TSC Case Study 3: Entitled and untitled

The Transaction Support Centre (TSC) in Khayelitsha has been operational for just over six months and, as at 13 December 2018, has received over 100 cases from clients looking for assistance with property-related issues. While the vision of the TSC is to support property transactions, most of our cases deal with administrative failure – title deed backlogs and housing administrative issues, and poor engagement with formal processes – informal cash sales and intestate issues.

This case study series aims to document the real-lfe challenges faced by TSC clients as well as the process we have followed to try find a solution to their problem. In doing so we aim to highlight the policy, legislative and administrative issues that require attention in order to make high-potential property markets, like that in Khayelitsha, investment ready.

Entitled and untitled

Nozipho* (not her real name) approached us asking for assistance with selling her RDP home which she received in 2014. She is hoping to sell the property for R200 000. One of our other TSC clients is interested in buying this property and is “purchase-ready” having been cleared on the HSS and passing the Ooba Bond Indicator (OBI) credit check. However, Nozipho (the potential seller) faces two challenges with selling her property. Firstly, the property has not yet passed its 8-year pre-emptive clause as set out in the Housing Act 107 of 1997. This means she cannot sell her property without permission from the Provincial Department of Human Settlements. Secondly, she does not have a title deed for the property.

While the pre-emptive clause can be waived by the Provincial Department of Human Settlements conditional on her reasons for selling the property, the issue of her title deed requires resolution irrespective of the outcome of that process. On investigation, the TSC confirmed that the property in question is still owned by the City of Cape Town (see figure 1 below).

Figure 1: Deeds office search

 

The property in question is circled in the image below.

The TSC brought this case to the attention of the City’s Urban Integration team who confirmed that the property is in one of their projects where title has not yet been transferred. The project, The Silvertown Housing Development, comprises 1 316 properties on four sites. It appears the general plan lapsed before the project was completed. While the City applied and obtained an extension for the plan, by that stage the three-year contract under which the conveyancers had been appointed had expired. The City therefore has to appoint new conveyancers who will process the title deeds, but it is likely to take between six months and one year for the client to obtain a title deed. Nozipho is unlikely to wait, and may well choose to sell the property informally, creating more administrative problems for the City (and for subsequent ‘owners’). Given that the only requirement for the client to obtain a title deed immediately is the signature of a City official, the TSC suggested handling this particular case directly with a conveyancer who has agreed to provide services free of charge.

The TSC is following up on this specific case with the City of Cape Town in an effort to fast track the transfer this process for our client so that she can proceed with the sale.

 

A curious aside: while exploring the property for this case study we noticed a vacant parcel of land nearby. That land has no owner according to the City Viewer (see images below).

 

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