A significant step towards electronic conveyancing will be proposed during the first quarter of 2018 in the National Assembly of the Electronic Deeds Registration Systems Bill [B 35-2017] (“the Bill”). The Bill was published by the Minister of Rural Development and Land Reform on 7 December 2017 and consists essentially of enabling legislation to develop an electronic deeds registration system.

Background

There is a unique deeds registration system in South Africa, as security of title is not guaranteed by statute. Security of title is based on specific responsibilities assigned by the Deeds Registries Act, 1937 (“the Deeds Registries Act”), to both a conveyancer (who prepares and lodges deeds and documents) and the Registrar of Deeds, whose registration function assist in the highly regarded registration system to afford security of title.

Even though there is a computer system in place for the purpose of maintaining the electronic land register, the preparation and lodgement by the conveyancer, as well as the processing of deeds and documents by the Registrar of Deeds, currently take place manually in terms of the Deeds Registries Act. The explanatory memorandum to the Bill, mentions that the Office of the Registrar of Deeds embarked on a project for the implementation of e-commerce principles, in order to facilitate an Electronic Deeds Registration System (“e-DRS”), which will provide for, amongst other things: - the registration of large volumes of deeds effectively; - improved turn-around times for providing registered deeds and documents to clients; - to provide country wide access to deeds registration services; - enhanced accuracy of examination and registration services; - availability of information to the public; and - security features including confidentiality, non-repudiation, integrity and availability.

Brief overview of the Bill

The definitions in Section 1 of the Bill include the incorporation of a number of concepts contained in the Electronic Communications and Transactions Act, 2002 (“ECT Act”), for example:

  • a “deed or document” will include a data message as defined in the ECT Act “…generated, submitted, received or stored by electronic means in the electronic deeds registration system, and includes scanned images of a deed or document”;
  • a “signature” in respect of any act performed by a conveyancer, notary public, statutory officer or Registrar in terms of the Deeds Registries Act and Sectional Titles Act, will mean advanced electronic signature as envisaged in the ECT Act. Section 2(1) of the Bill enables the Chief Registrar of Deeds, subject to the ECT Act, to develop, establish and maintain the e-DRS. Section 2(2) provides that the Chief Registrar of Deeds, after consultation with the Regulations Board (referred to in section 9 of the Deeds Registries Act) issue directives for functional requirements, technical specifications, specifications for interfaces, standards for information security, operation of the system; processing of deeds, retention of documents and any other matter provided for in the Deeds Registries Act.

In terms of Section 3 of the Bill, a deed or document generated, registered and executed electronically, scanned or otherwise incorporated in the e-DRS by electronic means will for all purposes deemed to be the only original and valid record.

Section 4 of the Bill provides that any user of the e-DRS authorised by the regulations must be registered in the manner and under the conditions as may be directed by the Chief Registrar of Deeds. In this regard it is important to note that the Bill still refers to and include the obligations of a conveyancer and notary public in terms of the Deeds Registries Act. In other words, the role of a conveyancer and notary public as envisaged in terms of the Deeds Registries Act will be retained, unless the Deeds Registries Act and Sectional Titles Act are amended.

The remainder of the Bill deals with the power of the Minister to make regulations, transitional provisions relating to the continuation of the process until the e-DRS is in place and commencement date of the Bill. The commencement dates also include that there may be different dates for different provisions in terms any acts of registration under the Deeds Registries Act and Sectional Titles Act and for different deeds registries.

General comment

The main objectives of the Bill, namely to develop the e-DRS to deal with larger volumes and expedite the registration of deeds are to be welcomed. Nobody will have any issue if the e-DRS will lead to a more efficient and cost effective deeds registration process.

It is generally known that South Africa has one of the best deeds registration systems in the world which afford security of title, mainly due to the specific responsibilities assigned to conveyancers and the Registrar of Deeds in terms of the Deeds Registries Act. As long as these important principles are retained, there should be no issue with the Bill.

It is still early days, but any further developments in the process of implementing the Bill should be properly considered by all parties in the real estate industry, which include developers, owners, banks and financiers.