TSC – Tenure Support Centre

EVENT: TITLING CHALLENGES AND OPPORTUNITIES IN SOUTH AFRICAN CITIES

The Tenure Support Centre (TSC) invites you to join Mayor Geordin Hill-Lewis and Illana Melzer for a
discussion on titling challenges and opportunities in South African cities

Roughly one third of the formal urban housing stock was developed by the State and given to poor households as part of the RDP subsidy housing programme, arguably the most redistributive of all post-apartheid government’s programmes. While these properties lie unencumbered on the balance sheets of low-income South African families their performance as assets is severely undermined by the lack of formal title. Many owners have no title deeds at all, or the title deeds they have are not in their names. This problem affects millions of households who must rely on social mechanisms to protect their rights. Ownership disputes are common and are often resolved outside the legal system, further destabilizing already vulnerable areas and entrenching a mafia-style governance thuggary.

The problem has wide ramifications. Cities cannot govern effectively without being able to identify property owners. Nor can they bill for services when they have no idea who the owner is, putting their financial sustainability in peril. And the financial sector is unable to provide mortgage finance, an increasingly politicised issue creating real risks for the banking sector.

There have been various initiatives to resolve titling challenges in South Africa at various times in various areas. But as fast as titling problems are solved, new problems are created. This challenge must be met by a concerted national effort, bringing together the resources of the public and private sectors. Join us to explore how this effort might be structured.

EVENT DETAILS

Monday, 11 November 2024

Investec Offices, 14 Dock Road, Victoria & Alfred Waterfront, Cape Town, South Africa

5:30pm followed by drinks, snacks and networking

Underground parking is available

Speakers – Mayor Geordin Hill-Lewis & Illana Melzer

Update on the Deceased Estates Online Portal: Challenges persist

On the 10^th of October 2023, Justice and Correctional Services Minister, Ronald Lamola, launched the Master’s Office Deceased Estate Online Registration System. According to Lamola, it was a milestone for how the Masters’ office renders services to the public, making the process more efficient and accessible. To quote the Minister; “This system will be a catalyst to changing this environment…. modernising it, digitising it, and making it accessible to members of the public and also all the professional bodies that operate in the space of the Master’s [office] services,” ¹.

In a previous blog post in October 2023, we shared our initial thoughts on the newly launched Online Registration System. We highlighted its potential to transform estate management in South Africa, and its aim to streamline processes and reduce the long waiting times that are typically associated with the winding up of estates. However, our ongoing experience with the system has been somewhat disheartening.

In the seven months since inception, we have reported a total of 25 estates through the online platform. Of the estates reported, 12 have been processed through the system and registered, but we have only received seven Letters of Authority. A further nine estates are stuck in the process without any obvious progress and we are engaging with the Master on outstanding queries on the last four cases. The processing time has far exceeded the mandated 21 days, stretching into weeks and even months, which is a serious concern for the clients that we are trying to assist. In short, the online system is no quicker than reporting a deceased estate manually.

The issues extend beyond slow processing times. We have encountered numerous technical problems that have made using the platform a challenge and which collectively contribute to a frustrating user experience that undermines the efficiency that the system is trying to enhance. This includes:

Link failures: crucial links to the Department of Home Affairs and CIPC are frequently non-functional. When these links do not work, users cannot report estates through the portal.
Error messages: There are often validation failure messages, but the system does not indicate where the failure is or why it has arisen, making it difficult to rectify .

The Masters Office has also launched a new QR code enhanced Letter of Authority which is supposed to be emailed to the appointee, thereby reducing processing times and the fraudulent administration of estates. However, this is still not working as it should. Of the 12 estates that have been registered, we have received seven Letters of Authority with a QR code. We have not received the other five.

It is encouraging that the Law Society of South Africa is engaging with the Portfolio Committee on Justice and Correctional Services to address the concerns of the legal profession about the issues at the Masters Offices. The LSSA has made practical suggestions to clear the backlogs and improve efficiencies. The response of the Acting Chief Master has also been encouraging. They have reduced the target to issue Letters of Authority form 21 working days to 15. This is a laudable objective. However, it is far from being achieved. It took the Masters Office a staggering 100 days on average to issue the seven Letters of Authority we have received to date. It is hard to believe that the target the Masters Office has now set itself is in any way achievable.

Overall, our experience with the online registration system has not been a positive one, so much so that we are contemplating a return to manual reporting methods. Despite their own inefficiencies at least they provide a level of reliability and predictability that the online system currently lacks.

