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Policy Addendum for improving title transfer in
UISP projects
February 2015
Purpose of presentation
Outline of presentation
• Policy Addendum: background and objectives
• Scope of Policy Addendum
• Addendum development process
• Some key concepts
• Some key features of the Addendum
• Feedback from municipalities & discussion
• Final opportunity for feedback
Policy Addendum
Background
• Policy for improving title transfer in new greenfields projects (title transfer policy)
approved March 2014
• Title transfer policy sets out comprehensive and detailed provisions for transfer,
and background to the legal process
• Many of these provisions are applicable across all subsidy projects ending in
ownership – but some differences in UISP projects
Objectives of Addendum
• Indicate key differences between greenfields and UISP projects regarding transfer
• Shows how UISP projects can fit within general rules and policy provisions set out
in Title Transfer Policy
• Adapts a few policy provisions to address transfers in UISP projects
Title transfer policy
Central goal of the Policy
• Achieve timeous transfer of title to housing beneficiaries in new
greenfields projects
• Policy defines timeous property transfer as transfer that occurs
within 150 days of beneficiary occupying housing unit
• A longer delay in transfer leads to problems and adds to backlog
Scope of the Addendum
• Addendum covers the transfer of ownership-based products to approved beneficiaries (i.e. top structures and serviced sites)
• The sale of units to non-qualifiers is not covered in this addendum (normal process of sale will pertain)
• Focus of the Addendum is on improving transfer in existing types of UISP projects
• Projects in which there is a mix of top structure and serviced site end points for ownership are catered for
• Projects in which serviced sites are transferred a long period before top structures are built are not explicitly covered in this policy (but not prohibited)
Addendum development process: Aug 2014 – March
2015
Research on legal process in UISP projects and problems related to transfer (Mainly Aug/Sept)
Engagement with Departmental officials
Engagement with municipalities
- Flag scope of Addendum and broad policy approach with municipalities via SALGA Infrastructure Working Group (mayors, MMs, top officials)
- Draft Addendum circulated to all municipalities in Dec/Jan for comment via SALGA; comments received
- Presentation to municipalities on 19 Feb: Presentation of, Q&A on Addendum, response to municipalities’ comments at SALGA Infrastructure Working Group in February 2014
Briefing of Provincial Min for Human Settlements
- End of Feb
Concepts
Phases 1&2: Pre-formalisation
Phase 3&4: Formalisation
Qualifiers & non-qualifiers: possibility of different kinds of qualifiers in
UISP projects
Products & product differentiation
Resting points: serviced sites of various kinds; incremental products
to path to end points
End points: end point of government subsidy: top structures, ESS,
projects with mix of ESS and top structures, possible other products,
Two types of projects: 1-stage formalisation
Formalisation process in a UISP project gives rise to a finite number of subsidy units
clear site / greenfields site service installation and top structure occupation
| transfer |
• Majority of projects are 1-stage formalisation
• Relocation coupled with subsidy approval means that UISP 1-stage formalisation
projects taken a very form to greenfields projects
Approach followed in the Addendum
2-stage formalisation
clear site / greenfield service installation occupation top structure occupation
| transfer |
• Developer implements formalisation process in two stages • Stage 1: formalised serviced sites developed as resting points for beneficiaries and occupied for a period.
Sites may be enhanced individually to some degree or via communal services
• Stage 2: end points are produced
• Majority of 2-stage cases: Transfer once top structures are built/being built
(preferred option)
Feedback from municipalities
George
- Important to only transfer property once end point products are built in
a 2-stage formalisation project - esp in a municipality like George which
is on a migration path; occupation without transfer allows developer to
gauge whether occupant will settle
- Some municipalities find it possible to transfer property before the
beneficiary occupies the top structure – can this be a universal standard
Overstrand
- Support the policy
General rules set out in Policy
When should transfer occur? Only products fit for habitation, or where the
completion of these products is imminent, should be transferred
When should subsidy approval occur? Only an approved beneficiary
should be given occupation of a unit intended for ownership
When should occupation occur? Before occupation, the developer must
have entered into a written sales agreement with the beneficiary
specifying the precise property (by reference to the erf number) which
gives the right to the beneficiary to take transfer of the unit.
Provision 1: Key legal process steps are completed before
formalisation starts (GP registration); enforced and supported
through project approval
Formalisation Phases 3 & 4
Provision 3: Milestones - handover certification
1-stage formalisation projects• apply as in Policy
2-stage formalisation projects• Top Structure: Beneficiaries on formalised sites receiving a top structure as an end point
subsidy product may receive two certificates, when first occupy formalised plot (commodatum agreement certificate) and at handover of the unit (“handover certificate”)(the second certificate is of relevance
• Serviced Site: Beneficiaries receiving a serviced site as an end point subsidy product may get a commodatum agreement certificate (if no relocation between when first occupy serviced site and when receive the right to take transfer of the serviced site via a signed sales agreement)
Two options to certify occupation of the serviced plot to be transferred• New “handover certificate” provided after beneficiary approval for the serviced site and more or
less at the same time top structure beneficiaries are signing handover certificates
• No “handover certificate” i.e. Not required (and sales agreement date used in monitoring indicator)
Option chosen: handover certificate for serviced sites
Implementation date for the policy
Addendum and rules and provisions come into for all UISP projects without
UISP Phase 3 project approval on 1 April 2015.
Thank you
Legal process
The Policy outlines the legal steps that must be followed, in a particular sequence, for plots to be transferred to beneficiaries
Key steps:
1. Acquisition of land for the project by developer
2. Approval of the development by the planning authority (the munic/ProvGovt)
3. Approval and registration of GP by SG and DO
4. Signing of sales agreements by land owner and beneficiary
5. Lodging of transfer documents at DO
• Array of legislation that governs the legal process, and the sets of authorities and professionals involved in each step of the process.
• To achieve successful transfers, developers need to co-ordinate legal steps with planning, beneficiary administration, service installation and construction
Policy provisions that directly affect municipalities
Provision Purpose of provision
1. Changes to project
approval conditions
and reorganisation of
tranche payment
schedule
Dept to make sure developers complete 3 legal steps
before providing funding for servicing/construction: 1)
development approval; 2) GP approval; 3)
registration of the GP
2. Changes to information
requirements regarding
rights for land
acquisition funding
applications
Dept to make sure that developers have identified
land legal issues (e.g. servitudes) and plans for
addressing them before grant land acquisition
funding
3. Introduction of project
management
milestones
Project managers and regional planners report that
specific steps in the legal process (milestones) have
been completed and collect evidence from
developers
4. Increase in transfer
retention amount
New subsidy payment incentives for property
transfers: Dept will withhold double the value of the
subsidy amount for transfer until unit is registered
Policy provisions internal to the Dept that support implementation
Provision Purpose of Provision
5. Designation of Chief Director: HS
Implementation as Champion of
Policy
Champion oversees changes to the Dept’s systems,
procedures and supporting documents, and reports
on implementation progress
6. Changes to contracting
municipalities as project
developers
Contract template amended to support the provisions
of Policy including increase in transfer retention
amount
7. Measurement of the monitoring
indicator
Dept will check efficacy of the Policy by gauging
extent to which the 150 day benchmark is being met
Legal process
Recommended