NewZimbabwe.com has invited Mr. Vengai Madzima, the Senior Partner at Madzima Chidyausiku Museta Legal Practitioners (MCM Legal) to discuss with us legal issues that affect Zimbabweans living in the diaspora. The discussions are general and those seeking specific legal advice should contact their lawyer.
Reporter: Welcome back Mr. Madzima, this week we want to address another factor affecting diasporans when purchasing property in Zimbabwe. We have seen reports on double sales of property or worse, sale of properties that do not exist in Zimbabwe.
VM: Thank you for having me. The issue of buyers being fleeced of their hard – earned money in property transactions is topical and must be addressed and mitigated.
Reporter: Is it safe to buy properties in Zimbabwe where diasporans have been fleeced of their money?
VM: There are institutions, systems and service providers in place whose responsibilities are to safeguard the general public from purchasing fraudulent property. The background to some of these fraudulent property sales is an omission by would be buyers to do the necessary due diligence processes that registered real estate agents and lawyers carry out when consummating a property transaction. Common cases involve having family members who have no background in real estate taking lead in property transactions on behalf of the diaspora relative. Our obsession with saving money is the main cause of these unfortunate transactions.
Reporter: How can the buyer in the diaspora safeguard himself when purchasing a property in Zimbabwe.
VM: The potential buyer must ensure that the targeted property is being sold through a registered estate agent. Verification on whether or not an estate agent is registered is done with the Estate Agents Council of Zimbabwe. The Council manages a compensation fund that is intended to protect the buyer should a transaction conducted by a registered estate agent turn out to be fraudulent. The real problem is that there are people claiming to be agents and who go and conclude property sale transactions while not being registered with the Council. This creates a problem as there is nowhere to go should the transaction go awry. It is also encouraged that a buyer engages their lawyer to supervise a purchase transaction, example, doing the necessary due diligence. In fact, in all property transactions, it is prudent that each party has his or her own lawyer securing their interest.
Reporter: What is involved in the due diligence process?
VM: To start with, it must be established whether or not the property in question has title deeds or is under cession. Cession is an agreement of sale with the Local Government, City or Rural District Council or developer. Title Deeds and Cession agreements require different approaches.
Reporter: What due diligence processes are involved where there are title deeds?
VM: I will give a short brief though it is not exhaustive. The buyer should request the original title deed for verification. Where a subdivision is involved, the corresponding subdivision permits, diagrams and compliance certificates. To guard against identity theft, physical inspection of the identity documents of the Sellers is necessary before getting certified copies. Where in doubt of the identity documents, further proof of identity is required for verification. A deed search is then conducted at the Deeds Office to verify the title deeds. The deed search will show you all issues affecting the deed that may limit the enjoyment of rights or transfer, for example a mortgage or servitude. On satisfaction that the paperwork is legitimate and the property exists in the form advertised or sold the potential buyer can proceed with the other formalities of the sale.
Reporter: Are there other processes that may be required for properties with title deeds?
VM: Circumstances that motivate sales are different and some may require additional processes to establish the authenticity of the transaction. For some transactions, it is necessary to do a Master’s Office search to establish if the Seller is not deceased. In the same vein, if the Seller is an Estate, a search to establish whether the person selling is authorized by the Master to sell the property. Children do not have the capacity to enter into contracts so if the property is registered in the name of a child, you are then required to establish that the person signing on behalf of the child is duly authorized to do so in terms of our laws. In some situations, a search at the Surveyor General’s office is necessary to establish the legal description of the property.
Reporter: Sounds a bit complicated!
VM: The transaction must be looked at from its value. Where a person is spending a substantial amount of money to invest, it is only logical that all that needs to be done, is done, to ensure that the investment is safe.
Reporter: Is the process the same for Cessions?
VM: The end is the same, however, it is important to establish from the beginning whether it’s a Local government, Council or developer cession. It is advisable for the first 2 that all agreements are done at their office. If it is a developer’s cession, you should request for the deed of grant or copy of their proof of ownership. Other documents you can request for are the subdivision permit, development permit, dispensation certificate, endowment certificate and certificate of compliance. These certificates are issued at different stages of the development.
Reporter: What if the sale is from a Seller who bought from a developer?
VM: It is important that the transaction is completed with the knowledge of the developer. You may need to satisfy yourself of the legitimacy of the development by verifying the documents as said before. What is critical is that there is a direct agreement between yourself and the developer or local Authority.
Reporter: Thank you Mr. Madzima we have run out of time.
VM: Thank you
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Vengai Madzima is a Senior Partner at Madzima Chidyausiku Museta Legal Practitioners (MCM Legal) in Zimbabwe and can be contacted at vengai@mcmlegal.co.zw
NewZimbabwe.com will have another discussion on legal issues affecting our readers in the diaspora next week, share your comments and experiences with us.