Deeds Office registers only few leaseholds

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Staff Reporter

Windhoek-Only a handful of leaseholds out of nearly 5,000 resettlement farmers are registered at the Deeds Office while already enjoying the privileges of the resettlement programme.

A Legal Assistance Centre (LAC) case study notes remarkably slow process in issuing and registering leaseholds to use resettlement land as collateral for loans. The internationally funded study by the LAC in cooperation with the Namibia University of Science and Technology (NUST) under the theme ‘Leasehold as a vehicle for economic Development’ was released last week. The study mainly concentrates on the resettlement and small-scale farmers in the Oshikoto Region as this region is the most represented region in the country with regard to resettlement farms, Affirmative Action Loan Scheme (AALS) farms as well as small-scale farmers in the communal area. The objective of the study was to give inputs for a policy framework with regard to leasehold for especially resettlement farmers.

According to the study the aim of the leasehold should be to comply with the basic principles of lease agreements in national context, and it furthermore should enable the holders thereof to take part in the mainstream of the economy and should be transferable.

The process and the requirements for registration are relatively straightforward and transparent thus the study found that it should not be too difficult to register these leaseholds in a relatively short time frame.

“The absence of land rental markets results in financial institutions not accepting registered leasehold as collateral for loans. It also prevents beneficiaries from accumulating livestock beyond a certain threshold, thus making it impossible to reach the livestock numbers needed to qualify for an AALS loan. Without the ability to trade lease agreements, such agreements have no economic value, but serve mainly to regulate the relationship between the state and the beneficiaries,” the study reads.

The report further expresses concern that the subdivision of farms in the resettlement programme does not comply with the Act of Subdivision of Agricultural Land, Act No. 70 of 1970. It raises the question of “whether the present system of doing business is appropriate for smallholders”. It also notes that the low registration figures should be of concern to policymakers and implementers as they raise a number of questions which require critical analysis.

In the 2009/10 financial year, for example, 160 lease agreements were signed and issued to beneficiaries “as a form of security”. In the following year the number declined dramatically to only 19 lease agreements issued with 28 pending.

In 2012/13 the number rose again to 26 lease agreements. By mid-2016 a total of 264 lease agreements had been signed across the regions. The only reason for the refusal of beneficiaries to sign lease agreements with the then Ministry of Land and Resettlement (MLR), now Ministry of Land Reform, was that they “demanded that the infrastructure be fixed first”.

The registration of leaseholds in the Deeds Office was even slower, with only six lease agreements over land allocated by April 2016. No mortgages were registered over these leases. This is a very low figure, bearing in mind that the MLR has resettled more than 5,000 beneficiaries. During the 2013/14 financial year, “the total number of 11 lease agreements were handed over to the Notary Public through the Attorney General’s Office for preparation and lodging in the Deeds Office”.

The actual number of lease agreements issued and registered does not approximate the targets set for the strategic planning period 2013-2017. Over this period the MLR intended to grant a total of 620 notarial lease agreements.

The findings suggest two major reasons for the lack of registration of leaseholds. Firstly, there seems to be a general lack of information about the process and requirements for registration among beneficiaries, implementing agencies and financial institutions. The second reason relates to financial, technical and other capabilities of the beneficiaries as well as the economic potential of the parcels, rather than the leasehold registration process itself, the report concludes.

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