How to legally purchase or sell an RDP home.

The Reconstruction and Development Programme (RDP) was established in 1994 with the aim of promoting South Africa’s social and economic growth. RDP homes are typically intended for underprivileged individuals, providing affordable housing options. The process of legally purchasing and selling an RDP home involves adherence to specific regulations and guidelines imposed by the respective government authorities. We will outline the necessary steps and considerations involved when legally buying and selling RDP homes.

To initiate the purchase or sale of an RDP home, it is essential to engage with the relevant government department responsible for housing development, such as your local municipality and the Housing Department. This housing department will often oversee the administration, allocation, and management of RDP homes.  It is crucial to gather comprehensive information on the eligibility criteria, application procedures, and potential subsidies or incentives that may be available for both buyers and sellers.

The legal requirements and procedures for selling or transferring an RDP (Reconstruction and Development Programme) include, but are not limited to, these steps:

1. Check ownership status: The seller needs to confirm that they are the legal owner of the RDP home and have the right to sell or transfer it (1).  This can be checked with the relevant Housing Department or the Deeds Office.  

2. Obtain consent:  This involves receiving written consent from the municipality that the seller has lived in the RDP home for at least eight years.  This is to ensure compliance with any regulations or restrictions associated with the property (2).  After the eight-year period, all RDP beneficiaries should receive their title deed.     

3. Valuation and pricing:  It is important to determine the fair market value of the RDP home, either through professional or municipality evaluation, or by comparing prices of similar properties in the area (3).  

4. Sales agreement: Both the seller and the buyer must enter into a legally binding sales agreement.  This outlines the terms and conditions of the sale or transfer. This agreement should also specify the purchase price, payment terms, and any additional conditions pertaining to the property.

5. Transfer duty and taxes: The buyer may be responsible for, or exempt from, paying transfer duty tax associated with the purchase. The seller will be responsible for settling the municipality rates and taxes.  This amount may vary, depending on the purchase price and jurisdiction.

6. Transfer process: The transfer process usually involves the conveyancing attorney who oversees the legal transfer of ownership from the seller to the buyer. This includes conducting property searches, drafting necessary documents, and registering the transfer at the relevant government authority or Deeds Office.  

7. Compliance with regulations: Throughout the process, both the seller and the buyer must comply with any additional regulations or requirements specific to RDP homes, such as complying with any resale or occupancy restrictions (4).

Overall, individuals keen on legally purchasing or selling an RDP home must ensure they follow the prescribed procedures set by the relevant housing authority. By following these guidelines, one can ensure a smooth and lawful transfer of ownership and or rights, safeguarding the interests of both the buyer and seller in this affordable housing sector.

On the seller's side, RDP homeowners are permitted to sell their properties legally. However, there are additional considerations to ensure compliance with the program's regulations, if a seller (beneficiary) wishes to sell prior to the eight-year period. Sellers must inform the relevant housing authority and offer them the first right of refusal (5). The housing authority may then choose to purchase the RDP home at the market price, to provide housing for other eligible individuals.

Legalising the sale requires the completion of various legal documents and procedures. The involvement of legal professionals is highly recommended to ensure all legal requirements are met. Additionally, buyers and sellers must be aware of any existing lien or encumbrance on the property, and ensure these are resolved before proceeding with the sale (6).

It is important to engage the services of a qualified conveyancer who specialises in property transactions. Their expertise ensures that all legal aspects are duly addressed, including conducting title searches, verifying the validity of property documentation, and preparing the necessary contracts or sale agreements.     

The purchasing and selling an RDP home necessitates a meticulous understanding of the legal processes and requirements set by the housing authority. By following proper protocols and engaging expert professionals, individuals can navigate the buying and selling of RDP homes easily, with little fuss.    
 

Bibliography

Housing Act 107 (1997) Section 10A.

SASSA Grants, n.d. sassagrants.co.za. [Online] Available at: https://www.sassagrants.co.za/rdp-housing-faqs/[Accessed 5 August 2023].

1. SASSA Grants. Available at: https://www.sassagrants.co.za/rdp-housing-faqs/ [Accessed 5 August 2023].
2. Housing Act 107 (1997) Section 10A.
3. Ibid 1.
4. Ibid 2.  
5. Ibid 2.  
6. Ibid 1.

Written by: Basetsana Shoke

Moderated and approved by Clive Smith