<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
JEREMY MAGGS: Property is supposed to be one of the safest long-term investments in South Africa, but increasingly, I read, it\u2019s becoming a target for sophisticated criminal syndicates.<\/p>\n
What am I talking about? Well, from title deed fraud to full-blown property hijackings, in some cases, homeowners are discovering too late that they no longer legally own their own homes.<\/p>\n
Listen: Property insights: How property fraud works and what you can do to prevent it<\/p>\n
Grant Smee, he\u2019s a regular guest on our programme, he\u2019s the chief executive officer of Only Realty Property Group, joins us now. I want to discuss what is fundamentally wrong or flawed in the system and whether the risk is now systemic rather than incidental.<\/p>\n
Grant, welcome to you. Let\u2019s be blunt here, can South Africans still trust the property system such as it exists, to protect ownership?<\/p>\n
GRANT SMEE: I think that the trust in the system is doubtful at the moment, and that is why the government is looking at digital title deeds and the title deed process.<\/p>\n
I think there is a move towards protecting individuals around property transactions at the moment, but it is absolutely rife with fraud because of the amount of money and the misunderstanding around property transfers that is out in the market.<\/p>\n
JEREMY MAGGS: Explain to me then how a title deed gets transferred without an owner knowing. Where exactly, if you\u2019ve been able to discern this, has the system broken down?<\/p>\n
GRANT SMEE: In more formal sectors, it\u2019s not as common but certainly in more informal areas and poorer areas, there is a lot of title deed fraud where people collaborate and work together to have the deed transferred illegally at the deeds office, but using fraudulent documents and fraudulent information and conveyancers who work in conjunction with those fraudsters to make sure the transfer happens. It\u2019s becoming more and more rife at the moment.<\/p>\n
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JEREMY MAGGS: The worry here, I imagine, is the exposure as far as banks are concerned. Are they funding fraudulent transactions, do you think, unknowingly?<\/p>\n
GRANT SMEE: Yeah, absolutely. The banks are the first line of defence behind fraud. Because obviously if they have a bond registered over property, there\u2019s a protection mechanism there, but they are certainly at risk.<\/p>\n
Read: Hidden R3trn property wealth could unlock SA growth and inclusion<\/p>\n
It is a big movement from both the formal financial sector as well as government to protect the individuals and their property.<\/p>\n
JEREMY MAGGS: Do you think this is criminal ingenuity, or do you think it\u2019s institutional weakness and perhaps poor verification, as you\u2019ve alluded to?<\/p>\n
GRANT SMEE: I think it\u2019s actually both. I think there\u2019s ingenuity or seeing a weakness in the system and taking advantage of that weakness.<\/p>\n
But not only seeing weaknesses in the system, but seeing weakness in education and understanding around property transfers and then taking advantage of the institutional weakness of the systems and checks, particularly because of the volume of transactions that happen.<\/p>\n
Read: Empower the poor with title deeds, says ex-banker Jordaan<\/p>\n
Where this title deed fraud is happening is with low-value transactions, I think maybe sometimes it\u2019s skimmed over and not necessarily investigated like it should be.<\/p>\n
JEREMY MAGGS: Grant, we\u2019ve spoken about the banks. What about estate agents and for that matter, even conveyancers? Would they be part of the problem, even if it\u2019s unintentional?<\/p>\n
GRANT SMEE: I think, certainly there\u2019s been a big move, particularly when we were put on the grey list, that estate agents in particular had to make sure around verifications. There\u2019s been a massive improvement in the sector around checks and verifications.<\/p>\n
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But I think this still is a space where estate agent profiles and essentially fraudulent estate agents are taking advantage of knowing the system, knowing the process and knowing the requirements and taking advantage of consumers.<\/p>\n
I think there is a problem around estate agents and certainly conveyancers. But again, I think it\u2019s a lack of education and lack of information around who are valid estate agents, who are valid conveyancers. How do you verify those? How do you make sure you\u2019re working with credible people who don\u2019t have fraudulent intentions at heart?<\/p>\n
JEREMY MAGGS: And why do you think these crimes, then, are so difficult to reverse once they\u2019ve actually occurred?<\/p>\n
GRANT SMEE: Ultimately, when the fraudsters get involved, they do make sure that the paperwork, particularly if it\u2019s a title deed transfer, they make sure the paperwork is in place and then it\u2019s expensive to have it reversed. You have to go to the High Court and have the whole transaction reversed.<\/p>\n
It\u2019s not as simple as raising alarm bells, and then the transaction will be reversed, and particularly if the property is being transferred and then the banks are involved, it becomes even more difficult and more complex.<\/p>\n
I think, prevention is much better than cure. The cure is very, very expensive and very complex.<\/p>\n
JEREMY MAGGS: All right, that\u2019s title deed fraud. Now, something that has got a lot of coverage here in Johannesburg is property hijacking. It does sound extreme though, Grant. How does someone lose physical control of their own home in practice?<\/p>\n
GRANT SMEE: I think we know of property hijacking, particularly in Windsor East and West, and then also central Joburg, where there are those large buildings taken over by a large number of people and then hijacking that property and taking control.<\/p>\n
But I think what we\u2019re seeing now is individual homes being taken over.<\/p>\n
So either properties that sit empty for a period of time that are accessed by individuals, and then they take ownership or claim ownership, and then it\u2019s a legal process to have them removed.<\/p>\n
Read:<\/p>\n
Illegal land grabs prompt a rethink of the Pie Act
\nTshwane planning to expropriate hijacked and abandoned buildings
\n\u2018Joburg inner city dwellers flee to hijacked buildings due to high service charges\u2019<\/p>\n
Or, what we have seen more recently is taking advantage of access to homes, to an Airbnb structure, which is not necessarily entirely property hijacking, but it could lead to massive issues if it\u2019s not dealt with swiftly.<\/p>\n
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JEREMY MAGGS: Do you think we might be underreporting the scale of the problem? Is it bigger maybe than the data suggests?<\/p>\n
GRANT SMEE: I think it\u2019s much, much bigger and I think it\u2019s because in part some of the situations are resolved fast, either financially or otherwise.<\/p>\n
But I do think that there\u2019s massive underreporting in this space and a massive amount of people taking advantage of the legal process, again, that requires the repossession of property and the complexity and cost of that as well.<\/p>\n
JEREMY MAGGS: At the beginning of the conversation, Grant, you spoke about the digitisation of property transactions. All well and good. Do you think it is going to make things better, given that there are also inherent flaws within that system, particularly when it comes to cyber attacks, for instance?<\/p>\n
GRANT SMEE: I think the common cyber attacks we see are the usual email phishing, less than the hackers going into systems.<\/p>\n
Listen: Phishing emerges as SA\u2019s biggest cyber weapon<\/p>\n
But I certainly believe that if the government does issue a digital transfer process, I\u2019m hoping that there will be a massive amount of security around that process, I think also not only the digitising of the title deed process is important, but also the digitisation of the verification leading up to that.<\/p>\n
So verifying the estate agent with an OTP (one-time password), verifying the conveyancer and the funds involved and then to the title deed process.<\/p>\n
I think if we just digitise the one segment, we\u2019re only dealing with one part of the problem and not the whole problem, and not creating a whole solution.<\/p>\n
JEREMY MAGGS: Thank you very much indeed. Grant Smee, chief executive officer, the Only Realty Property Group, appreciate your time. Thank you.<\/p>\n
#Property #hijackings #title #deed #fraud #surge<\/p>\n","protected":false},"excerpt":{"rendered":"
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