Who moved my deeds?

The Electronic Deeds Registration Systems Act (e-DRSA) will have a significant impact on the process of registering deeds in South Africa, with an expected improvement on the turnaround times for deeds registration and accuracy of the registration process. To ensure the successful implementation of the system, it is important for all stakeholders to be involved in the process. This includes the Law Society of South Africa, the South African Deeds Registries, and Department of Rural Development and Land Reform.

Although the e-DRSA is a step in the right direction, it is important to consider the cost of implementing such a system, the impact it will have on the stakeholders and the current paper-based manual deeds registration system. The need for an electronic deeds registration system is becoming increasingly apparent with the demand for quicker and more efficient ways of registering properties as land ownership continues to rise.

The Legal Lowdown

Change is inevitable as technology advances and the demand for digital services increases. It is vital to keep adapting and changing to ensure continued success and efficacy. The need for an electronic deeds registration system is becoming increasingly apparent as the demand for quicker and more efficient ways of registering properties rises with land ownership increasing.

The Electronic Deeds Registration Systems Bill (“the Bill”), signed into law on 2 October 2019, and the Electronic Deeds Registration Systems Act, Act 19 of 2019 (“e-DRSA”) of which only section 2 came into effect on 6 December 2019, were passed to modernize the manual registration system. In 2016 the Minister of Rural Development and Land Reform also published an informative memorandum on the object of the Bill.

Essentially, the e-DRSA seeks to accelerate the deeds registration process, strengthen the protection of people’s rights to their property and maintain the integrity of the deeds registration system, while taking into account the legal requirements of the Electronic Communications and Transactions Act, Act 25 of 2002. The e-DRSA is based on the principles of electronic commerce, where all types of deeds can be registered electronically and securely.

The Law Society of South Africa (LSSA) submitted their comments on the e-DRSA in 2017, when it expressed its support for the Draft Electronic Deeds Registration Systems Bill, as amended. The Law Society suggested various amendments to ensure the system operates effectively and has raised several concerns in their comments:

• They questioned whether the powers of the Chief Registrar of Deeds are detailed enough to deal with notary-related matters.
• The LSSA explored the concept of having different regulations in different deeds offices across South Africa, even though technology allows for a uniform system, accessible to all users throughout the country.
• They further noted that different regulations are not genuinely necessary, as all deeds offices should, in theory, have a unified approach.

The LSSA concluded that the successful implementation of the electronic systems, and the full protection of the public’s rights, will require close consultation between the government and affected stakeholders.

The scope and objectives of the e-DRSA can be construed:

1. to facilitate the registration, management, and maintenance of electronic deeds and documents in the Republic of South Africa, while meeting the requirements specified in the Act;
2. to provide a secure, transparent, and efficient system for the registration of electronic deeds and documents, while safeguarding the integrity of the process;
3. to ensure the full and timely settlement of deed transactions, for the benefit of all parties involved;
4. to ensure that only properly authorized persons are allowed access to the electronic deed registration system and its data;
5. to provide an effective and accessible dispute resolution system, for the resolution of any disputes arising from electronic deed transactions;
6. to ensure that the Electronic Deeds Registration System is compliant with all applicable laws, regulations, and policies;
7. to provide a framework for the coordination between the various stakeholders involved in the electronic deeds registration process; and
8. to reduce the risk of fraud and error.

The Transitional provisions, contained in Section 6 of the e-DRSA, is a clear indication that due regard was given to the comments submitted by the LSSA and ensures that the e-DRSA does not affect the validity of any registrations made before the Act came into effect. The Registrar must continue to register, execute and file deeds and documents, as prescribed by the Deeds Registries Act and the Sectional Titles Act, until the electronic deeds registration system, or related provisions or regulations, are in place. At that point, the registration and filing procedures in these Acts will be discontinued.

Conveyancers, notaries, public, and other statutory officers, must also continue to prepare and lodge these documents manually until the electronic system is ready. Any documents or deeds that are electronically registered or executed, will be deemed to have been done in the presence of the Registrar, with the authorization of the owner. However, the Chief Registrar of Deeds may issue a directive that allows for manual registration, execution, and filing to continue, if necessary.

Notwithstanding the eagerness for an electronic deeds registration system, an indisputable fact is that the implementation of an electronic deeds registration system in South Africa will be expensive. Provision 6 of the Memorandum on the Objects of Electronic Deeds Registration Systems Bill relates to the financial implication to the state. The cost of the system itself, set-up costs, training and implementation costs, as well as system maintenance costs, will be important factors to consider. According to the Committee of the Rural Development and Land Reform’s report Annual Report 2017/18, the Chief Registrar would issue directives on interfacing with authorized users on any specific software and license fees required and the costs involved, especially for smaller attorney firms. The Department said that the system would be web-based, and no license fee would be payable, to allow users sufficient lead time to prepare.

As best said by Dr. Spencer Johnson, in his parable on Who Moved My Cheese: “Adapt to change quickly. The quicker you let go of the old cheese, the sooner you can enjoy the new cheese” (Who Moved My Cheese? Dr. Spencer Johnson. New York: Putnam, 1998).

In conclusion, the implementation of an electronic deeds registry system in South Africa is a positive step towards modernizing and streamlining the property registration process. The challenges of implementation, such as the cost and timeline involved, remain topics for further discussion. What is clear is the system will offer a range of benefits, from improved security and efficiency to increased transparency. Keep an eye out for our sequel to this article where the actual means of implementation will be explored.

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Written by Marike Ehlers

Moderated and approved by Wessel de Kock