Figures: Screenshots of the Deceased Estate Online Registration System showing cases registered all the way back in November for which there has been no progress to date

¹https://www.sanews.gov.za/south-africa/new-online-service-milestone-justice-department

Where there’s a will, there’s a way – Why having a will is so important for property owners

According to the Master’s Office, 70% of South African’s do not have a will¹. What is a will, and why does it matter?

A will is a legal document that specifies what happens to your property when you pass away.

If you die without a will, the law will decide who inherits your house. It makes no difference what you would have wanted to happen with your property. The absence of clear legal documentation outlining your wishes can lead to your family not receiving the care or financial support that you intended, possibly depriving them of necessary resources or guardianship arrangements. For example, if you have remarried and did not leave a will, your new partner will inherit the property and your children from your previous marriage may be left with nothing.

In addition, if you pass away without leaving a will and your family situation is complicated with lots of heirs standing to inherit, it means a much longer and more expensive process for your family to transfer the property into the names of the heirs.

If your partner dies without a will, you could face significant challenges especially if you are in a customary or common-law marriage that lacks official recognition. Without legal proof of your relationship or a will from your partner, you might find yourself excluded from inheriting the property if it was registered in his or her name. This could result in your property being transferred to your spouse’s children or other relatives, leaving you without a home, despite your long-term relationship.

Having a will can prevent the wrong family members getting your house after you pass away. Maybe you fear they won’t let other family members live there. You can write in your will that some family members cannot inherit your house. For example, if you are concerned that one of your children’s spouses might take the house and stop your other children from living there, you can write in your will that your child’s spouse cannot get the house. This ensures that the interests of your other children are protected.

Your will can also ensure harmony and peace between your loved ones after you pass away. For instance, you can state in your will that certain family members can live in your house for as long as they are alive. This not only secures their future but also ensures that your property continues to be treated exactly as you envisioned.

Having a will can also save your family time and money.

A will is more than a legal formality, it is a way to ensure peace of mind for both you and your loved ones. By securing a will, you are taking a responsible step towards protecting your legacy and ensuring your family’s future is shaped by your wishes not by legal frameworks. Don’t make your family fight it out after your death. Sign a will and know that your loved ones will inherit as you want them to.

At the TSC, we offer a service for drafting your will at no charge. If you are interested, please connect with us on Whatsapp or give us a call on 065 041 6832 for more information. Your peace of mind is just a conversation away.

¹https://www.businesslive.co.za/bd/companies/financial-services/2021-09-15-podcast-70-of-south-africans-do-not-have-a-will-and-stand-to-lose-a-lot-as-a-result/

6 ways that we help clients resolve title deed issues

It can be stressful and confusing to resolve a problem with your property’s title deed. Our team at the TSC is here to guide you through each step of the process, ensuring your property rights are secure and your title deed accurately reflects your ownership.

We can assist with many different kinds of problems:

1. Is there a mistake in your title deed?

Maybe you have noticed that your name is spelt incorrectly or your ID number has been incorrectly recorded? Maybe you are married but the title deed shows you as unmarried? The TSC can assist with the necessary application to the Deeds Office to have these kinds of mistakes corrected ensuring that your title deed accurately records your ownership of the property.

2. Are you divorced but your ex-spouse is refusing to co-operate in transferring the property into your name?

Did you know that you don’t need the co-operation of your ex-spouse to transfer property into your name in terms of a divorce order? The TSC can help you with the correct application to the Deeds Office for an endorsement of the property into your name as stated on the divorce order.

3. Has a family member passed away and you don’t know how to transfer the deceased’s property into your name?

Navigating the processes at the Masters Office can be confusing and time consuming. The TSC offers comprehensive services in reporting deceased estates, including obtaining Letters of Authority and then transferring the deceased’s property into the names of the legal heirs. We do it all, so you don’t have to.

4. Have you bought a property informally through your street committee or by informal agreement with a seller?

The TSC can help you to regularise your informal arrangement with a formal registration in the Deeds Office. This secures your rights as an owner of the property and ensures that the seller cannot change his/her mind. You are not the owner until your name is on the title deed so the sooner you formalise, the better.

5. Have you lost your original title deed or has it been destroyed/damaged?

If so, you will need to apply to the Deeds Office to get a new original title deed. A copy of the title deed is not good enough. The TSC can assist you with this application.

6. Have you been waiting for many years to get your title deed from the government?

The TSC, through its contacts at municipalities and provincial government, will attempt to find out the reasons for the delay on your particular title deed. We can apply for a subsidy for you if your subsidy is not yet approved (provided you qualify), help with the signing of documents needed to transfer the property into your name and liaise with the government appointed conveyancers to ensure that your title deed is not forgotten.

