Skulduggery in the Deeds Office has seen more than 70 municipal and corporate properties fraudulently transferred to shady private companies since December last year.
This raises the strong possibility of SA property owners now having to take out title deed insurance, as is the case in the US and other countries.
“Top officials who held positions of great trust at the Deeds Office have been implicated in the irregular transfers and fraudulent alteration of the title deeds registry, and the Hawks have been drawn into the investigation so there is a strong suspicion that there is a criminal syndicate involved,” says Berry Everitt, CEO of the Chas Everitt International property group.
“At the very least, this scandal has proved that the Deeds Office security procedures can be compromised - and that SA property owners may not in future be able to rely entirely on these for their security of tenure.”
And that, he says, is a “very scary prospect”, which immediately raises the question about the need for title insurance to be introduced in South Africa.
“This type of cover is a requirement in the US, for example, for almost anyone with a mortgage and the way it works is for the property owner or buyer to pay a once-off premium to a ‘title company’ that guarantees undisputed ownership of the property at the time of purchase, and will alert owners to any attempt to illegally transfer it to anyone else.
“Owners with this type of insurance can usually also expect compensation if there turns out to be some ‘defect’ in the title that could inhibit the use or resale of the property, such as a servitude over the property, or some previously undisclosed lien in favour of a third party like the municipality.
“And in most cases title insurance also gives the bank that provided the home loan to purchase the property peace of mind regarding the safety of the asset and title that secures the loan.”
Title insurance, Everitt explains, is thus different from normal insurance in that it protects you against events that may have occurred before you took out the policy, not events that may occur in the future. “And given that, its cost is usually minimal when weighed against the protection it can provide.”
Readers' Comments
Have a comment about this article? Email us now.
Thank you for your informative articles.
In my opinion I believe that the consumer is already overextended and implementing a compulsory insurance like this, is just another form of “indirect taxation” to mask the inefficiencies of government.
The cost and risk of mismanagement and corruption should surely be borne by the custodians of the deeds office & other professionals like the attorney’s that get paid well to ensure the integrity of the deeds office.
The responsibility of keeping the integrity of the deeds office intact can surely not just be transferred to the consumer....
All these costs add up and in my opinion will just add strain to an already difficult market.
Yes I would second emotion that statement. This is very serious and fraudulent. The deeds office and the bond holder should be held responsible should anything like this happen. Unfortunately we live in a time period where fingers are always pointed elsewhere to apportion responsibility and blame, instead of where it should be. The property owner is the backbone of the countries economic and they should be protected this includes the farmers who produce the food for the country from their property. Mess with these and the country will fall. - Val
