WHEN IS THE DEEDS OFFICE RE-OPENING? IS IT REALISTIC TO EXPECT GOVERNMENT TO DECLARE THE DEEDS OFFICE TO BE AN ESSENTIAL SERVICE?
We have read with interest a recent appeal to Government from leaders in the property industry to allow the Deeds Office to operate with skeleton staff, analogous perhaps to an “essential service” in terms of the current regulations.
The article, which appeared in the industry’s newsletter and which was repeated in social media, creates an impression: (a) that property sales cannot take place in the absence of a functioning Deeds Office, and (b) that there is a direct link between the agent (and his sales transaction) and the Deeds Office. In doing so, it however fails to consider all the role-players involved in the wider property sector.
Given the financial impact lockdown is having, and probably will continue to have, on estate agents’ incomes for many months to come, this is an understandable appeal and is echoed by many other industries. The authors highlight the loss of income to agents due to property registrations not taking place and only mention other role players in property in passing. Perhaps the authors have not thought through the functions of the other role-players and the potential consequences such a decision will have. The post creates the impression that the Deeds Office functions in isolation (excuse the pun under prevailing conditions) rather than being the ultimate destination of property transactions, and also takes a rather simplified view of how the Deeds Office operates.
The Deeds Office cannot work on a skeleton staff. The Registrars need their staff to process their work according to rigorous levels and can only register Deeds once they are meticulously checked. This requires various levels of examination. If the Deeds Office is re-opened, we must also assume that all the cogs in the conveyancing process must be allowed to opperate. It is simply not possible for property transfers and mortgage bonds to be registered in the Deeds Office without their full supporting staff and the executing conveyancers and their clerks, and of course their paralegals and accounting staff in their law offices who process the payments to the clients.
The Deeds Office deals with the full spectrum of property transactions, namely second-hand sales, plot and plan sales, new developments, sectional scheme registrations, subdivisions, consolidations and removal of title deed conditions, mortgage bonds and bond cancellations, to mention just the most common transactions.
If this is entertained, then we must also allow the following professions and state offices to open their doors: the Receiver of Revenue’s transfer duty/VAT department, the Surveyor General’s office, land surveyors who are in private practice; town planners, planning departments of local municipalities (the rates clearance departments are functioning digitally); managing agents; home owner associations; valuators; compliance companies; handymen and construction workers; bond originators and the mortgage bond departments of the banks; removal companies; the civil courts and sheriffs’ offices (in the event that evictions are required); and of course, central in the process, the law firms specialising in Conveyancing. Their offices must open to draft documents and consult with clients to sign bond and transfer documents to be lodged in the Deeds Office. And last but not least, according to the EAAB’s 2018/2019 Audit Report, there are currently around 42 000 registered estate agents in South Africa, including interns, full status agents and principals, who will want to get up and running, meeting clients, viewing properties, etc. It is still possible to sell property while in isolation, and many estate agents are managing to work from home. The problem lies with the processes and number of people that are required, between date of sale and registration of transfer!
What we are trying to point out is that the Deeds Office cannot function in isolation. The entire property industry (or a large portion of it) will have to be declared “essential”. Our leaders have to balance the future of our economy against the objectives they are trying to achieve with the lockdown. We all know that the property and associated financial sector is one of the cornerstones of our economy, but viewed against Government’s intended objectives, we doubt if Government will heed such an appeal.
While from a purely financial survival point of view, we in the Conveyancing profession, and our frustrated clients, would welcome re-opening the property sector, the hard and cold truth is that such a re-opening will expose hundreds of thousands of people to the risk of COVID-19 infection on a daily basis, not just a several thousand state workers. One must bear in mind that the vast majority of us have families to return home to every evening, and they too will be exposed to the risk of infection. In simple terms, and as disappointing as it is to admit, it is therefore not likely or advisable to declare the Deeds Office as an essential service or open it on a reduced basis. It will simply undo all we have achieved through lockdown.
P.S – We have just learnt that Government has been in contact with the Legal Practice Council of SA, calling for submissions on declaring all legal services to be seen as essential services. We will keep you posted.
P.P.S – We have also been alerted to a document that is doing the rounds, which was allegedly issued by the Department of Human Settlements. It refers to statistics for February from all deeds offices in SA, save for Cape Town, and confirms that the Deeds Office will NOT open on 20 April 2020 (today). We have no idea what the purpose or origin of this document is or was, and whether it intends to refer to all the other Deeds Offices, save for Cape Town or whether Cape Town was omitted as an oversight.
But if all the other Deeds Offices will remain closed, it is even more unlikely that the Cape Town Deeds Office will open.
Lastly we are also hearing rumours that the Cape Town Deeds Office is going to reopen on 4 May 2020. We are trying to authenticate this, but having visited the Provincial Department of Human Settlement’s website, we can find no evidence that any decision has been taken as yet, as to when the Deeds Office will reopen.
We wish you well in these troubled times. Stay safe please.
Andrew Murray and Robert Krautkrämer
Miltons Matsemela Inc