900 000. The RDP project is reported to be the largest government-subsidised housing project in the world and delivered three million units in the past 20 years.

Last year it was reported that the Department of Human Settlements assigned a team of conveyancers to all nine provinces to assist with eliminating the backlog.

In short, for thousands the value of owning their own home remains unlocked until they are issued with the title deed to their property. Having a title deed gives the homeowner an address and a first entry into the property market. It is an asset to which value could be added over time and it can be left as an inheritance.

Currently it takes around 7 to 8 working days for the registration of a title deed in the deeds office, however, this is not why there is such a backlog with the registration of title deeds.

Botha explains she isn’t aware of any backlogs at deeds offices, but says backlogs rather relate to the housing departments in the various provinces where processes are in place to transfer land to applicants under various government subsidy plans, restitution processes and more.

“The delay is not at the deeds office itself, but in the process to do the paperwork (by the department or its service providers) so that the required documents can be submitted to the deeds office for registration,” she says.

To assist with fast-tracking the registration process, the government is proposing instituting an electronic deeds registration system with the capacity to facilitate the registration of large volumes of deeds. This news has been welcomed by some in the property sector provided that the proper security measures against hacking etc are provided for.

Craig Hutchison, CEO of Engel & Völkers Southern Africa said the industry would welcome an electronic deeds registration system if it leads to efficiency in the time it takes to register a property as well as the security attached to a registration.

“With the current innovations in technology such as blockchain it is the next logical step for the deeds registration process to go the electronic route. I do hope that the overall system would electronically incorporate the clearance figures from municipalities, as this would greatly assist in the time it takes to complete the registration process,” said Hutchison.

Lew Geffen, Chairman of Sotheby’s International Realty in South Africa, suggested a dual system for increased security. “I think that this is a two-edged sword – if done right, it can lead to increased efficiency which will enhance the time factor but, the reverse would be that either the system could be hacked or files deleted by mistake.

“I would only feel happy if there was a dual paper system running at the same time with the actual paper title deed that could be drawn up. In short, a dual system is necessary for security. If the electrification enhances the speed aspect, I’m all for it,” concluded Geffen.

Botha says government must ensure that they have adequate electronic systems, safeguards, back-up, know-how and security of the electronic system in place. Responding to the question of whether she thinks government has the necessary security measures in place, she said it is still to early, but on the face of it, there is every commitment in words that they will put it in place.

In conclusion, she says the bill has been a long way in the making and attempts to align and “compete” with other overseas jurisdictions that has electronic registration systems. “It is a certainty that it will come into operation although not sure when; one hopes that the required back-up systems will be in place by the time it is made effective, Botha says.

The Minister of Rural Development and Land Reform was expected to introduce the Electronic Deeds Registration Systems Bill in the National Assembly during the first quarter of 2018 which didn’t happen, and it is now not clear when the bill will be introduced.

The Mail&Guardian article referred to also reported that according to research done by the Centre for Affordable Housing Finance in Africa for the Estate Agency Affairs Board the low-cost housing sector (homes valued at less than R300 000) accounted for 44% of the total housing sector in 2013. The aggregate value of government-sponsored housing was R200 billion which is 5% of the total R3.8 trillion value of residential property.