Title Deeds backlog: Western Cape Department of Human Settlements and Land Reform briefing; Deeds Office: Process of registering deeds

Human Settlements (WCPP)

28 August 2018
Chairperson: Ms M Maseko (DA)
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Meeting Summary

The Western Cape Department of Human Settlements briefed the Western Cape Provincial Parliament’s Standing Committee on Human Settlements on the status of the title deed backlog and possible policy amendments to address the backlog. the backlogs are of those properties of projects that were done from 1994 to 2014. Backlogs vary between municipalities from a 2% backlog in Swartland to 45% in Knysna. The backlog does not come from the Deeds Office but from trying to sort out who the qualifying beneficiaries are and who to transfer properties to. At the moment the Department performs about 10 000 transfers annually and this includes backlog properties. The Department is mainly focusing on backlog properties from 1994 to 2010, although attention is given to properties after 2010. The backlog of properties currently is 33 554 properties. 253 811 Breaking New Ground houses have been transferred since 1994.

A smaller challenge the Department faces is in the case where there are problems with the establishment of townships. There are also cases where properties have not been released from National Government to municipalities such as in Grabouw, Saldanha and Wellington. One of the major problems the Department faces is where the original beneficiaries are no longer in the original houses and the Department cannot track them down or contact them.

The Department is creating an enabling environment for municipalities by providing financial, web, policy and consultative support in dealing with the transfers of properties to beneficiaries. There has been more focus on ensuring that title deeds get transferred to beneficiaries as soon as possible after the construction phase of projects.

The Deeds Office briefed the Committee on the day to day process of registering deeds. The Deeds Office adheres to a 12-day process, but given the quantity of deeds they receive and other issues sometimes it is not possible to register a deed within the 12-day period. The entire deeds registration process is to ensure the legality of the documents and the accuracy of the information contained therein.

Members of the Standing Committee asked the Department questions on the weak systems for tracing beneficiaries and what the Department is doing to address this weakness; and also wanted to know how the Department is dealing with the problem of properties that still need to be released from National Government to municipalities.

Meeting report

Opening Remarks
The Chairperson noted an apology from the MEC for Human Settlements in the Western Cape, Mr Bonginkosi Madikizela.

Briefing by the Western Cape Department of Human Settlements
Mr Lionel Esterhuizen Director: Land and Asset Management for the Department of Human Settlements in the Western Cape, said that backlogs refer to those properties which have not been transferred to beneficiaries in projects that were done and approved since 1994 to 2014. Backlogs vary from municipality to municipality, for example in Swartland the backlog is only 2% and in Knysna the backlog is 45%, which is the highest backlog. He said it is important to note that the backlogs are not the backlogs experienced in the Deeds registry. The challenge is getting cases to the Deeds registry and at the moment the biggest problem is getting qualifying beneficiaries to sort out who the qualifying beneficiaries are and who to transfer the properties to.

At the moment the Department performs about 10 000 transfers of properties annually and this includes backlog properties as well. The Department is focusing on backlog properties from 1994 to 2010. There is still focus given to properties after 2010. The backlog of properties currently is 33 554 properties. 253 811 Breaking New Ground (BNG) houses have been transferred since 1994.

Mr Esterhuizen said in some cases a person has been accommodated in the property but there is no title deed and there are various reasons for that. In some cases, there was a bigger focus on getting people in houses and handing over a key and the paper process was neglected. Transferring the property to the beneficiary becomes a big problem in a case where the original beneficiary is not in the property anymore and there is someone else living in that property, or when there is non-qualification. To get this process approved again takes a long time.
A smaller portion of the Department’s problems is where in some cases there are issues with the establishment of townships. In other cases, properties have not been released as is the case in Grabouw, Saldanha and Wellington, where the Department is struggling with thousands of state owned properties that still need to be released from National Government to Municipalities. The Department is dealing with this at the highest level between the MEC and the National Minister. Unfortunately, there is a high turnover in those departments so getting a constant flow of attention on these challenges is sometimes problematic. And then because of the time lapse between the actual accommodation and the allocation of a house and the transfer, it happens from time to time that people have sold properties informally and when the Department gets to the house again there is someone else there. This is a problem the Department identified some years back and they have now addressed that. The Department has dealt with most of the issues relating to deaths, divorces and disappearance of occupants.  

