DUE DILLIGENCE OR VERIFICATION WHEN PURCHASING A PROPERTY WITH TITLE DEEDS
INTRODUCTION
One of the predominant and somewhat safer investments in Zimbabwe is Property Investment. Many Zimbabweans locally and abroad are purchasing property in Zimbabwe, be it for the basic need for shelter or to build a portfolio of properties as investment for the future. It is an open secret that the financial crisis in Zimbabwe has led many to not trust in Banking Institutions to invest and save their money. What many have chosen to do, is to lock their liquid currency in real estate, with the hope that should they ever find themselves illiquid, they can liquidate their real estate assets to attend to other needs. However, equally, many people have fallen victim to fraud by fraudsters masquerading as property owners. This article seeks to explore some of the standard due diligence and verification measures to assist people that are interested in purchasing properties in Zimbabwe.
TITLE DEEDS AND CESSION AGREEMENTS
Properties in Zimbabwe either have title deeds or Cession Agreements. Ownership, loosely put, in Zimbabwe can be proven by a production of either of these. In other words, where a person is selling a property, they have to be the owner of the property or have the authority from the owner to sell the said property. In other words, the purchaser ought to ask for the copies of either of those depending on the property in question. However, it is not enough for one to be shown a photocopy or an original title deed or cession agreement. One must investigate further to ensure that the document is not a forgery. Below, the article will explain a few steps one needs to take to verify the two documents, starting with a property that has a title deed. There will be a separate article that will deal with verification process for properties held under a Cession Agreement.
VERIFYING A PROPERTY HELD UNDER A TITLE DEED-IN STEPS
When you are seeking to purchase a property that you have seen being advertised or have been told is being sold, it is advisable that you do the following,
1. At your first meeting with the sellers, who claim to be owners, ask for the copy of their I.D document and also inspect the original and then request for the copy of the Title Deed that the property is held under.
2. Go to the Deeds Registry Office. There is one in Bulawayo and another in Harare. With that office, you conduct a Deeds search for the title deed. There is a prescribed fee that you pay to do the said search.
3. Once you have paid the prescribed fee, in their records room, you will be shown the existing current title deed at the said office. Verify that the copy you were given by the seller and the one at the Registry is the same.
4. Check the I.D number and names on the Deeds Registry Copy and compare with the copy of the I.D of the seller. The names and I.D number must be the same.
5. Check, and if you do not know how, the records room keeper may be able to assist, if there are any caveats, mortgage bonds or previous deeds of Sale endorsed on the Registry Title deed. These must be checked and verified, because for the sale to go through and for you to have transfer into your name there must be no encumbrances that prevent you from purchasing the said property. Loosely put, caveats, mortgage bonds and deeds of sale, are examples of encumbrances in favour of a third party that prevent any transfer to any other person from being done without the consent the third party right holder.
The above process may seem cumbersome, but it is necessary. It can be made easier if you as the purchaser were to engage a lawyer from the beginning. The Lawyer that you engage is called a conveyancer and is the specialised lawyer in dealing with property transfers. If you engage one from the beginning, he can do all the above verifications on your behalf.
There are instances, because of technological advancements, where fraudsters have improved their game, by having forged I.D Documents that look real. This has proven very difficult because the Registrar General’s office also has a variety of privacy concerns with giving out information from the national registry. If it was possible, and there has been conversation about this in recent years, there should be an avenue for Conveyancers to be able to verify the I.D documents of sellers to ensure that there is minimal risk of fraud by criminals. However, in the meanwhile, what can be done, I suppose, would be to ask that the seller also produce a passport, which expires every ten (10) years. One can compare the tendered I.D and the passport to check the similarities in terms of face and the actual face of the seller. This is to counter the challenge of I.D s that can have pictures that are way older, yet the looks of the person would have changed over the years. It is advisable, that this last verification can only be necessary where one has a strong suspicion that the person selling may not be who they profess to be.
Once the five steps listed above have been done, and the additional step, where necessary, has been done, you can then enter into an agreement of sale. There is no 100% full proof method to eliminate fraud, but the above can mitigate potential fraudsters from taking advantage of you.
