Introduction – The Deeds Registries Amendment Act, 20 of 2024 will commence with certain chapter 3, 6, 12 and 13 provisions effective from the 1st of September 2025 – Supplementary proclamations 286 – Government Gazette 53274, amending the Electronic Deeds Registration Systems Act 19 of 2019.
These changes affect the Deeds Registries Act 47 of 1937 and updates the Electronic Deeds Registration Systems Act 19 of 2019 (“e-DRS Act”) primarily integrating further electronic processes and strengthening the legal electronic framework.
This is now an advancement on conveyancing compliance and is predicting digital environments void of fraud.
Changes to Legislation
Amendments to the Deeds Registries Act, 47 of 1937:
Section 3: Empowering the Registrars with the electronic processes.
Section 10: Amended to allow lodgement and examination of deeds via electronic format.
Section 102: The updating of definitions to include the terminology relating to electronic deeds.
Electronic Deeds Registration Systems Act, 19 of 2019:
Section 1: Definitions are amended to ensure consistency with the amended Deeds Registry Act.
Sections 5 & 7: Provisions surrounding system security, authentication and user access are strengthened.
Substitution of Sections 2, 3, 4 & 6:
- More Defined Ministerial Oversight.
- Increased Obligations of the Chief Registrar of Deeds.
- Explicit rules on the electronic preparation, lodgement, and registration of deeds electronically.
- Mandatory audit trails and system integrity of the deeds lodged electronically.
Long Title: Substituted to ensure that the electronic framework is of equal standing to the traditional legal system.
Consequences for Legal Practitioners
Conveyancers
Electronic deeds will progressively replace the traditional paper processes. For this, conveyancers will need to:
- Master the new technology which will provide increased efficiency in turnaround times.
- Secure their digital access credentials and ensure e-security protocols are adhered to.
- Understand that the scope of professional liability now includes negligent cyber security and professional liability in cyber-fraud.
Estate Agents, Bond Originators and Financial Institutions
Faster, more efficient turnaround times will be of great benefit to the clients, but practitioners will need to ensure that their compliance systems are integrated with the electronic framework. Institutions are likely to need to enhance internal risk management procedures to meet the changing realities.
The General Public
Clients will benefit from faster registration, and more transparent processes. Fraud risks will remain, but can be managed by practitioners implementing effective protective measures.
Case Study Examples
1. Interception of Banking Details
In multiple recent conveyancing transactions, email correspondence was fraudulently altered, replacing the firm trust account details with modified accounts. The clients ended up transferring funds to the fraudster instead of the attorney. With the new electronic system where banking details and the steps of transactions are verified through secure and trusted portals, the possibility of such interception is greatly minimized.
2. Lodgement Delays at the Deeds Office
In the past, transactions have been delayed because the final documents were set to be rejected because of trivial and small clerical mistakes. These types of errors would then lead to a mandatory in person re-lodgement. With electronic lodgement, errors can be detected and the re-checking and approval of procedures is somewhat automated. This lowers the period of time and costs to both the attorneys and clients.
3. Disputed Authority to Sign
In the past, cases of disputes have occurred where a party argues whether a signature for a power of attorney was real. With the use of advanced authentication methods, digital lodgement can assure conveyancers of advanced electronically signed documents with verified signatures that are more difficult to dispute and hold greater evidential weight in the case of disputes.
Forensic and Compliance Dimensions
As much as the risk of a cybercrime attack in property transactions is high, the Act seeks to improve the integrity of professional systems and places the burden of the safeguards on the practitioners. First steps include:
- Meeting FICA obligations when a party is having their identity verified remotely.
- Tracking POPIA standards for the storage and movements of client information.
- Carrying out internal audits and training employees to look for and report unusual and suspicious behaviour.
- Although fraudsters are quick to evolve, law firms need to integrate compliance within their routine processes, and not as an ancillary action.
Conclusion
With the enactment of the Deeds Registries Amendment Act of 2024, the Conveyancing practice has experienced a shift change which calls for all professionals in the property industry to change their ways. The case studies presented serve to illustrate the use and operation of electronic systems in the reduction of delays and elimination of fraud.
The future of electronic conveyancing is finally here.
By: Natascha Miller, LLB, BA [Forensics]
