Deeds offices open but estate agents must remain at home

Deeds offices open but estate agents must remain at home

As the country moves into Alert Level 4, the real estate sector finds itself still not able to operate outside their homes but at least able to conclude property sales with the deeds office open. The property sector’s new representative body National Property Practitioners Council (NPPC) says they will take matters further.

The past week has been one of extreme bewilderment for South Africa’s property industry. On Friday 24 April, after the President’s announcement of a phased re-opening of the economy from 1 May, it was initially thought that real estate services would be allowed to operate under the professional services section of the slightly more relaxed lockdown phase, Alert Level 4. However, on Saturday the government published their draft risk-adjusted strategy for economic activity which stated that residential real estate services would only to allowed to operate during Level 2 while commercial real estate would be allowed to operate in Level 3.

With the entire property sector already under extreme pressure, the sector’s newly formed representative body, the National Property Professionals Council (NPPC) on Monday 27 April in a written submission called on government to reclassify real estate services (both commercial and residential) as a Level 4 industry. Unfortunately, with the publication of the final regulations for Level 4 last night the real estate sector was still not listed under the professional services that will be allowed to operate but at least the deeds offices will reopen and able to conclude property transfers from Monday 4 May.

Commenting briefly on the latest developments, NPPC chairperson Vuyiswa Mutshekwane says many of their members are dissatisfied with the  Level 4 regulations. “It would appear that government didn’t even consider our submission. The NPPC will be taking this further,” she says. One of the council’s founding members, Jan le Roux, CE of Rebosa, confirmed their members are very disappointed and says Rebosa will continue to agitate to have real estate services able to operate during Level 4.*(Rebosa asked their members in a newsletter sent out Thursday night 30 April to lobby the National Command Council to include real estate in Part H – Financial and Business Services in Level 4 of the regulations issued in section 27 of the Disaster Management Act. Ed.)

Possible total economic loss of R15.7bn to GDP

How dire the situation is for South Africa’s property sector, is laid bare in the NPPC’s submission they made on Monday to the government departments of Cooperative Government and Traditional Affairs (COGTA) as well as Trade and Industry (DTI). According to the NPPC the residential property market is projected to contract by 40% in 2020 which would result in a total economic loss of R15,7bn to GDP.

Before lockdown, because of the faltering economy the property market was already showing a drop in property sales, with the exception of the lower-end of the market. The lockdown since mid-March brought the housing market to an almost complete standstill with tenants unable to relocate and honour lease agreements and all pending property transfers in limbo.

With the Deeds Office closed during the lockdown, estate agents were unable to earn an income through commission. This state of affairs not only restricted estate agents from concluding property transfers but also affected other industries directly linked to property sales such as financial lending institutions, bond brokers, valuators and conveyancing attorneys. According to the NPPC more than 50% of retail banking assets are generated by real estate and supply chain linkages include conveyancers, valuers, property and facilities managers, tradesmen etc. all of whom are at risk should the industry not be permitted to operate.

Deeds Office open during Level 4

One positive for the property industry is the reopening of the Deeds Office during Level 4. Dr Andrew Golding, chief executive of the Pam Golding Property group, welcomed the opening of the Deeds Office next week. “The Deeds Office opening means a short-term easing of cash flow for the largely commission-based real estate industry, potentially helping to save jobs, while providing much-needed revenue for government coffers. This is of course dependent on all deeds offices – which operate independently of one another – opening and returning to normal operating strength,” he says.

Golding continues: “While the current sales transactions and the backlog sitting in the Deeds Office will release cash flow and assist in the short term, it is hoped that this is a prelude to the real estate industry being granted permission to operate at full strength, but within the prescribed parameters set out by the government.

“Further good news is that from Monday, conveyancers are back at work, facilitating the processing of property transfers and the issuing of rates clearance certificates. For buyers it means that their property acquisitions can now reach final conclusion, although it remains to be seen when they will be able to move into their new homes, particularly as removal companies are not yet permitted to operate, and given the restrictions on the movement of individuals,” he ends.

Property buyers with property transfers already submitted to the Deeds Office will however have to bear in mind that municipal clearance certificates will have lapsed and will have to be done again.

The ‘new normal’ for real estate professionals during Level 4

As estate agents can only work remotely from home their focus needs to remain visible – key activities would include to continue with online marketing, keeping their social media platforms updated with relevant news, keeping in touch with clients and team members via virtual conferencing etc as they had done during the lockdown period.

During Level 4 it will still be challenging to conclude new sales while it remains illegal for prospective home buyers to visit the properties they want to buy. It is uncertain how long the country will have to remain in this state – it could be weeks or months.

