Creating real value from unregistered real estate

As we congratulate the Mail & Guardian 200 Young South Africans 2014, a thought crossed my mind as to how we can help our country create job opportunities for our youth. Currently black people are sitting on billions of rands’ worth of unregistered real estate in the former “homelands”.

As a result of apartheid policies, many of SA’s citizens have become used to living outside of the formal land and property registration system and it does not occur to them to challenge the status quo. But this fact, together with the legacy of a skewed distribution of land ownership which until 1991 limited black South Africans (75% of the population) to only 13% of the land, has direct implications for the country’s cadastral records.

A second limitation was placed on black occupation of land in the 1950s - that is that only Xhosa-speaking blacks could live in the Transkei and own or occupy land there, that Zulu-speakers had to leave and live in KwaZulu, that Tswana-speakers could only acquire land in Bophuthatswana and so on.

Then of course a number of these homelands - Transkei, Ciskei, Venda and Bophuthatswana - accepted so-called independence and started changing their cadastral systems, which has been a major challenge in the cadastral sense since these areas became part of the jurisdiction of a united SA again in April 1994.

One homeland even tried to introduce general boundaries, whereas SA has an accurately-beaconed boundary system.

Now my argument is that the currency of the property records is extremely poor in many developing areas of the country.

The situation might not improve as much as it is expected using current procedures and that this makes land, housing management and land reform more difficult where it is needed the most.

However, formalising the registration process of the currently unregistered properties, land in the former homelands and starting the rezoning process, that will not only give many black South Africans title deeds and security of tenure, but also it will create jobs and give the property owners access to funding through home loans.

In fact, I think it is only by setting up local-level, multipurpose land registries that facilitate the flow of land, housing information and better management, this is what will be able to solve SA’s land reform and property ownership problems.

I also believe that government should build and facilitate land and housing administrative capacity linked to this local registries, rather than trying to solve problems from outside communities by imposing top-down solutions such as land reform only in the farming sector.

Indeed, having land and property management in place would likely be vitally important in order for the registry and the rights it registered, to be perceived as having integrity, especially by the finance houses.

In short, proclamation or rezoning of the former homelands could create thousands of long-term jobs and at the same time give tens of thousands of people a sense of ownership on registered title deeds rather than the current Permission to Occupy (PTO) documents.

We would have to hire more land surveyors, quantity surveyors, civil and electrical engineers, town planners, architects, property valuers, civil and electrical contractors and they in turn would have to hire more general labour to install the required services.

We would have to increase our municipality staffing (job creation) as we will be collecting more rates and taxes.

We would need more property lawyers to register the properties at the Deeds Office and more Deeds Office staff (job creation) to cope with the increased workload.

A new market would no doubt soon be established as people began to buy and sell the newly registered properties and there would be a need for more full- time estate agents, and more bank staff (job creation) to deal with an influx of home loan applications.

But the most important aspect of this vision is the much-improved service delivery that could be achieved if the new infrastructure was put in place through the rezoning process.

Another legacy of the SA’s past is that unlike in other countries, the wealthy generally live close to the city centre and the poor right on the outskirts, where the costs of providing and buying services, especially transport, are much higher.

The current government has of course developed a range of new land policies and legislation to try and deal with the social injustices of the past and reverse the effects of apartheid.

These policies include the redistribution of land; the restitution of land to those who suffered forced removals; large- scale formal housing development for low income groups; the restructuring of cities and towns; the provision of land rights to labour tenants; giving the holders of customary rights more security; upgrading and giving title to informal settlements; unifying the land-delivery legislation and procedures; the rationalization of administrative structures; the facilitation of group registration approaches; changing inferior titles to freehold; the promotion of gender equality in property ownership and the provision of a comprehensive, user friendly, affordable, accessible and transparent land information system, especially to the historically disadvantaged.

But I can’t help thinking that we can do more with these policies to overcome our past and even make it benefit us, during this current challenging times as young South Africans.

About Rali Mampeule

Rali Mampeule is considered one of SA’s top black property entrepreneurs. His success in real estate investing and the generation of passive income from property has resulted in him becoming a sought-after speaker at property conferences around the country. He is also regularly featured in the media where he champions black business ownership and property investment.

Rali started his career in 2000 as a self-employed roadside hawker, selling boerewors rolls. It was there that he caught the attention of real estate mogul Charles Everitt who offered him a position as an assistant real estate agent at the Chas Everitt International property group branch in Bryanston, Johannesburg.

In 2004 he took the pioneer route and acquired his own Chas Everitt International franchise in Midrand. Hungry for change in the SA real estate landscape, he also worked with the South African Property Charter Transformation Chamber, contributing ideas and information while also lobbying industry leaders.

In 2005 Rali was awarded the Nedbank/ Property Association Young Lion award and in 2006 / 2007, he won the Nedbank/ Property Association Property Professional of the Year award. The following year, the Africa Heritage Society named him as its Emerging Entrepreneur of the Year.

In 2005, Rali also created the Rali Mampeule Learnership Programme in order to fast-track the entry of black people into the real estate industry and in 2008 he set up a new residential sales company which grew into the first black-owned national franchise group - Rali Properties.

He has also served professionally on the disciplinary committee of the Estate Agency Affairs Board, SA’s real estate industry regulator and studied for a Bachelor of Commerce degree through the University of South Africa.

In 2009, Rali began diversifying into comprehensive real estate services ranging from property development and leasing to asset and facilities management. And with a bouquet of residential property, retail and commercial building services in hand, he has spent the last five years building his balance sheet. He is currently the CEO of Phadima Group Holdings.

This article was paid for and signed off by the Phadima Group