Dealing with non-qualifiers

Where the self-classified owner qualifies for a subsidy, a process is required. During this process, the housing authority will sell the property to the self-classified owner occupant for a nominal amount of R15 000. This process is described in more detail in the regularisation overview in this toolkit.

The occupant of the house claims to be have bought the house from the original beneficiary (i.e. there is evidence of an informal sale).

Where the beneficiary is alive and supports the fact of sale, there are three possible pathways to transfer:

1. Back to Back Transfer

2. Self-classified owner to apply for a subsidy in his / her own right in own right and action

Process Overview

In this case, the housing authority transfers the property to the original beneficiary, who then immediately transfers the property to the new owner. The original beneficiary would sign two sales agreements, the first as a buyer with the housing authority as the seller, and the second as the seller with the occupant as the buyer.

In order to enable the second transfer (from the beneficiary to the current occupant), the beneficiary needs to obtain a waiver or 'no objection' letter from the provincial human settlements department in line with Section 10A of the Housing Act. This letter states that the provincial department has no objection to the sale and must accompany the transfer documents.

In the case of delayed transfer, these no-objection letters should be requested by the housing authority and provided by the provincial authority as a matter of course; the occupant lives in the property and there is no dispute about ownership. As per the (Principle 1: Avoid evictions and Principle 4: The household's perspective matters), the housing authority and the provincial authority should enable the formalisation of existing informal ownership arrangements.

In practice the title deed for the primary registration is required before the subsequent transaction can be registered. When the primary registration is complete, the transferring attorneys should retain the title deed and not hand it back to the original beneficiary, but should rather deliver it to the conveyancer who is facilitating the second transfer.

The key steps in the back to back process are:

1. Occupant indicates that they purchased the property from the original beneficiary

2. Housing authority traces and contacts the beneficiary

3. Beneficiary confirms the sale of property

It may not be feasible or desirable to proceed with a back to back transfer, for example where the original seller did not qualify for a subsidy or the subsidy was declined and the first leg of a back-to-back is not possible.

In this case, it is possible for the housing authority to transfer directly to the new owner. There are two scenarios:

• The self-classified owner can apply and qualify for a housing subsidy in her or her own right

• The self-classified owner does not qualify for a subsidy, and

Where the original beneficiary confirms that the property was sold and ownership is not contested, the housing authority can transfer the property to the purchaser. In some cases, this owner may qualify as a beneficiary in his / her own right. In such cases, the new owner must apply for a subsidy, and be added to the project as a beneficiary. In practice this may require the housing authority or the province to add an additional phase to the project to accommodate additional beneficiaries.

The subsidy records pertaining to the original beneficiary must be retained as that individual has, in fact, benefitted from a subsidy.

Once the subsidy has been approved for the new owner, the property can be transferred in line with the core registration process

Where the subsidy is not approved, the regularisation process must be followed.

for more detail.