Government’s conveyancers: growing cause for concern

It is accepted practice that the seller of a property appoints the conveyance attorney. Dr Theo de Jager, chairperson of Agri SA’s Land Affairs Committee, looks at the consequences of land claims commissioners in Limpopo and Mpumalanga insisting that the state appoint the conveyancers in land claims cases, including an alarming decline in the number of landowners prepared to be ‘willing sellers’.
Issue date: 2 March 2007

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It is accepted practice that the seller of a property appoints the conveyance attorney. Dr Theo de Jager, chairperson of Agri SA’s Land Affairs Committee, looks at the consequences of land claims commissioners in Limpopo and Mpumalanga insisting that the state appoint the conveyancers in land claims cases, including an alarming decline in the number of landowners prepared to be ‘willing sellers’.

The controversial decision by the regional land claims commissioners (RLCCs) in Limpopo and Mpumalanga to appoint their own conveyancers in restitution transactions, has taken a new twist. To convince white landowners to accept black government-appointed attorneys to do the transfer of their land to claimants at the commission’s expense, instead of having to pay their own lawyers, the RLCC is offering interest at prime rates on the full price of the land should their affirmative action conveyancers fail to transfer the properties within 30 days.

The first property to be transferred by a government-appointed attorney was that of Mrs Aucamp in Hoedspruit, which was done in four working days. Experienced conveyancers are up in arms, as the transfer process in the deeds office (which is in the same department as the land claims commission) usually takes at least six weeks, asking why officials in the deeds office cannot maintain this performance with all property registrations. A

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mid fierce intimidation by land claims officials, threatening to have their properties revalued and thereby causing a further delay of at least two years, or to delay payments, or to ignore their interest in possible joint venture partnerships on restitution farms, the majority of willing sellers in Hoedspruit opted rather to appoint their own conveyancers at their own cost. They had their money safely in the bank months before the rest of the willing sellers, who accepted the government-appointed attorney.

The inclusion of the prime interest rate clause in the purchase agreements of willing sellers such as those in the Mashishimale claim in Phalaborwa, as well as the fast-tracking of transfer procedures in the deeds office itself, have compelled Agri Limpopo to advise its members to accept the RLCC’s conveyancers to facilitate their transactions. It presents a rare opportunity to finalise their transactions in a cheap, quick and potentially profitable manner.

Willing sellers are cautioned, though, to bounce the draft purchase contracts – as compiled by the commission – off an experienced lawyer, as they are usually riddled with mistakes, and would under normal circumstances not pass the strict investigators at the deeds office. This trick to lure clients to government-appointed conveyancers is not sustainable though, and will most probably be abandoned soon. In the very first test run on willing sellers in the Mashishimale claim, the commission could not pay within the agreed 30 days, and whether the will have to cough up depends only on the compassion of the sellers.

Landowners are particularly suspicious of the total lack of transparency in the RLCC’s decision to abandon the centuries-old Roman Dutch legal principle that the seller appoints the conveyancer. It stems from the premise that only the owner as seller can transport his property to another entity or person, and the conveyancer therefore acts on behalf of the seller.

The very fact that affirmative action attorneys are appointed by a government institution without any tender procedures, that even black conveyancers appointed by landowners were side-tracked, and that no one enquired about the BEE status of the landowners’ conveyancers, fuelled the suspicion. No one in the Department of Land Affairs (DLA) has since explained how or why this disruptive decision was taken, what the rules are, what the commission considers to be BEE-compliant in a legal firm, how their interpretation differs from that of the Department of Trade and Industry, or how they plan to implement it. It was introduced to willing sellers by threats and intimidation, and only they [DLA] will know how they hoped to accomplish cooperation and synergy. Since the RLCCs implemented their infamous decision in August 2006, there has been an alarming decline in the number of landowners coming forward as willing sellers in Limpopo and Mpumalanga.

The commission will clearly have to decide whether their core business should be land reform, or the transformation and restructuring of the legal profession. |fw