- 29th Jul 2022
- Posted by: Gil Harper
- Category: Uncategorised
For thousands of people, homeownership is being stifled by red tape and high registration costs.
However, a pilot programme implemented by International Finance Corporation (IFC) in collaboration with the Vuthela iLembe Local Economic Development Programme is exploring opportunities to reduce the cost burden on homeowners trying to obtain their title deeds. The pilot looked at the possibility of securing the services of conveyancers for free in exchange for B-BBEE points.
The first two beneficiaries who have benefited from this arrangement have signed and received their title deeds after HSG Attorneys Incorporated handled the case file without fee and in terms of the applicable B-BBEE socio-economic spend.
Under the Private Sector Component of the Vuthela project, KwaDukuza and Mandeni Municipalities have been working closely with the IFC, a member of the World Bank Group, to make it easier to do business in the district, thereby attracting investment, growth and jobs. This work has primarily focused on the KwaDukuza Municipality, including making it easier to get electricity and implementing reforms in the municipal planning department, important given the property sector growth in the municipality. The third leg of IFC’s “doing business” work is focused on property registration and is being implemented in both KwaDukuza and Mandeni by GeoAfrika who have been contracted by the Vuthela programme.
“South Africa has a property registration system that is reliable, but it is not used by many South Africans because it is an expensive and complex system that is beyond the reach of the average citizen,” said Senior Operations Office at the IFC, Amina El Zayat.
It is estimated that 70% of the population do not use the official systems and that most of the lower-value real estate market activity is conducted informally. This limits the security of tenure of homeowners. One of the focus areas of the project looked at a simpler and more affordable system for registering transactions for low-income areas.
More than 300 case files were collated from an office set up to assist Sundumbili residents with getting their title deeds which they didn’t have due to them being lost, intestate estates, divorces and informal sales or never having received it when they received the house. The majority of these are being dealt by the Title Deed Adjudication Committee which has been established and funded by the province and supported by the project.
Considering the cost of conveyancing could be an inhibiting factor for low-income households, the project team decided to test if they could get pro-bono conveyancing work on two cases in exchange for B-BBEE spend points. The ultimate test was to validate whether the conveyancing fees as well as disbursement costs, that were paid by the conveyancing firm during the course of the transfer process, could be claimed against their B-BBEE social development spend target.
“This is exciting because it opens the door for a potential funding stream for qualifying beneficiaries from a large and previously untapped source – corporate B-BBEE spend. This could potentially attract large law firms to provide pro-bono conveyancing services to further improve their B-BBEE credentials making that service more accessible to the beneficiaries who generally couldn’t afford this service,” said Ms El Zayat.
The project team was very happy to hand over the title deeds to the two beneficiaries at no cost to them.
PIC: Mr Sifunda Amos Nkosi from Sundumbili B signing his title deeds