The Department is creating an enabling environment for municipalities. The Western Cape is a bit different from many other provinces where the Department of Human Settlements is basically an enabler where they finance and make it possible for municipalities to implement these processes. The Department’s intervention up to this stage was mostly to enable municipalities by assisting them in identifying properties that still need to be transferred and by giving municipalities extra funding. The original funding did make provision for transfers but because of the long delay and time taken to identify beneficiaries’ higher costs are involved now. The Department has recently appointed a framework of professionals such as conveyancers, land surveyors and planners that the Department can make available to assist municipalities. Another problem has been where the Department gets to a property and here is an occupant or non-qualifier in the property and not the original beneficiary. A policy guideline has been crafted which is being sent to municipalities to assist them in how to deal with such a situation. The Department has crafted a policy guideline which is being issued by municipalities to assist them on what to do when they get to a situation like that. A web facility has been developed where municipalities can go online and identify spatially where these properties are. Municipalities can now identify properties per Erf number. The Department has also improved their tracking of transfers and they are getting reports from a service provider based on data from the Deeds Office to track how many transfers have been done in a particular municipality.

Mr Esterhuizen said the National Department of Human Settlements has crafted a new grant, the Title Restoration grant, which is earmarked to assist the Department in this new intervention. The Department has a Provincial steering committee which meets with municipalities, and they also have the Deeds registry represented there, where they share the progress made and municipalities can share their challenges with the Department. The National Department also has the National steering committee where the Provinces meeting with the Metros where they also track progress and challenges.

The Department has made certain changes to their policies which inter alia retains R2 000 of the costs which is more than the Department has allocated in the transfer costs. The R2 000 is retained and only when the property transfer is lodged at the Deeds Registry does the Department release that R2 000 to the developers or the municipality. The Department also has policy interventions as far as their payments and transfers are concerned and project gates that must be opened before developers can proceed with the project. For example, in the Department’s planning process, they want to make sure that the developers’ or municipalities’ planning processes have been finalised before the top structures are actually started. Transfers of title deeds should happen very quickly after the construction of houses.

Briefing by the Deeds Office

Mr Brian Daniels, Assistant Registrar at the Deeds Office, said in preparation for this meeting they thought it wise to give the Delegates and Committee Members an overview of the process of how Deeds are actually registered in a Deeds Registry. The Deeds Office timeframes are set up in a way to ensure legal certainty of the document that comes out at the end of the process. The documents issued by the Registrar and signed by him confirms that the contents of that document have been checked, rechecked and balanced to ensure that the documents that turn out at the end of the process are as accurate as possible.

Document on the Day to Day Process of the Registration Process
The chart lists a total of 12 days, this is based on one deed but the Deeds Office gets between 800 to 1300 deeds a day. This does impact on the ability to turn out a deed by the 12-day period.

Mr Daniels said on day 1 they have the lodgement, data prep and deeds distribution. The Deeds Office lodgement hours are from 8am to 10:15am, which is when they close off as the Deeds lodged for that morning still need to be processed by the rest of the office.
Those same deeds are made into bundles or packs and then would be moved to the computer section where they would be printed, Deeds Office records would be checked, properties would be checked, those prints would be inserted in the covers of the deeds and those would be handed over to the Deeds Office’s distribution section.

Day 2 is where people sort the deeds out and the Deeds Office has a total of 47 junior examiners at the moment, between 800 to 1200 deeds would be sorted out to them for the day. The examiners would have 24 hours to examine those deeds. Every examiner would get a maximum of 38 deeds per day.

