Operating since 2018, a free advice centre is helping to facilitate formal residential property transactions in Cape Town’s largest township, Khayelitsha. The Transaction Support Centre (TSC) has engaged with over 500 residents and provides buyers and sellers with critical services to transact formally in the residential resale market.
The project was set‐up by the Centre for Affordable Housing Finance in Africa (CAHF) and 71point4 in July 2018 and is supported by the pro bono conveyancing services of Abrahams & Gross attorneys, Norton Rose Fulbright and STBB. Initially funded by the National Treasury’s Cities Support Programme, the project received support from TUHF21, Cities Alliance and the Mastercard Foundation in 2020, and is now backed by the Oppenheimer Generations Fund until mid-2021.
Together they are tackling property-related issues within the country’s sizeable affordable housing market of homes valued at less than R600,000, which accounts for close to 60% of South Africa’s residential property market.
Title deeds offer wealth creating potential for homeowners and society
Access to clean, undisputed title deeds unlocks real value for home owners with wealth creating potential and also removes the risk inherent in the informal property sales market. It also enables mortgage growth in the country which not only impacts on household wealth but also positively impacts on society at large.
As at January 2021, the centre’s work has started to bear fruit and they have successfully finalised 129 cases including handing over 49 title deeds, 51 transfers currently in progress, and 29 cases involving subsidy payouts, wills and other housing related issues.
The process takes months and relies on active partnerships with the City of Cape Town, the Western Cape Department of Human Settlements, and their conveyancing partners Abrahams & Gross, Norton Rose Fulbright and STBB.
Challenges in informal property market are numerous
“We became involved at the outset in 2018 to assist the TSC to give effect to the transfer by running the conveyancing process for them,’ says Abrahams & Gross director, Nicholas Hayes.
The difficulties to regularise title and hand over a title deed to the rightful property owner are complex, time consuming and expensive.
“The challenges are numerous as often they will involve deceased estates, multiple heirs and scenarios where the property has been bought and sold a few times without the formal process being undertaken. This results in cases where the actual title deed holder is not the seller and the purchaser who is now trying to formalise this process is both out of pocket and cannot effect transfer.
“Many of the properties also have illegal structures and outstanding rates and water accounts which then need to be addressed. These scenarios present major practical problems that ordinarily would have exorbitant conveyancing fees attached to rectify the situation,” says Hayes.
Cutting the red tape around property transactions
What started as a centre to support the resale market has grown into a hub that assists with all title deed issues in informal areas ranging from regularising historical informal cash sales, effecting deceased estate transfers, assisting with the primary transfer title deed backlog with government, drafting of Wills, helping residents access housing and building subsidies, to mention a few of their daily tasks.
“Nicholas Hayes is one of the primary conveyancers on the project at the moment,” says 71point4’s Lisa Hutsebaut. “We instruct him on a range of matters, from deceased estate transfers to title deed rectifications to regularisation of cash sales. Without the pro bono support of Abrahams & Gross the TSC would not be able to deliver its service at all.”
Difficult but rewarding work
Of the 49 new proud legal owners of their properties, several are now interested in accessing building loans to finance the construction of backyard rental properties to provide an additional income source for their household.
The project has funding until mid-2021 and has shown just how effective a support centre like this can be in resolving the myriad of title deed issues in informal areas. “I believe there is scope to roll out centres like this nationwide with the right buy in from government and the right support for the project,” concludes Hutsebaut.
Hayes concurs: “There is a real need to provide effective property and conveyancing services to the affordable housing market. Having real title and ownership to your own property is a life-changing experience that enables people to take pride in their homes, maintain them, provide finance for their family and progress in life.”
The TSC’s task of assisting lower-income groups to have access to efficient, safe and legal processes, and thereby unlocking the value of their property as a pathway to prosperity, is working.
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For more info about the Transaction Support Centre and the lessons learnt, see here: https://www.71point4.com/wp-content/uploads/2020/07/Transaction-Support-Centre_Lessons-Learned_July2020.pdf
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