Ninety percent of Zimbabwe's urban properties untitled
AT least 90 percent of houses in Zimbabwe do not have title deeds, which means most homeowners cannot leverage on their properties in the event that they want to secure loans from the country’s banks.
The situation has been caused mainly by the fact that 23 of the country’s 32 major towns are situated on State land and therefore the respective local authorities cannot claim ownership of the properties.
As such, the local authorities have been unable to pass title to residents occupying the properties.
Zimbabwe is currently in sixes and sevens over the issue of property rights after the country’s 2000 land reform programme placed all listed farmlands in the country under the State.
This means that most people are missing out on trade in key markets such as the secondary mortgage market, which can provide new sources of capital by grouping loans from the primary mortgage market, where title deeds are securitised as mortgage-based securities.
Interestingly, the country’s Indigenisation and Economic Empowerment Act is essentially about securing at least 51 percent of the shares of every foreign-owned company and any other business for indigenous Zimbabweans.
Legal experts and economists have, however, long argued that in order for the economy to recover, property rights need to be respected because investors, both local and external, consider these issues before investing.
And many are questioning government’s sincerity in empowering its people when it has not been proactive by offloading thousands of houses across the country to sitting tenants and giving them title to the properties.
The country’s citizens have been so disenfranchised in terms of property rights that government this month, through the Ministry of Local Government, Public Works and Urban Development approved new rents for houses that were built 47 years ago in Kadoma using in Statutory Instrument 98 of 2015.
Under the new by-laws, affected Kadoma residents shall pay between US$7 and US$50 monthly rent for houses built as far back as 1968. Some of the rented houses, such as those referred to as Nissen and Chimney houses, have communal toilets.
In Chitungwiza, the country’s third largest urban settlement in terms of population, more that 50 000 houses are said to have no title deeds.
Zimbabwe Property Owners Trust (ZIPOT) chief executive officer, Paul Mangwana, told the Financial Gazette that it was worrying that many people were living in houses which were fundamentally not theirs because they did not possess title deeds of the properties.
“The most critical right is the right to property. People invested huge amounts building expensive houses on huge tracts of land, but they can’t use those properties to borrow from banks to expand into business and other venture because they have no title deeds to those properties. How can you buy a piece of land and not have title to it? It does not make sense. When a property is not title surveyed, it does not exist at law and then you go and build a mansion on a piece of land that does not exist,” said Mangwana, who created ZIPOT with the hope of helping people obtain title deeds to their properties, be it in towns or growth points.
“People have the misconception that getting title deeds is expensive, but it is not. The country should not even be struggling to get development finance because when a country is looking for development finance it can use a collection of its primary mortgages as secondary mortgage to borrow international finance. And Zimbabwe is denying itself that opportunity because it’s not allowing the use of development of the secondary mortgage market. We don’t even have a secondary mortgage market,” Mangwana noted.