On day 3 those deeds would be returned.

On day 4 the deeds would be going to the senior examiner. This is part of the quality assurance. The senior examiner has the authority to pass or reject the deed for whatever shortcomings the deed may have, if there is any information in the deed that is wrong. If this does occur the deed is to be sent back to the conveyancers for repairs.

On day 5 the deed would be handed over to the monitor who is the Assistant Registrar. The monitor will check and balance the deeds rejected by the senior examiner to ensure that it was validly rejected or invalidly passed.

On day 6 the deeds are returned to the prep room where the deeds are handed back to the conveyancer to check the notes and issues that the examiners may have picked up. The conveyancer will attend to those and make sure that they are then fixed.

The Deeds Office is built in a 5-day layover period in the prep room. This 5-day layover period will allow the conveyancer to put the finances and other things in order. If the deed stays longer than 5 days the Deeds Office’s Doc system will automatically reject the deed.

Day 7 is when the deed gets registered. At the presented moment, although the process is worked out on the 7th day, the Deeds Office is pushing the amount of days into 6 days. From day 1 to day 7 they have the examination process and this is the core function of the Deeds Office.  

After the registration the deeds will be numbered.

On day 8 there will be final checking or quality control.

Days 9 and 10 in the Deeds Office are for capturing that information. The previous owners go into the history of that property and the current owner becomes known. In that way the Deeds office will be able to build up a historical record of a particular property.

Days 10 and 11 are for scanning and archiving. Documents come in paper form and they get put into electronic form. Once this is done and verified a deed will be delivered on day 12 to a section in the Deeds Office where it is returned back to the conveyancer. The Deeds office keeps the electronic version and the paper copy would then be returned to the conveyancer.

In the last 2 years the Deeds Office has embarked on the Deeds Office tracking system. Which indicates that every deed lodged at the Deeds Office gets a barcode and this barcode allows them to track the deed in the office throughout the period.  They create situations where they might not achieve such as staff turnovers and systems going down. The Deeds Office tries to achieve the process in the 12-day process as far as possible.

Discussion

Ms T Dijana (ANC) asked for further clarity on the weak systems to trace original beneficiaries from the Department of Human Settlements.

Mr Esterhuizen said when they get to a house which was allocated to a beneficiary and they do no find the original beneficiary in that property, they do not have a contact telephone number where they can contact that person, they do not have an address to write to that person. It is a problem for the Department. When beneficiaries apply for a subsidy they sometimes live in informal settlements so they do not have a fixed address where the Department can go back to. This is what the Department calls weak systems. It is possible for the Department to go to the Department of Home Affairs (DHA) since it has more updated contact details of those people. However, the DHA cannot release personal information to anyone because of the Protection of Private Information Act. The Process that the Department follows is to place advertisements in newspapers and put out notices in public places to notify that the Department is looking for people who were beneficiaries.

The Chairperson said the issue with the weak system for tracing beneficiaries must have been a problem for many years. What is the Department doing to address this weakness?

Mr Esterhuizen said they are shortening the period from when a beneficiary moves into a house to when the beneficiary receives the title deed. The Department has only done this in two projects. The Department has now put in policy measures where the Department retains some money to make sure that the developer does the title deed transfer as soon as possible. Before the developer goes on to the construction phase all the approvals and the transfer register must be in place. The quicker the transfers are made the smaller the chances of not finding the beneficiaries.

Mr T Simmers asked if a beneficiary is approved for a BNG house but the individual already has a built structure, if the Department is made aware that a BNG house has been built on a property where the owner already has a built structure, what would happen in the title deeds process.?

Mr Esterhuizen asked if the person is the beneficiary or if it is a different beneficiary.

Mr Simmers said the project he is referring to is where the Department built 20 BNG houses on plots where there already were houses. Originally the beneficiaries were on the waiting list, but the project took so long that the beneficiaries built their own houses. When the project was finally approved the Department built houses on the same plots that already had houses. Will the beneficiaries get title deeds for those houses?

