Recipients of government-subsidized housing are granted full ownership rights over the property and this ownership is formalized through the issuance of a title deed which is registered at the Deeds Office. It is important that recipients read through their title deeds and are aware of any restrictive conditions contained therein. An important clause that should be noted in these title deeds is one that we call a pre-emptive right condition. This condition restricts recipients from selling their property within an eight-year period from the date that the property was acquired unless, the property is first offered back to the provincial housing department, or they provide express consent for the sale.
The pre-emptive eight-year clause is an important legal safeguard introduced by Section 10A and 10B of the Housing Act 107 of 1997 to protect recipients of low-income housing and address South Africa’s housing backlog. The clause specifically aims to prevent the unlawful sale of subsidized houses, which only worsens housing shortages by diverting homes intended for the most vulnerable segments of the population. The clause also prevents opportunistic sales where beneficiaries might sell their homes for immediate financial relief, only to find themselves homeless later.
Although the eight-year clause is binding on owners and against third parties, provisions exist to waive it under specific circumstances. Recipients looking to sell their homes within the restricted period must first offer the property back to the relevant authority who may decide whether they would like to accept the offer. Should the offer be rejected, a formal request must be made to the Department of housing for consent to sell the property. The Department of Housing will assess each application based on its merits and the supporting documentation provided by the recipients to prove their reason for wanting to sell the property.
Each provincial department may have a varied list of acceptable reasons for selling the property however, for the Western Cape, acceptable reasons can be as follows:
- A job offer in another province.
- Relocation as a necessity.
- Improvement in standard of living.
- Schooling.
- Health complications.
Before the consent is granted the sellers must also fully understand and accept that they will no longer qualify for any state housing assistance in the future should they move forward with the sale.
It is also important to know that the Department of Housing will not approve a waiver where the recipients have owned the property for a period less than two years.
The landmark case of Abdul v Williams and Others (CA227/2018) underscored the importance of adherence to the forementioned provisions. In this case, a sale was executed without departmental consent and as a result the sale was found to be void ab initio which led to significant financial losses for the buyer.
For this reason, it is important to make sure that all individuals understand what conditions are contained in their Title deeds and that they are aware that where a seller fails to comply with the pre-emptive clause in their title deed, the sale could be invalid and void.
Article by Jasmine Jacobs, Candidate Attorney (LLB)
For more information contact jasmine@rgprok.com or 0446019900. www.rgprok.com
