By Jessica Robey, senior research analyst, 71point4

Since 2018, the Transaction Support Centre (TSC) has worked to support formal property market transactions in lower-income neighbourhoods. A large part of the effort focuses on resolving title deed issues including regularising informal or off-register transactions that have taken place in the past, winding up deceased estates and facilitating primary transfer of subsidy properties that are still owned by the State.

Facilitating secure tenure and  unlocking property value in Khayelitsha

The cases are inherently complex and can take many months to resolve. However, it is critical work that must be done. By resolving client cases, the TSC not only provides homeowners with secure tenure, but it also unlocks the value of properties that would otherwise be ‘dead capital’ – assets that cannot be legally traded or generate wealth. While the challenges of this work are significant, it holds the potential to fundamentally shift the wealth trajectories of households, the prospects for renewal and economic development of South Africa’s townships and the financial sustainability of cities.

Through its physical advice office based in Makhaza, Khayelitsha, the TSC makes it as easy and as affordable as possible for clients to formalise property market transactions. To-date, the TSC has helped nearly 150 households obtain their title deeds, with another 140 title deeds lodged at the Deeds Office. At the same time, the TSC works closely with various spheres of government as well as range of private sector provides to address the more systemic issues that result in an expensive and inaccessible formal property transfer system.

Informal cash sales regularised

In many areas, property owners sell their properties for cash using informal processes endorsed by local leadership, without updating ownership records at the deed’s registry. To-date, the TSC has seen 146 cases of clients seeking assistance with regularising a previous informal cash sale. These cases can be very time-consuming to resolve, especially if the whereabouts of the registered owners is unknown or they are deceased. Sixteen informal cash sale cases have been successfully regularised and title deeds handed over to clients with a further 14 transfers currently in progress.

Case study 1

Photo by TSC

Photo by TSC

In July 2019, Mr Mosalo approached the TSC for assistance with regularising ownership of his property in Khayelitsha. When he bought the property, the seller was paid in cash and no formal sale agreement was signed. The only ‘proof’ of purchase he received was the original title deed from the seller. Having not kept in contact with the seller, it took Mr Mosalo a few months to locate the seller who now resides in rural Eastern Cape. Fortunately, the seller was willing to cooperate and signed the new sale agreement prepared by the TSC. The process was delayed because the seller only had a temporary ID which the City of Cape Town initially would not accept for the rates clearance process. After intervention by supportive City officials, a work-around plan was developed and the TSC managed to get Mr Mosalo’s title deed registered and handed over to him in November 2020.

Case study 2

Photo by TSC

Photo by TSC

Mr Mafani bought his property in Khayelitsha informally in 1997. As with most informal cash sales, no formal sale agreement was signed and so the property could not be transferred into his name. Fortunately, Mr Mafani was still in contact with the seller who signed a sale agreement. But two challenges prevented a quick resolution of the case. The first was that the seller’s date of birth was recorded incorrectly on the title deed, and the second was that the original title deed was lost. The regulations to apply for a new title deed also changed midway through this case and required the TSC to advertise the application in a local newspaper for two weeks before it could be processed. Nonetheless, after nine patient months, Mr Mafani received his title deed in November 2020 making him a very happy and proud legal property owner.

Case study 3

Photo by TSC

Photo by TSC

The TSC helped Mrs Mtini transfer her property into her name. For the past 16 years the property had been registered in her deceased husband’s name. While Mrs Mtini was nominated a exector of her husband’s estate in 2010, she was not aware of what steps to follow to transfer the property into her name. Now that she has the title deed, she hopes to access a buildng subsidy to build a top structure on her plot of land.

Deceased estates resolved

Recent analysis of data from the population register and deeds data indicates that 15% of properties in Khayelitsha are still registered in the names of deceased people. To-date, the TSC has logged 147 deceased estate cases. Of those, nine cases have been successfully resolved with another 20 transfers in progress. These cases can be particularly challenging; in some cases, the estate has not been reported to the Master’s Office, and the deceased rarely have Wills in place. The documentation requirements are also onerous and the Masters office slow, with its operations completely stopping during the Covid-19 lockdown.

Primary transfers facilitated

In mid-2020, the TSC with funding from the Mastercard Foundation, conducted a door-to-door survey of 1 079 properties in Khayelitsha where no primary transfer had taken place. The survey collected detailed data on the current occupants of the property and reported ownership which was compared against the Government’s beneficiary lists for the properties. Where there was a match between these records, the TSC facilitates signature on the properties which sets in motion the transfer of properties to the beneficiaries.
After an extensive data validation process and Covid-19 related delays, the TSC is very pleased to have the first 98 title deeds ready to be handed out to beneficiaries and a further 140 title deeds already lodged in the Deeds Office and waiting to be released. Overall, the TSC expects a total of 484 properties to be transferred to beneficiaries in the Makhaza East, West and Central regions (Zone 14 is being dealt with separately), with the remaining cases requiring further investigation or dispute resolution.

Way forward

The TSC has ambitious plans for the year ahead including scaling up its operations into Gauteng, developing a blockchain-based case management and increasing its efforts to shift underlying policies and regulations that currently effectively exclude low-value properties from the formal property transfer system.
You can follow the TSC’s progress on both the Centre for Affordable Housing Finance in Africa (CAHF) and 71point4’s websites, as well as the projects Facebook page @TSCKhayelitsha.

About the Transaction Support Centre (TSC)

The TSC is a joint project of CAHF and 71point4 and is currently supported by The Oppenheimer Generations Fund.