3 Property fraud prevention steps for verifying whether or not title deeds are genuine.

By Cain Ndhlovu

Verifying whether or not a seller’s title deeds are genuine is the first line of defense against property fraud in Zimbabwe. Failure or reluctance to verify can result in individual loss of thousands of dollars to criminals. Criminals take title deeds as a document of primary focus in their activities because it is central to most real estate sales in which millions change hands. This article therefore, presents three property fraud prevention steps to be taken by an aspiring property owner before he parts with hard earned cash.

STEP 1. Positive identification of title deeds.

When you ask to see title deeds the document that a seller furnish should be identified as a legitimate copy of title deeds. To this end here are features one should look for;

Feature A. The title

The first thing you should see on a title deed is its title or name that simply tell you the type of a title deed that copy is. The most common titles you are more likely to come across are Deed of Transfer and Deed of Grant and these are clearly written right at the very top of the first page.  The former refers to a type of title deed that is for a property that was transferred from a private individual whilst the later refers to another type that is for a property that was transferred from the State. A lawyer called a conveyancer is needed for preparing a Deed of Transfer and a secretary of lands is the one responsible for executing the creation of the Deed of Grant.

We also find other different titles for title deeds that are created in order to address various property ownership circumstances in which individuals find themselves in life. Here are three;

i. Deed of Rectification
This one is issued for the purpose of correcting an error whereby an owner would have been given title for a wrong property.

ii. Deed of Partition

This is issued when joint owners of a piece of land, decide to redistribute their land such that each one of them will hold his or her share under a separate title. It is prepared by a conveyancer and a permit is required from the local authority.

iii. Deed of Exchange

A deed of exchange is issued in a situation in which owners make arrangements to exchange property. Duty is payable on the value of both properties.

Feature B. The Owners

Another indispensable feature in all title deeds is the owner(s) or the transferee(s). This is a person or company in whose favour property rights are transferred. The person identified as this owner or transferee must be the seller unless there is a legally authorized representative. If you carefully read the title deed it is very clear about the identity in terms of first name, surname and date of birth of those in whose favour the right to property is being transferred. Here is a list of two common types of owners;

i. Individuals as owners

These will be individual people owning property as one or more owners.

ii. Companies and other entities as owners

A title deed can have none personal owners in the form of companies and other entities like trusts. These are represented by an agent who must be authorized by a resolution of the board.

Feature C. Property description

This is the legal description for the identification of the property on the physical landscape. To this end the title deed destinguish the property in terms of the number of its stand, size, name of immediate suburb and town.

 The legal description is very different from the common identification methods like street address that people ordinarily use in day to day life. Title deeds do not use latest names for locations like Westlea, Bloomingdale, Madokero  Budiriro etc. It in fact uses old names like “ remainder of Gleneagles Farm” for Budiriro including colonial ones like “Salisbury” for Harare .

It is also important to know that title deeds are given only for the land hence the property description focuses on the land and does not include the buildings. Nevertheless, property value incorporate both that of the land and its improvements.

Feature D. The stamp

This is the Deeds Office’s insignia of authority. The Stamp is what set title deeds apart from other proofs of ownership like agreements of sale. Agreements of sale can have features that are equivalent to 1 to 3 given above but they do not have the Deeds Office’s stamp.

Tips about positive identification of title deeds

In soccer a football team can concede fatal goals because of basic goalkeeping errors. Similarly, in property sales people lose a lot of money to criminals  because of simple things like a buyer’s failure to identify and differentiate a title deed from any other document.

STEP 2. Verification of seller legitimacy

A person posing as a seller of property must have legal authority to do so and this is legitimacy. A legitimate seller is a positively identified person who is stated as the transferee in the title deed or such positively identified person who is given the right to sale a specific property through relevant documents like a special power of attorney and letter of administration. These documents that are meant to identify sellers who are representatives must do so without ambiguity. Common documents critical for positive identification are national ID card and a valid passport.  Here are some types of sellers;

1. Seller representing an entity

This is the case in which a property owned by a company or an entity is being sold through the representation of its agent. In addition to a national ID this agent should furnish a resolution of the board authorizing him to represent the company or any other entity like a trust.

2. Seller representing self

This is when the transferee is the one selling property. Under these circumstances he only produce a national ID card.

3. Seller representing a deceased estate

When property belonging to the dead is being sold in order to distribute sale proceeds to beneficiaries only a representative appointed by the High Court known as the executor operate as the seller. In addition to a national ID this person furnishes a letter of administration appointing him or her as the executor.

4. Seller representing an absent owner

Under circumstances  in which an owner due to other attachments can not be present during the sale of property a  representative who will act on the seller’s behalf and is appointed through a special power of attorney.  In addition to the power of attorney a representative of an absent owner must furnish a national ID.

Tips about verification of seller legitimacy

1. A letter of administration is verified at the High Court.

2. A minor that is a person below the age of majority has no contractual capacity therefore cant sell property he or she owns. Its wise to avoid this kind of seller.

3. A seriously ill seller may not be in a good condition to enter into a contract so his legitimacy may letter be challenged in court. Again its wise to avoid such kind of sellers.

STEP 3. Verification of transferability

The word “transfer” is probably the single most common word in any talk about title deeds and property purchase. This can be so because the success of selling or buying property is solely hinged upon the legal ability of property ownership changing hands a characteristic commonly known as transferability. Some properties are readily transferable whilst others are not easily transferable and others are not transferrable at all. There are various circumstances that affect interests in property and the Registrar of Deeds indicate this through relevant endorsements  on the title deeds. For example if its already sold the deeds will be endorsed by the words TRANSFERRED.

Through a process commonly known as deeds search a serious buyer should verify title deeds transferability at the Deeds Office. In Harare these offices are located at corner Nelson Mandela and Angwa streets.  It defeats the wisdom of due diligence to conclude that all is well because a seller furnishes a seemingly clean copy of deeds.

As stated earlier there are circumstances that affect interests in property. Its possible that there are other people like debtors e.g mortgage financiers who can have a legal right to have a say in matters of a property’s ownership in addition to the transferee(s).  A buyer must know who are these  people before parting with hard earned cash. Here  are some of the different  situations through  which these other interests can have a say in the property’s ownership and are expressed by title deed endorsements.

1. Transferred

When a property is transferred this simply means its already sold  to someone else. So the message to you simply is “please look for another property to buy.” There is no transferability here because the property is transferred already!

2. Mortgage

This is a situation in which a property is bonded by a mortgage bond because the seller at some point used it as collateral security. This property is transferable on condition that with corporation from the bank involved the bond is first lifted. Usually, the debt is cleared by part of the proceeds of sale.

3. Unifract

This is a situation in which a person is given a right to property that is limited to use and does not include selling. This right is usually for as long as the person lives and comes as an inheritance. In order to facilitate transferability under these circumstances one of the best methods to use is that the beneficiaries must be engaged in order to give consent to the lifting of this caveat in return for a share of sale proceeds.

Tips about verification of transferability

1. A search fee is paid at the Deeds Office in order to do deeds search you should set aside money for this expenditure.

2. According to the Deeds Registry regulations its transactions are mandatorily done only in person and not over the phone.

DISCLAIMER

This article is made available for educational purposes only as well as to give you general information and a general understanding of real estate investing, not to provide specific advice. The article should not be used as a substitute for competent advice from licensed practitioners. Sharing it with friends is welcome !


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