Reconstruction and Development Programme (RDP) houses are government-subsidised homes built to provide low-income South Africans with access to housing. Since the mid-1990s, millions of RDP houses have been allocated to qualifying beneficiaries. While these houses are not initially meant for sale, they can be bought and sold legally under certain conditions. This report explains the requirements, processes, and risks involved in buying an RDP house in South Africa.
What is an RDP House?
An RDP house is a government-subsidised property allocated to low-income households under the Department of Human Settlements. Beneficiaries do not pay for the house; instead, it is fully subsidised by the state.
Rules Governing the Sale of RDP Houses
8-Year Restriction Period
- An RDP house cannot be sold within the first 8 years of ownership.
- If the original beneficiary wishes to sell before 8 years, the property must be offered back to the Department of Human Settlements.
After 8 Years
- The beneficiary becomes the full legal owner (once the title deed is issued).
- The house can then be sold on the open market, subject to normal property transfer laws.
Title Deed Requirement
- A buyer can only legally purchase an RDP house if the seller has a title deed proving ownership.
- Without a title deed, the sale is illegal and cannot be registered at the Deeds Office.
How to Buy an RDP House Legally
Step 1: Verify Ownership
- Ask the seller to provide a copy of the title deed.
- Confirm ownership through the Deeds Office search (done by a conveyancing attorney).
Step 2: Check the 8-Year Restriction
- Ensure the seller has owned the property for at least 8 years.
- If less than 8 years, the sale must go through the Department of Human Settlements.
Step 3: Sign a Sale Agreement
- Draft a legally binding offer to purchase.
- Engage a conveyancer (property attorney) to handle the transaction.
Step 4: Pay the Purchase Price
- RDP houses are often more affordable than private homes, but prices vary by location and condition.
- Payment can be made via cash, home loan (if the property meets bank criteria), or other finance options.
Step 5: Transfer of Ownership
- The conveyancer lodges transfer documents with the Deeds Office.
- Once registered, you become the legal owner with your name on the title deed.
Risks of Buying RDP Houses
- Illegal Sales: Many RDP houses are sold informally without title deeds, leaving buyers with no legal ownership rights.
- Fraud: Scammers may pretend to sell RDP houses they do not own.
- Occupancy Disputes: Some properties may still be occupied by tenants or extended family members of the beneficiary.
- Unfinished Title Deeds: Some original owners never collected their title deeds, complicating the resale process.
Advantages of Buying an RDP House
- Affordability: Prices are usually much lower than private market properties.
- Access to Established Areas: Many RDP projects are in growing urban or peri-urban locations with improving infrastructure.
- Full Ownership: Once transferred legally, you become the registered owner with the same rights as any other property owner.
Recommendations for Buyers
- Always use a conveyancer to handle the transfer.
- Verify ownership at the Deeds Office before paying any money.
- Avoid informal agreements or “handshake” deals without a title deed.
- Check municipal accounts (rates, electricity, water) to ensure there are no hidden arrears.
- Consult Human Settlements if buying a house less than 8 years old.
8. Conclusion
Buying an RDP house in South Africa is possible, but it requires careful attention to legal requirements, ownership verification, and transfer processes. The key to a safe purchase is ensuring the seller holds a valid title deed and has met the 8-year ownership requirement. When approached properly, purchasing an RDP house can be an affordable entry point into the property market, offering both security of tenure and long-term investment potential.