Guiding principles

In many cases, the current occupants and self-classified owners of the properties will not be the original beneficiary/ies. Housing authorities will need to exercise discretion in how they deal with complex cases. While it is impossible to list out all possible scenarios, there are a number of principles that can guide how these complex cases are dealt with.

Principle 1: Avoid evictions

A primary objective of the titling programme is to strengthen formal property markets and to enable subsidy houses to become administratively visible and bankable.

While Section 10A of the Housing Act requires beneficiaries to obtain permission from the Provincial Department of Human Settlements before selling their properties, in practice this is seldom adhered to, particularly where transfer has been delayed. While this implies that these transactions are illegal and should be overturned with purchasers evicted by the province, this is simply not a feasible approach. In the first instance, the current legislation governing evictions is complex for the evicting party to navigate. It is also by no means clear that these evictions would be upheld by the courts given that the administrative failure of the State has, in part, created the conditions for informal property market transactions to be widely adopted.

Beyond this, evictions would destablise communities and undermine the objectives of the titling programme; occupants who have purchased informally are unlikely to participate in a process that will result in their eviction. Evictions would also undermine the functioning of formal property markets.

Therefore, where there has been an informal sale, the housing authority should contact beneficiaries to confirm that the sale, in fact, took place. Where there is no dispute, the housing authority should facilitate the transfer of the property to the buyer.

Principle 2: Don't prejudice beneficiaries because transfer has been delayed

Beneficiaries should not be prejudiced as a result in the delay in transfer, which is not of their making. This principle has clear ramifications. For instance, in the case of a marriage in community of property subsequent to the subsidy award, the property should be transferred to the beneficiary and the new spouse, even if the new spouse does not qualify for a subsidy. Likewise, where a beneficiary dies, transfer should proceed to the surviving spouse irrespective of his or her subsidy status. Where there is a divorce, the property should be transferred in line with the divorce order.

Principle 3: A subsidy is not a real right (i.e. not a legally registerable land right)

Unlike property ownership which is a real right that can be registered and transferred, a subsidy is not. This means that housing authorities have some flexibility when the original beneficiary is not in occupation, and can make a determination on who to transfer to. It is important that cases are adjudicated in a way that is procedurally fair and that housing authorities can justify decisions they have taken in the event these are appealed.

Principle 4: The household's perspective matters

While a subsidy is not a real right, from the perspective of those who regard themselves as owning subsidy properties, this legal fact is not terribly material. They regard themselves as owners, have often invested in the property as if they were owners in law and are recognised as owners by others in the community. For the titling programme to succeed, housing authorities should respect the ownership arrangements that have emerged in the absence of title, and seek to formalise them where these are uncontested.

Principle 5: Make reasonable attempts to locate the original beneficiary if he or she is not in occupation

Where beneficiaries are still alive but are not in occupation, the housing authority must attempt to locate the beneficiary before transferring the property to current occupants. This might include trying to trace the beneficiary through credit bureaus, banks or SASSA or advertising in the media (including social media). It is important to retain evidence of these attempts so that the authority can demonstrate its efforts if these are called into question by beneficiaries who come forward after the property has been transferred to other parties.

Principle 6: Make it as easy as possible to regularise ownership

There are a number of practical suggestions that flow from this:

• Enable more households to qualify for subsidies: The maximum income threshold for subsidy qualification should be increased from R3 500 to R15 000 to account for the passage of time between allocation of the property and transfer.

• Where the occupant-owner cannot qualify for a subsidy, and must purchase the property from the housing authority, the sales price should be set as low as possible so that the price is affordable and does not discourage the formalisation of ownership. In addition, given that there is some variance in the quality of top structures on the properties, the price should be for the land only. While each housing authority has some discretion, this toolkit recommends a fixed price of R15 000.

• Where households do not qualify because they earn more than R15 000, enable households to apply for FLISP subsidies in order to purchase the property from the housing authority and pay for the transfer. The maximum income to qualify for the FLISP is R22 000.

• Where a waiver or no-objection letter is required to facilitate the formalisation of an informal sale that has already taken place, these should be granted as a matter of course by the provincial human settlements department on request from the project manager of a titling project and without the need for a formal waiver application.