Financial assistance for the real estate industry is limited. The business relief schemes put in place are mostly directed at businesses and employees. Many estate agents are not legally eligible to claim UIF as they are full commission earners.

According to the NPPC if real estate is not declared an essential service alongside the Deeds Office, they fear that up to 80% of the profession will disappear and along with it all the industries that rely on the industry.

Why real estate should be allowed to operate during Level 4

The NPPC in their submission pointed out that the real estate sector poses a relatively low risk of transmission of the coronavirus. Most property practitioners currently work remotely and are only required to do periodic site visits and inspections in which case stringent safety measures can and will be applied. The same applies for managing agents and commercial property managers.

It is further recommended by the NPPC that property professional’s offices remain closed to the public under Level 4 and if staff need to be at the office, the number of people be limited to one third of the workforce while stringent sanitizing and health protocols will be observed.

No open homes or show houses will be allowed during Level 4. Only private viewings strictly by appointment by only one agent and then only with the consent of the client and the property occupants. During the viewings the following would apply: social distancing, wearing of face masks, following all necessary sanitizing processes.

The NPPC also proposed as a further mitigating measure the introduction of contact tracing forms for all client meetings.

According to the NPPC submission, “the real estate services (including commercial real estate services) are formally classified as professional services by SARS and should therefore be given the same low risk rating as professional and financial services, i.e. they should be Level 4”.

Mutshekwane says “our first priority is to ensure the safety of practitioners and clients and we have proposed various methods that would ensure that. Fortunately, many practitioners already work remotely and can be classified as low-risk however extra care will have to be taken and where possible, activities that usually take place in-person will have to be conducted remotely such as valuations and appraisals etc”.

“We recognize the enormous task of ensuring the health and safety of society while meeting the needs of industry and fully support the Risk Adjusted Strategy for Economic Activity however, government should prioritize the re-opening of those industries that can be classified as low transmission risk and high economic contribution such as the real estate sector.”

Showing 29 comments
  • TANJA
    Reply

    Many agents don’t do sales and rely on their rentals for monthly payments and commission.
    Many are single parents that have children to feed and bills to pay.
    Us rental agents need to live and work and support our families.
    Please please let us work

  • Marnus Bergh
    Reply

    We have confirmed today that our deeds office staff in Limpopo are not even aware that they are opening next week! Further to that it seems that the conveyancers need special permits to work and the Law Society cannot provide any comment on this. Apparently they are still waiting for a minister to give directives. Clearly the country view and expectations communicated are not accurate and a true picture of the reality.

  • seamus connell
    Reply

    The Deeds Offices should have stayed opened at beginning of lockdown to finalise transactions that were there at the time
    The Deeds Offices will receive very few deals in the next month/ 6 weeks as property brokers cannot even show a property.
    I do not believe that government understands how pivotal the property industry is in this country. A property broker creates so much employment ie in banks, mortgage originators, attorneys, insurance, assurance, plumbers, electricians, locksmiths etc etc

  • Chrystal Naidoo
    Reply

    Dear NPPC, we look towards your guidance and unwavering pressure on government to allow us to operate during Level 4. As a principal of a real estate firm, I have tried to reduce company expenses to assist agents financially to at least put food on the table, but banks are slow to assist. Please help us get back to work, we need to stay relevant in the property sector and get the industry and related industries to generate much needed income.

    • Taylor Lourens
      Reply

      Will the deeds office be accepting new transactions?

  • Phumzile
    Reply

    Good news! As I have been waiting with my sales documents lying at the Deeds since lockdown. Can’t wait to be the home owner. Hope things will be fast.

  • Charmain Strauss
    Reply

    If buyers and sellers can’t move, how are we going to allow registration of properties to take place? Occupational interest would now become payable by the seller to the purchaser and this may not be what was budgeted for. Furthermore unless the purchaser is in occupation why would he want the transfer to take place as he would be liable for bond repayments, insurance, rates, etc. and he is not in occupation of the new home!
    Unless this can be negotiated and both parties are happy to allow transfer to take place, this is going to be a nightmare.

    • Mark
      Reply

      It does not help if the deeds office are open but local municipalities can not issue clearance figures.So we are going nowhere slowly!

  • Linda Marais
    Reply

    Everything has been said by Seamus Connell. I live in a famers Community Town, the beginning of 2020 was already slow in business.

    We really need to get back to work!!

  • Maria
    Reply

    I agree, why open deeds office only? In a few weeks they will have no work.

