1. DEPARTMENTAL RESPONSE TO THE 2017 STATE OF THE NATION ADDRESS HUMAN SETTLEMENTS PORTFOLIO COMMITTEE 14 MARCH 2017

2. Purpose of Presentation
To provide actions on matters raised by President Zuma in SONA 2017 related to the Department on the following:
Property Practitioners Bill, and the Transformation of the Real Estate Sector
Title Restoration Project, and prioritizing the eradication of the registration backlog.

3. SONA 2017
“A draft Property Practitioners Bill will be published by the Department of Human Settlements for public comment with the purpose of establishing a more inclusive, representative sector, towards radical economic transformation.”
“Among key priorities this year, government will also address the increasing delays and backlogs in registration and issuing of title deeds to beneficiaries of housing projects funded by the capital subsidy.”

4. 1. Property Practitioners Bill
Statement on the Cabinet meeting of 1st March 2017
“3.7. Cabinet approved for the publication of the Property Practitioners Bill, 2016 in the Government Gazette for public comment. The Bill repeals the current Estate Agency Affairs Act, 1976 (Act No. 112 of 1976).

5. 1.1 Property Practitioners Bill
The Bill will now be Gazetted for 30 days
A Public Participation phase will now also follow in all provinces.
The comments will be consolidated and considered and incorporated into the Bill for further processiong towards tabling, adoption and promulgation.

6. Towards Transforming the Sector
The Bill will ensure that all segments of the market is transformed in that bond originators, bridging finance companies and other players need to be licensed in order to trade in the market
The Property Practitioners Bill will force compliance with the Property Sector Charter Code which stipulates transformation targets that Property Practitioners must comply with

7. Towards Transforming the Sector
The Bill enable the Authority to implement and monitors transformative programs that will serve as a further catalyst to transformation
The Bill enable the Authority to implement consumer awareness progress that will encourage ownership of property by previously disadvantaged individuals and groups

8. Towards Transforming the Sector
The Bill also requires that all organs of state transact with their properties using licensed property practitioners who complying with the property charter and other empowerment programs
The also requires that private use compliant property practitioners when transacting with their properties

9. State of Transformation in the Property Sector
Transformation in the property sector is a lingering challenge. The figures are deeply concerning with only 8% of BO enterprises and 17% of black professionals nationwide
Within the real estate sector, there are approximately estate agents of which approximately 6100 are PDI persons. This means that only 17% of the registered estate agents are PDI In terms of equitable distribution, this means that 83% of white estate agents shares the lion’s share of commission earned of selling and renting properties with total value of R7 trillion market.

10. Rand Size of the Property Sector Exclusing Subsidised Market

11. Future Transformational Programmes
Being the professional body of the sector, the EAAB is committed to transforming the sector. Besides, it has a responsibility to support the Department of Human Settlements in achieving the priority stated in the MSTF
One Learner One Estate Agency Youth Programme:
Learnership programme aimed at unemployed youth.
candidates to benefit over a period of three years.
Establishment of New Firms
new firms
Engagement and consultations with formalised and established businesses
SMME Programme
Regularisation of non-compliant estate agents.
Interns over 35 years of age.
“Missing middle” in the industry.

12. Towards a Radically Transformed Sector
A Transformation Department has been established at Executive Level and reporting to the Transformation Committee of the Board. The Transformation department is responsible for the following functions:
Drive Transformation both internally at EAAB and externally to ensure compliance with applicable legislation such as Employment Equity Act and Broad-Based Black Economic Empowerment and Property sector charter.
Ensure economic inclusion of the previously disadvantaged individuals (PDI) in the property sector.
Engage with Public Works department to ensure PDI participate in the property business.

13. Towards a Radically Transformed Sector
Establish a Real Estate Incubator to support and grow current “small” Estate Agencies, rehabilitation of non-compliant Estate Agencies and empowerment of youth, woman and persons with disabilities with focus on previously disadvantaged individuals.
Project Management of Title Deeds.
Promote Consumer Education and awareness and protection by engaging other stakeholders in the property value chain like finance providers.
Cross functional interface with other section to ensure that transformational agenda is pursued, i.e. reviewing models and initiatives.

