Discussions With Minister Of Justice To Have Deeds Office Re-Opened As Essential Service
REBOSA and Better Bond, had in previous weeks petitioned the Minister of The Department of Trade and Industry (DTI) as well as members of the National Command Council requesting certain property related services be classified as essential and thus reinstated. To date and unfortunately, the DTI has only responded with a written acknowledgement to the effect that it will consider the request. But, with the talks ongoing with the Chief Register of Deeds and its counterparts in the Provinces as well as discussion with the various Ministers and their Director Generals the pace does seem to be quickening.
We know the following thus far:
1. THE DEEDS OFFICE
Should the Deeds Office reopened, there will be delays due to the computerised Deeds Office Tracking System or DOTS. DOTS is programmed to reject matters that have been in the Deed Office for 12 days or more. It is not clear yet how the Deeds Offices will function, so we are predicting delays beyond the regulation time of 5 working days. Regulation time being the time that a transfer moves from lodgement status to prep status before it is executed and registered.
It is expected that once reopened the Director General will issue guidelines as to the manner and means that the office will function. These guidelines may also well deal with expired rates and rejected transactions amongst other matters in the Deeds Office. But this is speculation, and we will have to see what the Director General and the various Registrars of Deeds decide. Further, these guidelines and directives may deal with public access to the Deed Office, how searches, lodgements and executions will be conducted and managed and even if a full staff for the Deeds Office will be entitled to return. Until the threat of the COVID-19 pandemic is lifted the "social distancing" and heightened hygiene requirements will remain in place. We await further word here on this.
2. RATES CLEARANCES
The City of Cape Town is currently engaging the Chief Registrar of Deeds to negotiate leniency in respect of expired rates clearance certificates for those matters already lodged in the Deeds Office. Other measures, such as extensions of lapsed rates clearances and automatic extensions, are under discussion. The City of Cape Town and other municipalities are working on a skeleton staff basis, so turnaround times will be longer. Agents must properly inform potential sellers of the possibility of delays here.
It must be noted that we have not been informed if the Municipal Town Planning Departments or Building Control will also be on a skeleton staff or staffed at all. We will keep you updated here.
3. TRANSFER DUTY
The Transfer Duty section within SARS is operating at a reduced capacity and with a skeleton staff. Currently turnaround times of 9 working days are being observed. Conveyancers are subject to strict timelines and should not apply for duplicate transfer duty receipts as this causes substantial delays and confusion not only at SARS but also with Attorneys. Again agents must inform potential purchasers that SARS is running at a reduced capacity.
4. THE MASTER' S OFFICE
Regarding the various Master's Offices, the Director General, will, if all goes according to plan, issue a directive or directives next week requesting all designated staff to return to work on a skeleton and roster basis. Confirmation to be sought in due course. The various Master's offices will remain closed to all members of the public, including practitioners. This is great news as the Master's Office may start accepting new estates and also processing all the current estates. It should be noted that we at ESI Attorneys cannot now say what the turnaround times will be on the handling of matters within the office.
5. THE SURVEYOR GENERAL
ESI Attorneys has not received any notification as to whether the Minister or the Director General for the Department of Rural Development and Land Reform will issue similar instruction to the Chief Surveyor General and his deputies to open the said office on a skeleton staff. Meaning that all developments, sectional schemes awaiting approval, subdivisions, consolidations, and removal of servitudes to mention but a few, cannot be examined and approved. Placing one important part of the property system on hold whilst potentially opening another on a limited basis.
It is possible that when the Deeds Office reopens or partially reopens that the Surveyor General may also then be reopened as both offices serve the property industry. If you would like to access any of the diagrams or cadastral images for the Republic of South Africa you can access the site here.
4. CAN THE DEEDS OFFICE WORK ON A SKELETON STAFF?
In a separate media release earlier today, Andrew Murray and Robert Krautkrämer of Miltons Matsemela Inc however pointed out that 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 operate. 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!
According to Andrew Murray and Robert Krautkrämer, 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.