Boom in City illegal house sales

While the boom in property sales and prices in Cape Town suburbs continues unabated, the market in poorer areas is experiencing a boom of a different kind - people "buying" and "selling" houses illegally and without transfers being registered at the Deeds Office.

Many of the properties changing hands are government-subsidised houses which may not be sold by law and, in most cases, the "buyers" have no rights to them.

In fact the buyers may not only end up losing the houses they think they have bought, but also the money they paid for them. They could even end up behind bars like those who illegally "sold" them the houses.

In the case of non-subsidised houses, buyers and sellers are arranging "sales" between themselves and large sums of money are changing hands without buyers being given transfer of the properties, often through ignorance of the legal procedure to be followed in transactions involving immovable property.

In terms of this procedure a buyer does not officially own a property until transfer of ownership is registered in the Deeds Office. It is a complicated process, usually undertaken by a conveyancing attorney, in which various documents must be drawn up and signed by buyer and seller, transfer duty paid and rates clearance obtained from the local authority. Only once all documentation is declared to be in order by the Deeds Office is transfer registered and ownership passes from the seller to the buyer.

The Housing Department said the sale of Reconstruction and Development Programme (RDP) houses built at taxpayers' expense was illegal and both sellers and buyers could be prosecuted. "If you are sitting in a car waiting for people who are robbing a bank, you are as guilty as they are," said Housing Department spokesman Thabang Chiloane.

In some instances the "sensitive" issue of selling RDP houses, as one buyer described it, turned out to be a form of theft as the original owners returned a few years later and evicted the "buyers" - legally, because the buyers had no legal right to the property.

Cape Town City Council housing department spokesman Andries Cornelisson said they referred such people to lawyers as it was a private matter.

The government spends about R29 000 on the construction of a low-cost house but these houses are being sold for between R5 000 and R15 000.

Buyers of RDP houses include people who have had enough of living in informal settlements, foreigners, those who don't qualify for housing or people who want to start businesses.

Some houses are sold because their owners want the money and would prefer to move back to shacks.

Government regulations state that "a beneficiary of an RDP house shall not for a period of eight years from the date of registration alienate the property without the prior written consent of the municipality".

From April the period will be shortened to five years in accordance with the Comprehensive Housing Settlement Plan introduced last year.

This means authorities will be unable to provide title deeds for houses sold earlier than the prescribed period, even if a buyer and seller can agree on a sale and a price.

A resident of Samora Machel in Philippi, who declined to be named, said she had been battling to get the title deed since she bought her "matchbox" house for R12 000 three years ago.

She was the third owner of the house and even the second owner, who sold her the house, did not have the deed. She had been to a lawyer "countless times" but the documents are not forthcoming from the council. "It is worrying to not get a title deed after such a long time. I'm scared sometimes that I will lose this house," she said.

A UCT employee, who bought a house in Delft last year, said he went to the police station with the original owner so police could witness the transaction, but the police refused to get involved.

Chiloane said the Housing Department had established an Anti-Corruption Unit last year and a forensic audit was being done to deal with the matter. The unit can be reached on 0800 204 401 and more information about housing can be obtained by phoning 0800 146 873

  • This article was originally published on page 1 of Sunday Argus on January 30, 2005
Article by: Myolisi Gophe - www.iol.co.za