Mr Esterhuizen said that if the person who built the house has the title deed, and that person is the owner of the property, the Department cannot give ownership to another person unless the owner sells the property to a new beneficiary. If a municipality makes improvements on a beneficiary’s property by building a house on the property, the owner of the property owns whatever is on that property including the new house. It does cost the taxpayer but the Department cannot transfer ownership of the property to a new beneficiary unless the owner of the property sells the property.  

Mr Thando Mguli, Head of Department for the Western Cape Department of Human Settlements, said that there are many scenarios where beneficiaries build what looks like a proper house on allocated plots but it may not be to the correct standards. The Department may not necessarily demolish such a house but they will build the prescribed house on the allocated plot. This happens under the consolidation subsidy.

The Chairperson said the question was not about the structure of the house but about the title deed to an Erf number with a house already built on it, if the Department builds an allocated house on that plot who is the beneficiary in that case.

Mr Mguli said it is the person who holds the title deed.

Mr Simmers said his question is based on an actual event. The person he is referring to built a house on a site. In that area you have to submit plans for approval to build a house. Then the Department of Human Settlements came and for some or other reason the Department built a BNG house next to the existing house. The person must have already had a title deed, what would happen in a case like that?

Mr Esterhuizen said perhaps if they had the details they can get more clarity on the issue. He asked for the information to be submitted to him.

Mr Daniels said in the process he has explained if a deed comes into the office and there is an indication that a BNG house is to be built on the same property where there is already a house, the deeds process would flag it.

The Chairperson asked for the numbers regarding the 2% backlog in Swartland, 45% backlog in Knysna and the current uncertainty of 40%.

Mr Greg De Villiers, Chief Engineer for the Department of Human Settlements in the Western Cape, said that information could be forwarded to the Committee. They have the figures for all municipalities and this can give the Committee an idea of the numbers.

Ms W Philander (DA) asked if the directive provided to municipalities covers, aside from the ownership issue of someone renting a house and the owner not being present, there are also properties where illegal extensions took place, does the directive cover that as well.

Mr De Villiers replied that it does. You get illegal extensions, improvements, it does become a factor the longer you left it the bigger the problem and you also get encroachments over boundaries which can be very complex to fix and very costly. The Department is aware of that and they tend to focus on the transfer the land.

The Chairperson asked how far is the Grabouw transfer of the public works land for those communities. Do they have their title deeds yet?

Mr Mguli said they are still in limbo until such time as the Department gets the township establishment finalised. Until the Department of Public Works transfers the land, the Department of Human Settlements cannot do anything.  

The Chairperson asked if the municipality there will allow people to do extensions even though people do not have title deeds.

The Department of Human Settlements said that they are allowed to get their plans approved by municipalities but legally they cannot transfer the properties over to beneficiaries. If the house is still in the name of the Western Cape Government beneficiaries can make application for alterations to the house that they can get the Department to sign for them until the transfer occurs.

The Chairperson asked what is being done to address this problem.

The Department said that they are trying to make sure that the paper processes are all in order before the houses are actually built. They are also trying to get title deeds handed over to beneficiaries as soon as possible to avoid this problem and the challenges associated with them.

Mr Daniels said the Deeds Office is very involved in the process. Currently they serve on the Title Restoration Project where they meet every 3 months and try to assist municipalities with legislative issues. The Deeds Office has issued requests to municipalities to inform the Deeds Office if they have difficulties with township registration so that the Deeds Office can assist them with the challenges at hand. So far only one municipality has taken up the offer, the Overberg municipality. The Deeds Office has also put in place a system where if municipalities come to the Deeds Office with a batch of deeds that need to be registered with a request that the deeds are a land title restoration project, the Registrar would then approve that the deeds would be registered in a shorter timed process.

The Chairperson thanked the Department and the Deeds Office for the presentations.

The Meeting was adjourned.

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