This week past I came across an Assistant Registrar of Deeds poring over a case in which the presiding judge had a really unpleasant things to say about the Johannesburg Registrar of Deeds. This case, I believe, will lead to changes that will be made in our deeds registration procedure.
Three properties, belonging to an individual, were fraudulently transferred and two of these re-transferred to a third owner. Neither the preparer of the deeds nor the executor of these “before” the Registrar of Deeds, was a conveyancer. The conveyancing practice, to which the barcode on the fraudulent deeds was issued, did not employ the purported conveyancer and the rates certificate was fictitious. It is probable that the purchase price was never paid and so on.
The judge slated the Registrar of Deeds for not having checked that the preparer or executor of the deed was a conveyancer, for having missed obvious errors in the documentation and so on.
As an insider it is easy to understand how this came about: the case mentioned that some 2300 conveyancers are noted with the Registrar of Deeds Johannesburg as having been admitted as conveyancers. It is highly unlikely that even an experienced official would recognise all of these even if they appeared before him.
Furthermore, I know for a fact that the Pietermaritzburg Deeds Office does not keep a register of all South African conveyancers – it merely keeps a register of local conveyancers. Yet, deeds lodged in Pietermaritzburg, are prepared by conveyancers from all over the country. I very much doubt whether our local Deeds Office checks the status of preparers of deeds.
The ARD and I discussed this case and it is clear that the possibility for fraud is there: so-called local deeds would be less easy to tamper with as, in smaller deeds offices, the registrar or his assistant would generally know all those who appear before them. Even in smaller deeds offices, lodging conveyancers would, for instance, usually know who instructs them but would typically not be able to match the signature to the name for several reasons. If one could dupe the local attorney as to the legitimacy of his instructions, even lodging conveyancers could become unknowing participants in fraud.
Most powers of attorney to transfer provide for substitution of the persons authorised to execute the relevant deed: this is necessary as those who execute are often replaced by others in their temporary absence and so on. In larger deeds offices this could lead to abuse as, especially new staff, could hardly be expected to recognise all of the conveyancers who arrive on any day to execute, especially when these are stand-in’s for a regular signor who is absent.
I have little doubt that the following measures will be/should be instituted by the Deeds office:
- the practice of conveyancers executing deeds in the absence of a Registrar or his assistants should be discontinued and the rule that only conveyancers may enter the execution room must be enforced;
- the names of preparing conveyancers should be checked against national registers on examination;
- substituted executors of deeds should have to be proven (as is the case in Gauteng).
To my knowledge, lodging conveyancers have not yet reached the point where we insist on receiving, from any instructing firm, a list of those who would prepare deeds as well as specimen signatures, but I suspect that we may well come to this. If this were coupled to a provision for liability of the local conveyancer to confirm the legitimacy of the preparer, fraud like the one described above would be much harder to perpetrate.
One way of combating such fraud would be to insist that the list of executors of any deed at registration level should be part of the printed power of attorney and not typed in later, as is often done.
If this case interests you, ask me for a copy.
Daan Steenkamp Attorneys