Do you have one of these problems, or any other problem with your title deed? If so, contact us today on our Whatsapp number to take the first step towards resolving your problem: 065 041 6832

Understanding Title Deeds, your questions answered

A Title Deed is the most important document when it comes to owning a property. The Tenure Support Centre helps individuals resolve their title deed challenges, which can be daunting if one does not know where to find help.

To better understand why it is vitally important to seek assistance, please read through these frequently asked questions below or head to our FAQ page.

What is a title deed?

A legal document that indicates who the registered owner of a property is.
This includes the full names and ID number of the owner or owners, address of the property, marital status, etc.
The record is kept in the Deeds Office.
You always need the original title deed.

How can you tell if a title deed is an original?

An original title deed will have the signature of the Registrar of Deeds on the last page.
Only an original document will have an embossed deeds office stamp – if you touch the paper you will feel the surface is slightly raised over the stamp.
It will also have an original date stamp indicating the date on which the transfer was registered in the deeds office.

Why is it important to keep your title deed safe?

You need the original title deed to do anything with the property, for example, if you want to sell the property.
If you lose your original title deed or it gets lost or damaged, you can apply for what is called a VA Copy.
This is different to just getting a print-out of the title deed at the Deeds Office.
You will need a lawyer to help you with this.
There are costs involved.

What happens if my details on the title deed are incorrect?

If your name, ID number or marital status on your title deed are incorrect, this can only be corrected by registration in the Deeds Office by a conveyancer.
You will need to provide various documents (some of which you might need to get from Home Affairs) and sign paperwork to correct the errors.
It is best to correct title deed mistakes as soon as you become aware of them as it can be difficult for your heirs to do so after your death or after a divorce where your ex husband/wife refuses to cooperate.
There are costs involved in rectifying title deed errors but these are fairly minimal.
Get in contact with our client administrator who will guide you through the correction process.

What are the risks of buying a house and not getting the title deed transferred into your name?

Without transfer, you will not have legal ownership of the property.
You may face difficulties in selling or passing the property onto your heirs.
Protect your asset by ensuring proper transfer of the title deed.

I bought a house and the seller gave me the title deed but my name is not on it, what do I do?

A title deed can only be changed through the Deeds Office, and you will need the assistance of a lawyer to do this.
You will need to contact the seller and tell them that you want to change the title deed into your name.
If the seller is deceased, you need to speak to their family and see if they will assist you.
They will need to sign some documents during the process.

Before buying a house, what should I check?

The sellers identity (ask to see a copy of their ID) and ensure they are the registered owner on the title deed
If the registered owner is deceased. Ask to see the Letters of Authority issued by the Masters Office and only transact with the properly appointed person on those Letters
If there is an outstanding balance owing on the municipal account. Ask the seller to show you a latest municipal account so that you can check
If there are any buildings on the property which encroach across boundary lines onto another owner’s property or onto roads or open spaces
If the seller has the ORIGINAL title deed. If not, the seller will need to pay the costs of obtaining a new original

What is a municipal rates account?

An account sent by the local municipality to property owners for services such as water, sewerage and refuse removal
It also includes property rates based on the value of the properties. Low value properties do not pay rates.

Applying for indigent rates relief

If you are struggling to pay your municipal account, you may qualify for a rebate on your property rate.
This rebate gives you 15 000 litres of free water and 10 500 litres of sewage free every month, as well as free refuse collection and a rebate on rates
You may qualify if your monthly household income is R7 500 or less and/or if you are a pensioner or a social grant recipient

The importance of paying

As a property owner you are responsible for paying your municipal account
If you want to sell your house you will need to have settled any outstanding municipal accounts

I lost my original title deed - what should I do?

Firstly, don’t panic. There are steps in place to resolve this issue
It is important you replace the title deed with a replacement original. A copy of the title deed is not enough
You will need the original title deed to sell your property, if you get married or divorced, or if one of the property owners passes away
Only a conveyancer can apply for a replacement title deed from the deeds office
The conveyancer will charge for advertising costs and deeds office fees of around R1800
Contact our client administrator who will help you through the process and advise you what documents are required

Need help?

Please WhatsApp the TSC on +27 (65) 041 6832 and we shall assist you.

Unlocking Secure Home Ownership in Khayelitsha

Recently, the Tenure Support Centre (TSC) has collaborated with Hlano Financial Services (formerly Khayalethu Home Loans) on a groundbreaking initiative in Mandela Park, Khayelitsha. Our joint efforts are geared towards addressing persistent issues with title deeds, offering hope and security of tenure to numerous families and individuals in the area who have been waiting for this resolution for many years, and unlocking a significant amount of dead capital.

