CAHF launching property registry blockchain pilot in South Africa

property registry blockchain South Africa

The Centre for Affordable Housing Finance in Africa (CAHF) has announced that it has teamed up with 71point4 and Seso Global to build South Africa’s first-ever blockchain-based property registry.

This partnership aims to bring distributed ledger technology to South Africa’s property industry by creating a platform for recording and validating the ownership of property. The blockchain pilot will involve about 1000 properties located in Makhaza, Khayelitsha (Western Cape). CAHF says these homes are Government subsidised properties that have not yet been registered on Deeds Registry.

South Africa blockchain property registry

Seso Global CEO Daniel Bloch said that the pilot system will be the first working product example of a blockchain-based property registry in South Africa. Seso itself provides a platform for recording ownership of property and it maintains an immutable record of transactions such sales and transfers out of deceased estates. Seso also integrates this data with third parties such as mortgage lenders to facilitate transactions.

“For the time being, property owners will record these transactions at the Transaction Support Centre, a walk-in housing advice office created by CAHF and 71point4 located in the area. But over time, we will record transactions through the Seso app”, Bloch said.

Apart from ensuring that data relating to property are stored in a secure decentralized database, the blockchain property registry system will also enable back-to-back secure recording of transactions. There are also plans to integrate the system into South Africa’s Deeds Registry once certain obstacles associated with the process are removed.

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The problem

South Africa has a serious titling problem. The government has built over three million RDP houses since democracy. But CAHF’s analysis of deeds office data indicates that only 1.9 million of these properties have been registered.

Moreover, the National Department of Human Settlements, Water, and Sanitation (NDHSWS) estimates that the title deed backlog for RDP properties built prior to 2014 currently stands at 511 752. These properties were given to beneficiaries, but no title deeds were registered and handed over. At the same time, there is a backlog of more than 350,000 title deeds on newer properties.

Registering these properties later on after they were built and handed over to subsidy beneficiaries presents a complex task to the administration. Besides, there are some cases where original subsidy beneficiaries are no longer living in the properties. Some beneficiaries might have passed away, some might have tenants in their properties while others have sold their houses informally.

The difficulties with registering properties were explained by Melzer, founder and lead consultant at 71point4.

“To create a register of property owners we first had to go door to door to find out who lives in each property and to establish how they came to be there,” says Melzer, adding that they’ve hired a team of enumerators to assist with gathering data.

Property registry solution

The South Africa property registry blockchain solution was conceived with that blockchain integration can streamline the selling process and bring a higher level of efficiency to the industry. CAHF has stated that properties would sell well over R200, 000 if they were registered on a trusted registry and made “bankable”. This means making it easier for buyers to obtain mortgage finance, lowering the costs of purchasing a property.

The City of Cape Town, meanwhile, would be able to use the system to obtain an accurate and up-to-date record of property ownership. It can then use that information to boost revenue collection and facilitate building plan approvals.

CAHF has already started registering properties on the platform, though it will take some time before all the required information has been collected and validated.

“We hope that these properties can be registered in the deeds registry within a few months, and we are working closely with the City of Cape Town to facilitate that”, said Melzer.

Melzer further added that those beneficiaries who no longer live in the property will be traced to confirm the ownership details. They will also be working with the City of Cape Town to amicably resolve cases where there’s a dispute on who owns the property.

Kecia Rust, CEO of CAHF commented that they will be using Seso’s blockchain platform to manage various client service requests such as helping clients to regularise informal sales and wind up deceased estates.

“Going forward, as the country moves towards an electronic deeds registry, we hope the lessons we have learned will provide valuable evidence to inform the development of accessible, secure, affordable and efficient mechanisms to facilitate property market transactions […] particularly in entry level segments of the market where existing mechanisms are simply too costly, Rust concluded.

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About the author

Vincent Olago

Vincent Olago

Vincent Olago is the Managing Editor of Ledger Africa and has been active in the blockchain space for three years now. He's passionate about entrepreneurship and the potential of disruptive blockchain technologies to reshape our world. He supports startups to tackle blockchain challenges, address strategic problems and optimize growth.