By Kevin O’Reilly
The Law Society of South Africa’s (LSSA) Property Law Committee (the committee) met on 25 July 2024 to consider various issues pertaining to its area of focus. Included in the discussion were the following issues.
The committee discussed the Property Practitioners Act 22 of 2019 and Regulations noting a webinar was held on 14 June 2024 by the Property Practitioners Regulatory Authority (PPRA) and the Legal Practice Council (LPC), which addressed the PPRA’s interpretation of
s 56(5) of the Property Practitioners Act. This section deals with commission held by conveyancers that cannot be paid to unregistered property practitioners lacking a Fidelity Fund Certificate. The committee was of the view that the commission should be returned to the seller, while the PPRA contends it should be held in their trust account for two years, in which time any of the parties could claim it back from them.
The committee decided that a draft brief on the matter would be reviewed and submitted, along with the PPRA’s views, to counsel for an opinion.
The Legal Services Ombudsman has launched an investigation into the low pass rates of the admission examinations and has submitted questions to the LSSA. In its response, the LSSA has addressed the issue of the low pass rate in the conveyancing examination. It was noted that in the past, the LSSA used to facilitate the examinations, while the LPC handled the syllabus. This year, the LPC has taken over the entire responsibility, so the LSSA is no longer involved with the examinations.
The committee acknowledges the issue, noting past efforts such as a task team and mentorship programme to address the pass rate. It was decided to discuss re-establishing the task team and mentorship programme at the next meeting to improve the conveyancing examination pass rate. The committee recognised that implementing effective mentorship poses challenges, including the time commitment and the need for proper experience to add real value to the candidates. Effective mentoring also requires access to the syllabus and genuine assistance to the candidates.
The LSSA addressed a letter to the Chief Registrar of Deeds (CRD) requesting that the Chief Registrar consult with the LSSA before publishing circulars. The CRD responded, stating that it is not standard practice to consult the profession before issuing circulars. Circulars are sent to the Registrars of Deeds for input and approval at the Branch: Deeds Training Entity Management Meeting. The CRD noted the LSSA’s request.
The committee believes it is crucial for the LSSA to be consulted before issuing circulars or directives to ensure they do not adversely affect conveyancers or the public.
The committee resolved to draft a letter, emphasising the importance of cooperation and practical input from conveyancers, to the Director General and the Minister.
The committee discussed the importance of collaborating with property committees from other associations. They proposed inviting representatives from these associations to attend their meetings to provide input and to raise awareness about the committee’s activities and foster interest and participation from members. The committee intends to invite representatives from two associations to their next meeting as guests.
The committee discussed issues with the briefing patterns of banks, noting that when banks began assigning both bond registrations and transfers to certain firms, it significantly reduced the available work for smaller firms. It was noted that feedback from the banks indicated that there is currently a shortage of work due to high interest rates, resulting in fewer people taking out bonds. The committee noted the banks should be requested to reconsider their briefing patterns to ensure a more equitable distribution of work among attorneys, particularly for those from previously disadvantaged sectors, without the process being influenced by estate agents and mortgage originators. The committee decided this issue will remain a standing item on the agenda.
Members of the committee form part of a task group facilitated by the Office of the Chief Registrar of Deeds, to deal with the Electronic Deeds Registration System (eDRS). On 9 June 2024, the task group met and the Chief Registrar of Deeds presented the proposed system, focusing on a simple transfer. This process involves filling in basic data such as the names of the parties and the purchase price to generate a certificate. At the presentation many issues were raised. A follow-up meeting was held from 10 to 12 July, which was attended by various conveyancers from different associations. This meeting covered not only a simple transfer, but also complex transfers, including cancellations and bonds. The aim is to simplify bond documents, although there are concerns about oversimplification. Another meeting was scheduled for 6 to 7 August to discuss mortgage bonds. The committee believes that before the system is implemented, it should be reviewed by conveyancers and various deeds offices for their input and consideration. The initial goal was to have it ready by 1 April 2025. However, due to various issues, this timeline may be impractical. A suggested approach is to run the electronic system concurrently with the current paper system to ensure it works correctly.
Difficulties experienced with the rates department of the City of eThekwini were discussed, particularly the issuing of rate certificates. It was noted that recently there have been improvements but there are still difficulties in regard to meter reading.
The validity period of 60 days on clearance certificates was also raised and a proposal was made to draft a letter to the Department to consider it be changed to 90 days to ease the burden on conveyancers and the public. Another issue discussed was the amendment to the Upgrading of Land Tenure Rights Act 112 of 1991 as a result of Rahube v Rahube and Others 2019 (2) SA 54 (CC). This will be put on the agenda for the next meeting for consideration.
The committee discussed the high fees charged for levy certificates, which have increased from R 350 to as much as R 2 250 in some instances. The committee noted the issue needs to be addressed, possibly through the Community Schemes Ombud Service (CSOS) or other regulatory bodies. They noted that managing agents often request information that might not be relevant, adding to the problem. The committee felt the high fees are unfair to consumers and should be regulated. A proposal was made to draft a complaint to CSOS and involve other relevant organisations to investigate and address the issue.
Kevin O’Reilly MA (NMU) is a sub-editor at De Rebus.
This article was first published in De Rebus in 2024 (Sept) DR 10.