In the early 1990s, Mandela Park experienced rapid development. Many property owners turned to Hlano for mortgage bonds to finance their dream homes. Unfortunately, a significant number of these loans defaulted over time which meant property owners faced the constant threat of eviction and repossession of their homes.

In a bid to stop evictions of defaulting property owners by mortgages and sales in execution of the affected properties, the Western Cape Department of Human Settlements undertook to settle these Hlano loans over a 10-year period. However, due to a number of reasons, this has not happened, leaving some 1,200 property owners in the Western Cape without access to an unencumbered title deed for their homes. The TSC is working with Hlano, property owners and the Department of Infrastructure to find a solution for these cases.

In addition, there were some mortgages loans that were settled, but given the extensive time period since the loans were initiated, Hlano has struggled to arrange the cancellation of the bonds and the handover of title deeds. The TSC has helped, bringing clients to the TSC offices to sign documents and funding bond cancellation costs for pensioners.

Together with ward Councilor Mkutswana, we handed over the first title deeds to property owners last week.

The TSC is currently actively working on another 105 cases as a result of its collaborative effort with Hlano. This is a significant step towards providing homeowners in Mandela Park with formal security of tenure and peace of mind.

The first five Hlano clients holding their title deeds

Lessons from the Tenure Support Centre – 5 years on: Recording and Presentation

On Tuesday, 29th August the Tenure Support Centre hosted a public presentation to reflect on the highlights, lowlights and lessons learned over the past five years.

Thank you to all who joined, whether in-person and virtually. The response to the event and engagement with the content was hugely encouraging.

The full recording and presentation slides are available below.

For any questions related to the presentation or the TSC, please contact Illana Melzer (illana@71point4.com) or Kecia Rust (kecia@housingfinanceafrica.org).

EVENT: Lessons from the TSC – 5 years on

The Tenure Support Centre (formerly known as the Transaction Support Centre) has been assisting lower-income individuals resolve their title deed problems for over five years. Since its establishment in 2018 the TSC has assisted over 1700 clients and secured over 600 title deeds. It has become a trusted service provider for households who have problems with their title deeds and serves as a key referral point for government departments.

The TSC invites you to a presentation of the highlights and lowlights of the past five years. Using a combination of case studies and area-based analysis, the team will share our understanding of the nature, scale and ramifications of the title deed challenge across urban South Africa and the solutions required to solve it at scale.

This event is open to all with a keen interest in household wellbeing and wealth building, financial inclusion, township development and the viability of South African cities. Join us if you are a township property owner, employer, housing market practitioner, developer, real-estate professional, proptech expert, financier, conveyancer, policy maker, official, analyst, academic, journalist or just a regular person interested in the issue.

Event details

Tuesday, 29 August 2023

Workshop17 Watershed, Waterfront, Cape Town

3:30pm for 4pm start followed by drinks, snacks and networking

A link will be made available to anyone who cannot attend in-person

The TSC is a joint project of:

With funding support from:

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Subsidy delays: The challenges of government housing subsidy administration

Part of the TSC’s core purpose is to document the experiences of lower-income households as they navigate the formal property market system in South Africa, including their experiences with government housing subsidy programmes. In some ways, the experience of our clients in the subsidy space is not typical as the TSC team shoulders much of the administrative burden. As a result, our team has first-hand experience of the processes and systems that underpin the administration of the Individual and FLISP^{^[1]} housing subsidies.

Two common challenges relate to the issuing the Letters of Undertaking and delayed subsidy disbursements.

The challenge with the Letters of Undertaking is simple human error. The TSC has seen a number of cases where these letters are issued with the incorrect subsidy value, issued to the wrong conveyancing firm or other incorrect party, or issued with incorrect property / location details. It is an administrative nightmare to get these Letters of Undertaking amended and these errors cause significant delays to the transfer process.

The second issue is with delayed subsidy disbursements. In the TSC’s experience, it takes anywhere from five weeks to three months for the subsidy money to be paid to the receiving party, be that the bank who is financing the house or the sellers who are waiting for their money (see figure 1 below). This same issue was flagged in an external evaluation of the FLISP subsidy^[2] commissioned by the National Department of Human Settlements in 2021 , although little appears to have changed since then.

In cases where there are individual sellers who are expecting to receive subsidy funds as part or whole payment for the sale, this delay creates incredible frustration and stress. They have sold their property, their names are no longer on the title deed, they’ve most likely vacated the property and handed over the keys, but they do not have the money owed to them due to poor government administration. This is inexcusable.

