By Nomfundo Manyathi-Jele

The Association Law in Force recently held a conference on benchmarking Angolan and South African immovable property legislation. The conference discussed the legal issues faced with regard to foreign investment in immovable property.

The speakers included Co-chairperson of the Law Society of South Africa (LSSA) Kathleen Matolo-Dlepu; the Chief Executive Officer of the LSSA, Nic Swart; Prof Rui Cruz, a law professor at the Agostinho Neto University in Angola; and Lourdes Fernandes, the President and founder of the Legal Counsel Firm group.

Mr Swart spoke about the South African Constitution. He said that the Constitution was a living document and that it had to be lived and practised for it to become a reality. He then touched on the Legal Practice Bill, saying that one of the challenges that South African lawyers were currently faced with was welcoming the Bill once enacted and the two-year transitional state.

Ms Matolo-Dlepu spoke on the applicable legislation in property acquisition in South Africa. Speaking on land legislation, she said that South African property law ensures –

• harmonisation of individual interests in property;
• the guarantee and protection of individual (and sometimes group) rights with respect to property; and
• the control of proprietary relationships between persons (both natural and juristic), as well as their rights and obligations.

She said that the most important social function of property law in South Africa was to manage the competing interests of those who acquire property rights and interests.

Ms Matolo-Dlepu outlined the applicable land registration system. She said that the land registration system was governed by the Deeds Registries Act 47 of 1937. She added that this system complied with most of the requirements of a system of registration of title, such as the existence of a scientifically prepared diagram of each parcel of land in order to eradicate any uncertainty as to the identity thereof and the fact that all deeds are thoroughly examined in terms of s 3(1)(b) of the Act.

Ms Matolo-Dlepu said that there were no restrictions in respect of property ownership by non-residents, save for a prohibition on illegal aliens owning property within South Africa.

She added that there are, however, procedures and requirements that must be complied with in certain circumstances, such as the local registration of entities registered outside South Africa that purchase property in South Africa and the appointment of a South African officer for a local company whose shares are owned by a non-resident.

‘In the event of a non-resident residing for longer periods, a residence permit will have to be applied for in terms of the Aliens Control Act 96 of 1991,’ she said.

David Green, who is the managing director and founding shareholder of Pro Africa Property Services, said that foreign investment in immovable property in South Africa was on a small scale. He discussed the country’s real estate perspective and said that the reason why foreign investment was on a small scale was because the South African property market was so strong that foreigners did not have an opportunity to enter it. He also said that there were a few hurdles that foreigners had difficulty overcoming, such as the fluctuation of the Rand. Mr Green said that Africa was under-resourced with real estate expertise.

Nomfundo Manyathi-Jele, nomfundo@derebus.org.za

This article was first published in De Rebus in 2014 (March) DR 11.