14. 2. Title Restoration Project (TRP)
Commonly known that the measures for TRP have not yielded desired results.
Delivery has been below par, and commitments by Provinces and Municipalities have not been honored.
The Department reconsidered the implementation modalities for the TRP.
A set of specific resolutions/endorsements made by MinMec on 24 Feb. ‘17

15. State of Performance
Province
Backlog
2014/15
2015/16
2016/17
Total To Date
Target
Output
(Q1,2 &3)
E/Cape
110,317
7,931
7,920
7,666
26,225
9,954
25,551
F/State
78,598
738
7,506
7,199
29,780
9,914
17,914
G’teng
165,711
7,808
13,900
18,032
86,251
9,937
41,142
KZN
158,905
4,471
7,540
3,904
9,054
2,260
10,580
Limpopo
42,391
309
4,562
2,373
11,994
1,123
3,805
M’langa
81,702
8,169
11,000
5,123
9,000
4,412
17,704
N/Cape
31,893
648
3,500
2,336
7,573
4,802
(6,800)
7,786
N/West
69,874
7,655
586
17,789
8,600
9,186
W/Cape
78,871
26,986
5,000
12,837
9,480
4,311
44,134
TOTAL
818,262
57,060
68,083
60,056
207,146
54,806
177,295
Colour coding refers to:
delivery in relation to backlog
Institutional readiness to deliver
Institutional capacity & capability within Province/Metro

16. Institutional Arrangements Reconsidered
MinMec
Tech. MinMec
National
Steering Comm.
(DG & DDG: PPMU)
Natl Proj. Co-ord.
(EAAB)
Inst. Support
& Secretariat
9x Provincial
Steering Committees
3x Regional
Project Mgrs
Logistic Support
Conveyancing
Other Service Providers
Dashboard
Inst. Support
Govt Depts
Prof. Inst.
Research Inst.

17. Institutional Arrangements Reconsidered
Responsibilities of TRP Task Team
Access to ALL records related to registration backlog within Provinces & Metropolitan Municipalities.
National Department has oversight on all new appointments of Service Providers (SPs), & assessment of performance of current SPs.
Assume overall responsibility for TRP Dashboard.
Annual targets to be included in HOD Performance Agreements.
Delivery Targets: offer view & recommendations regarding expected delivery, and ensure that commitments & cash flow expenditure.

18. 2017/18 Business Plan* PROV. TOTAL E. Cape R61,626 1,074 27,160 28,234
HSDG RESERVAT’N
PRE ’94
POST ’94
TOTAL
E. Cape
R61,626
1,074
27,160
28,234
Free State
R47,158
780
16,506
17,286
Gauteng
R99,426
6,500
55,000
61,500
KZN
R95,344
1,000
23,000
24,000
Limpopo
R21,148
200
7535
7,735
M’langa
R48,612
2,500
22,500
25,000
N. Cape
R19,135
1,200
7,100
8,300
North West
R47,628
8,500
W. Cape
R47,322
3,000
21,000
R487,404
16,582
188,301
204,883
* The final figures will be confirmed subsequent to receipt of final HSDG B/Plans.

19. Institutional Matters
COGTA: Rates Clearance
COGTA to issue directive regarding exception of Rate Clearance Certificate
Engagement with specific problematic municipalities
Public Works
Release of Disposal Records to Provinces and Municipalities i.o.t. prioritize transfer of specific land parcels.
Possible partnership with DPW on Pilot Transfer Initiative

20. Institutional Matters
Rural Development
Cost of Registrations
Continued liason with Regional Deeds Registries
Title & Communal Land
Property Registration Reform
Dispute Resolution Mechanism
Estimated that as much 20% of known backlog cannot be resolved timeously & cost-effectively in absence of an approved dispute resolution mechanism.
Draft policy document to be considered by Department’s Policy Task Team in March before seeking approval at next MinMec.

21. Policy Matters Timeous Registration: Current Projects
Ministerial Directive
Instruction register a property initiated by wall-plate stage.
Final sign-off by NHBRC once demonstrable proof of lodgment of registration papers having been commenced.
The Developer to withhold a minimum of R2, of the subsidy until such time as it is confirmed that the registration papers have been lodged with the Deeds Registry.

22. Thank You