A simple solution to South Africa’s conveyancing backlog
The national backlog in obtaining clearance certificates necessary to finalise the sale of property currently stands at about 45 000 – a figure which has major implications for buyers, sellers, attorneys and estate agents alike.
Conveyancing attorneys are up in arms as a result of this backlog, which has come about as a result of antiquated systems and processes incapable of dealing with the volume of transactions currently being processed. The problem originates at City Council level with many of South Africa’s council offices persisting in the employment of manual administrative procedures, which can end up delaying the procurement of rates clearance certificates by up to 6 months in some instances.
Rates clearance certificates are only valid for between 60 and 120 days, which often means that by the time these documents are submitted to the Deeds Office, they have already expired and the entire process is forced to start again.
Naturally this type of delay has major repercussions for all parties involved in the transaction – sellers suffer interest losses, conveyancing attorneys allocate extensive time and money following up with council offices and buyers are unable to accurately plan their move into their newly purchased property. Over and above this, the financial implications for estate agents, who are customarily required to wait approximately three months for commission payment post-purchase, are immense.
South African City Councils would do well to follow the example of first-world countries such as Canada, who have reduced the entire duration of property transactions to just 24-48 hours as a result of well-managed automated systems. Systems such as ratesclearance.com, brought to the market by property solutions leader, Korbitec, assist municipalities to administer applications, process them and issue rates clearance certificates much faster. Ratesclearance.com also provides a mechanism to electronically transfer information about the rates clearance process between the municipality and the attorney, in an auditable process chain.This service is readily and freely available locally and has been implemented to great effect in many council areas in the Western Cape – most notably in the City of Cape Town.
Since implementing automated systems 6 years ago, the City of Cape Town has drastically reduced transaction turn around times, lessening the waiting period for rates clearance certificates to just 2 to 3 days – as opposed to a standard processing time of 60 to 90 days in the city of Johannesburg.
These automated systems are invaluable in the event of strikes and cater adequately for annual council closures, which take place at the end of the financial year allowing tariff increases to come into effect. Pressure on understaffed offices is also eased as a result of such procedures and allows for the seamless dispensation of certification.
The example set by the City of Cape Town will hopefully inspire council offices around the country to follow suit. The first signs of change are being felt in the City of Johannesburg, who have partially migrated their systems and are looking to transfer to a fully automated environment in the near future.
The solution to the backlog crisis is simple and inexpensive and can be solved. Not by court orders and interdicts, but by simply applying this technology. The effects of such a move have radically improved service delivery in many councils in the Cape and if correctly applied, should yield similar outcomes on a national scale.