Estate agents and homeowners are now caught up in the disruption caused by the Johannesburg Deeds Office closure for relocation.
Although the Johannesburg Deeds Office promised to be relocated within six weeks in March this year after its building was closed down due to poor working conditions, it remains closed, causing chaos for property sellers and estate agents.
The closure of Johannesburg’s Deeds Office with no clear reopening date is causing major problems for property transactions, leaving sellers without access to their proceeds and estate agents waiting months for commission payments that would usually be processed within weeks.
Jason Joffa from Lamna, a bridging finance company, says the disruption created an immediate cash flow crisis for thousands of property sellers and estate agents. “What should be routine 6 to 12 week registration processes are now delayed further for at least two to three months.
“The closure affects the entire sales process because everything is stuck, and people need their money. While the Deeds Office moves to temporary premises, sellers are stuck waiting for the proceeds they need.”
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Estate agents not getting paid due to Deeds Office mess
It is equally challenging for estate agents, he says. “Commission payments are only processed once property transfers are registered, meaning agents who successfully concluded sales face lengthy delays before receiving payment.”
Lamna provides bridging finance for property transactions and is currently helping sellers and estate agents navigate the crisis.
For estate agents caught in the registration backlog, Lamna offers advances of up to 70% of commission. Joffa says the process is designed for speed, and agents can approach Lamna directly or through their conveyancing attorneys, who sign an undertaking and then receive payment within 24 hours.
“Estate agents have ongoing business costs and cannot afford to wait months for commission on completed sales. Our bridge financing allows them to maintain cash flow while the administrative backlog clears.”
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For property sellers, Lamna can advance up to 80% of sale proceeds, addressing various financial pressures that arise during the extended waiting period, including securing deposits for onward property purchases, covering emigration costs, or meeting other expenses.
Joffa says property bridging finance can help to speed up the sales process, or when homeowners’ association levies have not been settled, or municipal rates clearances are outstanding, which must be resolved before properties can be lodged at the Deeds Office.
“Property developers are particularly affected. They have construction costs on new units that cannot wait for the administrative process to catch up.”
Sellers can access Lamna’s services directly or through their transferring attorneys.
“This is a cash-intensive business that requires access to substantial funding,” Joffa says while the Deeds Office establishes operations in temporary premises. Lamna expects demand for bridging finance to remain elevated as the backlog of delayed registrations is processed through the system.
“We cannot control when the Deeds Office reopens, but we can ensure that sellers and agents do not have to put their lives and businesses on hold while they wait,” Joffa says.
