Awarding a service contract for maintenance work on air conditioners to a single BEE service provider was apparently more important than keeping one of the key institutions of a market-based economy ticking, namely the Deeds Office in the Free State.
For a full week (7 to 14 January 2019), no registration of title could be done and according to conveyancers, the system is still not functioning well. A conveyancer practising since the early 70s, it was the first time this has happened. This standstill has immense implications:
- Delays in sellers obtaining their income, thus losing investment opportunity and interest;
- Estate agents not receiving their expected income and thus resulting for several of them in additional financing costs;
- Conveyancers foregoing fees and income;
- Construction work for new or remedial work being delayed.
The Public Protector was alerted to this stand still as an instance where public interest was jeopardised. A Bloemfontein conveyancer, Sharon de Lange also reported the case to the Chief Registrar of Deeds as well as the Property Law Committee of the Law Societies of South Africa.
The problems commenced already in December 2018. The Department of Rural Development and Land Reform under whose auspices the Deeds Office resorts, apparently had a single service provider for the maintenance and servicing of the air conditioners in their offices in Bloemfontein. The air conditioners were out of order and the room with the server and computers so immensely hot, that there were fears of server failure.
The DRDLR was asked for comment which was not forthcoming at the time of posting this blog. There was also no reaction to the question whether the server was damaged because of a too high temperature in the room.
One of the Deeds Office female workers when receiving a request in December for a Deed’s search on a property way back to the years of Free State Republic, asked whether she could conduct that search early the next morning since it was unbearably hot in the room.
For the period 7 to 14 January no registration of title could take place, again not because the server was down, but because the non-functioning air conditioning system could have caused server failure due to high room temperature. On 15 January, some registrations took place, but several conveyancers confirmed that none of their submissions were registered since the beginning of the year.
But not only registrations were held up: from 9 to 15 January no new lodgements could be made because the system was not on, causing a further delay with financial implications. Now new submissions can be made, but these are still not loaded onto the system.
The Deeds View system (a national web-based service) has been down country-wide since December.
In The Mystery of Capital Hernando de Soto said the absence of legal title in Africa had stunted growth. The non-functioning of a Deeds Office certainly has all the potential to be a drag on growth.
BEE considerations outweigh economic cornerstone
The more than a week-long stoppage with its negative cascading effect is a clear example where the policy ideal of a BEE service provider weighed much more than the smooth functioning of the registration of title that forms a cornerstone of any modern economy. An excuse that the situation was an unfortunate unforeseen consequence, would be nothing more than an acknowledgement that BEE considerations weighed far heavier than a cornerstone operation of a modern economy.
This is not the way to promote growth, job creation and poverty alleviation. Also not the mode in which to convince potential investors that all’s well and we’re open for business…
PS The way BEE is impacting on fundamental human rights, was evident in my interaction with conveyancers:
- One white male conveyancer was willing to be quoted provided that there would be at least three other firms willing to be mentioned.
- Three white male conveyancers confirmed the problems, but were unwilling to be quoted, probably fearing some retaliatory go-slow or administrative sabotage.
- Sharon de Lange was forthcoming: if things don’t work we must act.
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