Title deed backlog still plagues SA

One of the top priorities for Nomaindia Mfeketo since her appointment in February as Minister of Human Settlements under President Cyril Ramaphosa’s new cabinet is the herculean task of clearing SA’s title deeds backlog.

Many before Mfeketo, including her predecessor Lindiwe Sisulu, have taken on the project of restoring title deeds to people who already live in government-supplied, low-cost houses. However, the title deed conundrum has proven difficult to solve for many years.

The delivery of low-cost houses has been the government’s success story since 1994, with nearly four million houses built for the poor. Yet an estimated one million people do not have registered title deeds for the homes they already live in.

In fact, the exact number of individuals without title deeds is not known – even the Department of Human Settlements doesn’t have ways to determine the number. “I don’t have a database or dashboard where I can know for sure that a person who is supposed to be in a house is the person who was given a house,” said Mfeketo in an interview with Moneyweb.

The department is struggling to locate people who had to receive title deeds, including those who received houses under the Reconstruction and Development Programme (known as RDP) – a housing policy introduced by the ANC in 1994 and now referred to as Breaking New Ground.

“I don’t understand how we can say we have a huge backlog in handing over title deeds when we don’t have a database. My understanding is that you are supposed to have a thorough process of identifying a beneficiary when you start a housing development in a particular area and not after delivering a housing development.”

Under Sisulu, the department had set a grandiose three-year target of fast-tracking the release of more than 800 000 title deeds by 2019.

Mfeketo might find it difficult to meet this target given that her department’s budget has been cut by R10 billion for the next three years as part of government’s initiative to free up R57 billion for Jacob Zuma’s costly legacy of fee-free higher education.

She added that the release of title deeds won’t be affected as the budget cut will be closed by additional financing from the private sector and development finance institutions. “We must go back to the basics by creating a database. This will ensure that the people we are giving those free houses to are people who are real beneficiaries. When they are in the database, then we can begin to prepare their title deeds.”

Earlier this month, Mfeketo handed over 2 000 title deeds to housing beneficiaries in Delft, Cape Town, some of whom include senior citizens and people living with disabilities.

The release of title deeds is widely considered as a way for poor people to build on wealth. A beneficiary of a government house with a full title deed is able to use the house as collateral to get a bank loan or add value to the property’s price by refurbishing it. 

More complexities

Industry players say the title deeds challenge is more complex than the department has envisaged.

Research by the Urban LandMark found that the stalled process of township establishment and proclamation, which delays the registration of new housing areas or neighbourhoods, is the biggest reason behind the title deed backlog. 

The problem also seems to be exacerbated by the revisions to the payment process for developers of government-subsidised houses. Up until 2003, the registration of title deeds in the name of beneficiaries was first required before the final two payments could be made to developers. Changes followed, allowing developers to be paid by the government before the registration of title deeds in the name of beneficiaries.  

The rationale for the change was that the transfer processes of title deeds were complex and took too long to implement, which delayed the developers’ access to payments from the government.