  • Gideon
    Reply

    So 7 people allowed in a taxi. So I can’t meet my client outside a property with our masks on and keep my distance while viewing. Doesn’t make sense. Maybe I should phone for a taxi…??

  • Myandhra
    Reply

    Hi Guys
    Real estate is a professional service and brings in a huge chunk of revenue into our country, we are actually putting our country at risk by not letting real estate brokers operate. There are stringent processes that can be imposed for agents to operate, remember no one wants to die so people will follow protocol. It is simple for real estate brokers to operate, to rent and sell a property with no risk. Maybe government should speak to people like us who have over 25 years real estate experience and unlimited knowledge.

    • Mendis
      Reply

      I am one of the frustrated purchasers. I paid every thing upfront to my conveyancer. Now the Deeds Office is slowly operating but still outstanding is the rates clearance certificate. When does the municipality operate to deal with this as also my lease is ending this May 31st?
      If I sign for occupation rent, it’s expense and not budgeted for. Please advise because deal is a cash one.

  • Peter CP Greyling
    Reply

    I operate an agency in a coastal town where political problems such as “illegal” land grabs (tolerated by the police and DA municipality) have contributed to sales dropping by over 60% in the past 2 years. One of my few sales was due for transfer during April. with the seller, tenant and buyer agreeing that the tenant would be able to move on 30 April. Now the seller says “I can’t pay the levies for May”, the tenant says “If I can’t move I am not going to pay any occupational rent” and the buyer says “Where the h….. do I go. I dont’ have a place to stay “. My debit orders are bouncing today, and all I can say is “What did you expect?”.

    • Lea
      Reply

      People need to eat and survive and estate agents are commission earners. Get with it and let them trade. They will definitely be safer then seven people to a taxi

  • Lemanda Engelbrecht
    Reply

    Good Afternoon,

    I love my career, but it is very difficult if buyers call and they can’t view.
    Answer is keep a 2m distance with the sellers approval to view their house – I would love to show my buyers.

    Please can’t we work!

    Thank you

  • Lemanda Engelbrecht
    Reply

    Just corrected my Email address.
    lemanda@centridgefinesse.co.za

  • Kathy Brown
    Reply

    What is worse, placing our economy at risk financially or allowing people in the high risk areas to be affected by close contact which is unavoidable. The heart of the matter does not make sense!! I understand that all environments need to be prepared to combat this virus, hence the 6 weeks we have had should have been ample time for this. We are all human, and the more income, the more the whole of SA thrives. All industry plus real estate in this environment should be allowed to operate post-haste as long as social distancing happens. The financial support the South Africans have given out to help towards the elimination of this corona virus is phenomenal and the less we work, the less we support!!!

  • Abegail Morrison
    Reply

    I am a single parent with 4 kids and 2 in varsity with no assistance at all from any institution. So really, I have fees to pay, food to put on the table, data for assignments as tertiary education is been conducted online. I solely depend on selling property and nothing else. There has never been such a traumatic moment in my life … government needs to rethink.

  • Inette Steyn
    Reply

    A big thank you to the role players fighting for us. I notice that the silence from the EAAB is deafening… Interesting that estate agents are saddled with all the responsibilities of professionals (like CPD) but enjoy none of the benefits.

  • Trudy McCabe
    Reply

    Its a vicious circle. The government need to add property practioners to work at level 4. No sales no money, no UIF. We operate remotely, so let us work. Thank you for pushing the government on our behalf.

  • Nina smit
    Reply

    They want to open schools but estate agents cant work
    Taxies and the trains can have passengers

    • Ronnie
      Reply

      It does not make sense that the deeds office is operating , while the municipal clearance department is closed.

      • Helene Meissenheimer
        Reply

        Hi Ronnie, municipalities should be open to issue municipal clearance certificates now.

  • Elana
    Reply

    Professional practitioner in real estate is what I am according to my FFC, but I am not allowed to work during level 4??!

  • Woried
    Reply

    The Deeds Office in Nelspruit, Mpumalanga also not open yet. Not even the Registrar is able to give an indication as to when it will be open.

  • Mark
    Reply

    It does not help if the deeds office are open but local municipalities can not issue clearance figures.So we are going nowhere slowly!

  • Karel Van Der Merwe
    Reply

    When will us, house inspectors, be able to resume our jobs. We rely on the property market. The sooner this are reinstated and opened to sales again, we are hurting

  • Beverly
    Reply

    Today 18 August 2020 deed office is closed, I needed copy of my title deed and I have to pay and I can not pay anywhere for the copy. Please open deeds office I need services and we are in level 2 deeds office johanessburg not open

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