Some of the tricks which include clients paying deposits to go on a waiting list for non-existent properties; double sales; identity theft; classifieds and fake power of attorney

Justice KL Nyakatawa

Identity theft involving deeds is a scam that has haunted the Zimbabwe real estate industry for a while, going by the numerous public media stories. Known by different nomenclatures, including ‘deed theft’, ‘deed fraud’, or ‘title theft’, this has become a cancer that requires urgent redress.

Ordinarily, the common enquiries around the title of property during conveyancing relate to land registry issues, unregistered properties, lost deeds, restrictive covenants, rights of way and/or other easements, etc, for which most jurisdictions provide laws governing these in terms of policy and processes.

However, and for some time now, disturbing stories of home seekers/owners duped by fraudsters in the industry have featured prominently in the Zimbabwean media.

These include fraudsters advertising and selling off absent landlords’ properties through fake title deeds and fraudulent.

Powers of Attorney

Regrettably, some of these illicit acts have been perpetrated in connivance with unscrupulous estate agents and land barons who sell unregistered areas, sometimes with the aid of Officers at the Deeds Registries Office.

In a published article Real Estate Fraud In Zimbabwe, Read This Before Buying Property (iharare.com), Mutape Nhachi identifies some of the tricks which include clients paying deposits to go on a waiting list for non-existent properties; double sales; identity theft; classifieds and fake power of attorney.

The protection of our houses and valuables against theft through elaborate anti-theft and/or security systems is almost second nature to us. But how do we fare in protecting ourselves against deed fraud?

A lot of advice exists in media, but this appears to be inadequate if the rise in these cases in Zimbabwe is anything to go by.

At an individual level, the advice is to check one’s title records, use registered agents and solicitors, and be generally vigilant, but with scammers getting more sophisticated and some agents getting more unscrupulous these measures might soon be redundant.

A common debate on the Leimen Limited property hub is whether digitization helps to reduce this scourge.

While it is certain that digitisation reduces appropriation risk, facilitates transactions in the property market, and improves third-party access to registry information, it is unclear if it also improves the quality of the underlying information and helps reduce fraud.

Perhaps it is time the real estate industry in Zimbabwe seriously deliberates on this matter with a view to lobbying the stakeholders (including Government and professional bodies) to seek an urgent redress before the vices associated with the industry begin to weigh down upon property as a safe asset class.

Buying Off-Plan Property: Blackhole or Goldmine Strategy?

Stories abound of people who have lost fortunes through buying property off-plan, just as there are of investors earning fortunes from this strategy.

Which is which, one might ask? Real or hearsay, this always boils down to the specific context of each story (including but not limited to) the old aged 5 ‘Ws’ of any inquiry: “What, Where, When, Who and Why?”.

The context matters because each project carries its own idiosyncrasies and cannot be replicated wholesome in different circumstances, which could be country-specific with their own property market dynamics.

Perhaps the best way to characterise this is to say off-plan can be very risky or extremely profitable.

To the uninitiated, buying off-plan simply means making a commitment to buy a property before it is completed, which means the property is sold ‘off the plan’, at a stage ranging between not built at all – to any stage before completion.

The off-plan period can span a long time, with off-plan deals ranging from unbuilt, half-built, or almost complete properties.

The main appeal of this strategy to investors is the opportunity to buy a property ‘below market value’ (BMV) through incentives and good deals. Also, the properties will be ready to-to-let, with a lot of developers offering a certain percentage yield, long leaseholds, and rent guarantees for stipulated years.

To the developers, it helps them with cashflow, de-risks their development to avoid unsold stock at the end of production cycle, and it stocks demand as sold units reassure potential clients there are in good company.

There is a lot of detail behind the foregoing which cannot be morphed into a brief write-up.

There are many other issues to address, including:

⦁ How the process works
⦁ Where and when to implement the strategy
⦁ How to profit from the strategy
⦁ Risks involved
⦁ Risk mitigation
⦁ Keys to success, etc

At Leimen Limited we created a platform for property education to help investors and would-be-investors in their property endeavours. It fosters synergies between the like-minded and is a one-stop shop for the experts in the property industry from across many countries.

Running under the theme “…together we go far”, we invite speakers on various strategies to educate our members.

To this end, we have invited an industry expert to help unpack some of these issues so the members may be enlightened. Please see the flier for further details.

The main appeal of this strategy to investors is the opportunity to buy a property ‘below market value’ (BMV) through incentives and good deals. Also, the properties will be ready to-to-let, with a lot of developers offering a certain percentage yield, long leaseholds, and rent guarantees for a stipulated period.

Justice KL Nyakatawa is Director at Leimen Limited

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