Fhumulani Denga,
CMS South Africa
Senior Associate, Real Estate and Conveyancing
In the not-too-distant past, if you were thinking about buying or renting residential or commercial property, you would open the weekend papers, browse the property section, get a sense of what was on the market, and reach out to the agency.
Today, searching for property looks nothing like it did in the early 2000s. Buyers and tenants search online first, where they can narrow down options, compare prices, view layouts and maps, and contact agents through the portal. Sellers do much the same, using digital platforms to position their properties, monitor demand, analyse interest and manage enquiries.
The digital progress has not been limited to the “front end” of the market either. Much of the work that happens after a property is bought, rented or built is now done virtually. Digital platforms now handle rent payments, arrears, maintenance requests, contractor appointments and access control. Energy use, water consumption and other operating costs can be tracked in real time across a building. Developers are modelling projects using current data rather than historic averages.
Yet, when ownership must change hands, property transfers require deeds to be drafted in a legally prescribed format, signed by hand in wet ink and lodged in person at the Deeds Office. And if the property is held in a trust or a deceased estate, the process stalls again until the Master’s Office issues the required authority.
New ways to own property
With new ownership models emerging, which aim to broaden ownership, fractional models, co-buying platforms, and shared-equity structures are opening the door to people, especially younger buyers, who do not easily meet the traditional financial thresholds for entry. Many of them want exposure to property but cannot take on the full cost of owning an entire asset.
For example, a fractional model might involve 10 investors buying defined shares in a commercial unit or a rental apartment. Each investor owns a percentage of the property, earns an equivalent share of the rental income and carries a proportionate share of costs. If one investor wants to exit, they sell only their share, not the entire property.
From a legal perspective, South African law already recognises this concept through the registration of undivided shares. Sections 17 and 26 of the Deeds Registries Act 47 of 1937 (DRA) permit land to be registered in the names of two or more persons in undivided shares, and ownership is only affected once registration has taken place in the Deeds Office in accordance with section 16. Section 56 further allows a mortgage bond to be registered over an undivided share in land, meaning that a co-owner may independently encumber their fractional interest.
If that investor wants to borrow against their shareholding, the bank must be able to register a bond over that fractional interest in a manner recognised by law. Without a legally enforceable structure that supports this type of ownership, the model falls apart the moment someone tries to raise finance.
But fractional ownership is not simply about divided equity. It involves ongoing responsibilities, voting rights, exit pathways and dispute processes. Another arises when the underlying property is held in a trust or forms part of an estate. In those cases, the conveyancer cannot proceed until the Master’s Office issues the necessary authority.
A digital interface still needs to be legally sound. Blockchain records and smart contracts are sometimes proposed as solutions. While they can improve transparency and automate certain tasks, ownership cannot be transferred through them, as a compliant deed must be lodged and registered.
Inside the buildings themselves, the switch to digital has been much smoother and quicker. Screening tools are standard, leases are generated automatically, and maintenance logs are updated in real time.
Property professionals now have greater visibility of their portfolios: screening tools support more consistent tenant assessments, standardised leases reduce room for error, and maintenance issues are logged and tracked automatically rather than disappearing into paperwork. AI is beginning to play a role too, sifting through large volumes of documents in seconds and highlighting what actually needs reviewing.
With such information at hand, proptech firms and property owners now sit with large quantities of personal and financial information and need to comply in accordance with the Protection of Personal Information Act (POPIA), which dictates how that information must be collected, secured and shared, especially for organisations that use cloud services, analytics or outside platforms.
If information is not handled lawfully, records may be questioned, decisions may be challenged, and regulatory consequences may result.
Where transactions stall
While the DRA provides the legal foundation for the registration and enforcement of rights in immovable property, the practical operation of the Deeds Office has not yet kept pace with technological developments. As a result, registration processes remain largely manual, document-driven and dependent on physical execution and lodgement. Deeds must still be prepared in the format required by the relevant deeds registries for successful registration.
The Electronic Communications and Transactions Act (ECTA) allows electronic signatures for most commercial transactions. Courts have upheld e-signatures for cancellations, financial agreements and even suretyships. But ECTA cannot override statutes that require specific execution formalities or the use of physical documents. Transfers of immovable property, mortgage bonds, notarial deeds and several instruments associated with estates and trusts remain outside its reach.
Many proptech companies seek legal advice only after launching and discover that compliance issues have arisen. By that stage, it is difficult, sometimes impossible, to adjust the model because these platforms touch ownership, payments, personal data, automated decisions and, in several cases, activities regulated by the Property Practitioners Act. None of these can be retrofitted easily.
A digital workflow must be designed with an understanding of where statutory processes take over, how rights will be enforced, what happens if the system fails, and where accountability for data and algorithms sits.
Legal input at the design stage is not intended to delay the process; it helps ensure these models withstand scrutiny from lenders, institutional investors, and regulators. Technology may draw users in, but legal certainty keeps the system working.
Closing the gap
Proptech has changed how we find, manage and understand property. But its next phase requires modernisation.
Until deeds registration and related statutory processes are modernised, the property sector will continue to operate on two systems: one fast and flexible, the other slow but fundamental.
The industry can keep improving the digital tools that make buying, selling and managing property easier. But deals still live or die in the Deeds Office. Until that system is modernised, proptech will always be running with one foot on the brake.
Read more on Rode Media – PROPERTY ANALYSIS and TREND REPORTS
