Blockchain technology can be used for many things aside from cryptocurrency and one of those uses is being piloted in Cape Town.
The Centre for Affordable Housing Finance in Africa, 71point4 and Seso Global have partnered up to trial the first blockchain-based property register.
The pilot includes 1 000 properties across four sites in Makhaza, Khayelitsha. The properties in question are all government subsidised and have not yet been registered with the Deeds Registry.
The solution creates a record of who owns the house and because this record is part of a blockchain, updating it won’t remove historical data.
The platform was created by Seso Global and it can record transactions such as sales and transfers out of deceased estates and integrates with third parties who facilitate transactions, including mortgage lenders.
But kicking this pilot off was a massive undertaking for a number of reasons.
The first, major reason is that there is a backlog of deeds for RDP houses. According to the Centre for Affordable Housing Finance in Africa, 511 752 deeds for RDP houses built in 2014 are not registered with 351 470 title deeds on newer properties also not having been registered.
As such, 71point4 had to pound the pavement.
“To create a register of property owners we first had to go door to door to find out who lives in each property and to establish how they came to be there,” says 71point4 founder, Illana Melzer.
“We hired a team of 17 enumerators and trained them to collect information and capture supporting documents. Thankfully we can leverage smart phone to collect the data, but it still requires a significant effort. It took us two months to cover these areas,” Melzer adds.
Thankfully most of the tenants approached were also the original owners.
“Where the beneficiary no longer lives in the property, we are in the process of tracing the beneficiary to confirm information we have gathered on who owns the property. We will also be working closely with the City on a resolution process where ownership is disputed,” Melzer says.
Once this process is complete and the properties have been registered the process of getting an RDP house would be more formalised.
Without access to mortgages, buyers have to pay cash for a house, or use an expensive unsecured loan. There are also significant benefits to the City of Cape Town of being able to access an accurate and up-to-date record of property ownership. Without it, the City cannot collect revenue from households in the area who are not indigent nor can City departments facilitate building plan approvals.
There are also plans to expand this pilot to other areas.
“We are very pleased with the pilot results. We think the solution we have developed is scalable, and replicable,” chief executive officer of Seso Global, Daniel Bloch said in a statement.
“For the time being, property owners will record these transactions at the Transaction Support Centre, a walk-in housing advice office created by Centre for Affordable Housing Finance in Africa and 71point4 located in the area. But over time, we will record transactions through the Seso app,” Bloch concluded.
[Image – CC 0 Pixabay]