14 May 2020

Should the Deeds Office be Digitised Sooner?

by Sifiso Msomi, Partner, Durban, Sinenhlanhla Nene, Associate, Pietermaritzburg,
Practice Area(s): Property & Conveyancing |

The COVID-19 national lockdown has had a severely negative impact on the property industry particularly with the closure of the Deeds Office and municipalities, which have brought the industry to a halt. The lockdown has emphasised a dire need for a fully operational electronic deeds registry system. On 19 September 2019, the Electronic Deeds Registration Systems Act 19 of 2019 (“the Act”) was signed into law. The Act was enacted to facilitate the development of an Electronic Deeds Registration System (“e-DRS”) which would enable the electronic processing, preparation and lodgment of deeds and documents. Unfortunately to date, only one provision of the Act is in operation. The national lockdown has highlighted the importance of the digitisation of the registration of deeds and documents process, and the necessity of developing and implementing the e-DRS system as a matter urgency.

Section 2 of the Act is in effect and is currently the only section in the Act that is operational. The section imposes an obligation on the Chief Registrar of Deeds, subject to the Electronic Communications and Transactions Act, to establish a system for the electronic registration of deeds. The Chief Registrar will be responsible for -

  • the functional requirements for the electronic deeds registration system;
  • technical specifications;
  • security measures;
  • maintenance of the system;
  • the processing of deeds and documents using the system;
  • securing the retention and subsequent production of deeds and other documents for the electronic registration system.

The section does not prescribe a time period for when the system should be launched however, considering the pressing need to go digital, this responsibility should be regarded as being a priority.

The system would enable conveyancers to lodge, prepare, register, and execute deeds and documents as envisaged in section 2(1) of the Act. Conveyancers would therefore be able to attend to transfers, mortgage bond registrations, cancellations, etcetera, whilst working remotely. It should be noted that the implementation of the system would also require the digitisation of other departments, such as the Rates Departments of various municipalities, for the effective functioning of the registration of deeds. The system would ensure a degree of continuance in the property industry particularly during the lockdown period.

The property sector in the United States was declared as an essential service during the lockdown. Estate agents have been able to continue with their business through online virtual viewings, virtual valuations and virtual show houses. The fourth industrial revolution has made its way to South Africa and has represented a new era of innovation in technology. Global technological development has shown a need for us to catch up with leading nations to avoid being left behind. This development is becoming increasingly important for the property industry. The implementation of the Act should be expediated in order for conveyancers to be able to adapt to a more effective way of working which will protect the interests of their clients.

Canada is deemed as a pioneer in electronic registration which allows for the lodgment and registration of deeds and documents. Their system allows attorneys, banks, conveyancers and members of the public to register deeds electronically, provided that they have an account with the service provider. The user will identify the type of document that they want to create and register, for example a transfer, mortgage bond registration or bond cancellation. The lodging process is done by uploading the relevant documents onto the system. When the documents are being prepared, they are signed electronically by the account holder. All office fees and stamp duty are paid electronically. Countries that have implemented electronic registration systems have been able to reduce the processing times and records have become more accessible. Systems used by foreign jurisdictions such as Canada can be used as a model for the development and implementation of our e-DRS system. The effectiveness of their system also idealistically shows how the property industry would be able to function during these unprecedented times.

The implementation of the e-DRS system would prospectively increase the volumes of deeds registered, improve turn-around times between the lodging and registration process, clients receiving their registered documents earlier, enhancing accuracy in the examination and registration of deeds, being able to access deeds registration services nationally and information being more readily available.

Although the e-DRS will have a positive effect on the property industry, conveyancing departments would have to apply an extra degree of caution as they have been targets to cyber-crime due to the large sums of money involved in property transactions. Conveyancers are warned that the digitisation of the Deeds Office will increase the attacks on their departments which will necessitate more due diligence and care from conveyancers. Conveyancers will however be expected to navigate around the negative aspects as the digitisation of the Deeds Office is ultimately inevitable. Going forward, there will also be a need for the implementation of a safe digital system that allows conveyancers and clients to sign documents for lodgment.

The lockdown has shown a pressing need for the Act to be implemented expeditiously. In light of the technological changes in the world, the digitisation of the Deeds Office is ultimately inevitable as the current traditional approach is becoming increasingly less viable.