To say that these delays detract from what is otherwise a helpful subsidy programme would be a great understatement. Delays create a poor perception of the subsidy programme and undermine trust in the formal system. Sellers and estate agents who have been party to subsidy financed transactions are unlikely to recommend the FLISP subsidy to others. In the TSC’s experience, sellers will increasingly simply not entertain a subsidised sale because of the lengthy delays in the process, so while a purchaser may qualify for a subsidy, he or she cannot actually access that subsidy because of an inability to find a willing seller.

The good news is that these should not be difficult problems to solve. The subsidy application process is already partly digitised and could be further streamlined. This would offer transparency to all parties involved, could help drive accountability and reduce human error in the process. The Department should also be able to schedule weekly if not daily payment runs for subsidy disbursements, aligned with transfers that have been finalised in the preceding time period.

Perhaps the barrier to change arises on the side of officials. They may lack incentives to create a subsidy process that is efficient and responsive. They may also be unaware of the impact of poor administration – they are not personally receiving the phone calls from irate sellers who cannot understand why it is taking so long for them to receive their money, or placating the buyer whose bond statement doesn’t reflect the subsidy money they are expecting.

To quote the World Bank, ‘any policy is only as good as its implementation’, and as highlighted in this blog, there are clear but resolvable implementation failures in the Individual and FLISP housing subsidy programmes that require attention. Until these seemingly small but significant issues are resolved, government housing subsidy programmes will continue to underperform on client experience, no matter how many times they’re given an external facelift.

[1] Recently rebranded to the ‘Help me Buy a home’ programme

[2] “With regards to payments, the NHFC and some Provinces should be able to pay within five (5) working days after a request for payment has been made by the attorneys but in many cases this process can take months according to some banks, resulting in offers for mortgage finance being cancelled.” Final Evaluation Report for the Implementation Evaluation of the Finance Linked Individual Subsidy Programme (FLISP). December 2021. Accessible: https://www.dhs.gov.za/sites/default/files/u16/REPORT%20FLISP.pdf

Unpacking property transfer costs

Costs of transfer (payable by the purchaser or new owner) on a R220 000 property include the costs of conveyancing of R8 440 (as per recommended guidelines published by the Law Society of South Africa) plus disbursements.

For most of the TSC’s clients, our conveyancing partner, STBB, provides professional services on a pro bono basis. But most clients need to pay direct disbursements. On a regular transfer on a R220 000 property these disbursements typically include:

- - Rates clearance certificate: R630 (including VAT)
  - Deeds Office fees: R642 (not VAT payable)
  - Deeds search: R71.91 (including VAT)

Together these costs amount to R1 343.91 – an amount which the TSC passes on to clients. In many cases, clients struggle to come up with this amount. We are therefore trying to reduce these costs as much as possible.

Rates clearance certificates

According to the City of Cape Town’s Tariffs, fees and charges book, the City charges R99.80 for an electronic rates clearance certificate (including VAT). Thus the bulk of the cost for rates clearance certificates charged by conveyancers actually goes to service providers. They have negotiated access to municipal rates clearance systems and enable conveyancers to request and receive digital access to rates clearance certificates.

There is a low-cost property option for rates clearance certificates which may well result in vastly reduced rates clearance costs, but it is not clear that the process will work on secondary transfers. The TSC is in the process of testing the system. If it works, we hope other conveyancers will adopt the same solution and pass on savings to their clients.

Deeds Office fees

The other significant disbursement is the Deeds Office fee of R642. This fee is levied by the Deeds Office on all property transfers on a sliding scale based on the value of the property. In line with the Deeds Registries Act of 1937, the Department of Agriculture, Land Reform and Rural Development publishes a fee schedule each year in the Government Gazette increasing these fees on an annual basis.

In line with the latest publication (from 28 February 2023) the fee for properties valued at R100 000 or less is a very reasonable R45. For properties above R100 000 but at or below R200 000 the cost is R101. As soon as you go above R200 000 the fee increases significantly to R642.

There is no rationale provided for the steep cost increase at the R200 000 mark.

When this matter was first highlighted to senior officials in the Deeds Office, they correctly pointed out that Deeds Office fees pale into insignificance in comparison with conveyancing fees. What the Deeds Office officials did not consider is that the vast majority of our clients qualify as pro bono clients and do not pay professional fees and that it is the combined disbursement cost that is really a stumbling block to transfer proceeding.

Small steps

Given the glacial pace of titling reform in South Africa, we are setting our sights low, focusing on small changes that can be implemented with minimal coordination or regulatory change. Top of our list are fees for rates clearance certificates and the Deeds Office fee. These fees add very little to the bottom line but make a huge difference to our clients. Perhaps with a bit of luck we can see some small change.