The government will introduce strict verification mechanisms to control the ownership of residential land in informal urban areas.
The director for land reform and resettlement, Peter Nangolo, said the government will not allow people to own more than one primary residential property in the high-density urban areas under the new flexible land tenure scheme.
He made these remarks on Monday when he announced that the government had started implementing the flexible land tenure scheme in urban areas.
The scheme was introduced after recommendations of the second national land conference last year, which directed the government to implement the Flexible Land Tenure Act No 4 of 2012, aimed at providing secure land rights to people living in informal settlements.
The scheme is aimed at formalising the informal settlements to provide security of tenure to residents.
According to Nangolo, the scheme will create two land titles, which will enable people in informal settlements to acquire loans from banks to build their houses.
These are the starter title and the landhold title. The two land titles can be transformed into a freehold title, provided all the families living within a block of erven agree to the upgrade.
The meeting was also meant to provide the banks with information on the creditworthiness of the scheme, and of the liquidity of the titles.
Nangolo said the scheme was being implemented at four informal settlements of Onyika and Freedom Land B, both in Windhoek; Onawa at Oshakati; and Freedom Square at Gobabis as a pilot project.
He said if the project succeeds, the ministry will roll out the project to all local authorities in the country.
Although the proposed scheme is aimed at benefiting low-income-earners and people with no formal employment, The Namibian reported this year that there were some people who owned houses under freehold titles in the upmarket suburbs of Windhoek, and also owned structures in informal settlements.
Windhoek mayor Muesee Kazapua told a meeting at State House this year that the municipality has records of some “so-called elites” who owned shacks, and have people renting them.
Nangolo said the ministry will ensure that people do not benefit from the scheme more than once, adding that people owning property under the freehold system are ineligible to benefit from the new scheme.
“Land in the informal settlements does not belong to individuals. You are there informally, you are there with nobody’s permission; the land belongs to the local authority. You just erected a structure there.”
“We will simply ask you to leave because it is not your land. We want to give this land to people who, after strict verification, are found not to have any other residential property elsewhere,” he stressed.
Representatives of several financial institutions who attended the briefing, however, raised concerns over the risks they might be exposed to through lending money to beneficiaries of the scheme.
Standard Bank’s head of property valuation, Fannie Bernard Jasi-Kanyemba, said banks need security that if beneficiaries fail to pay back the loans, the bank can take the land as collateral.
However, in this case, the land remains the property of the local authority, unless it is upgraded to freehold title status.
“For us to be able to finance the houses, some of the land needs to be serviced and be used as collateral because the bank is basically taking a risk, and the beneficiaries need to meet certain criteria to qualify.
“Be that as it may, we are quite mindful that some of these people do not even have an income or formal employment,” Jasi-Kanyemba added.
A representative of Nedbank Namibia, who refused to be identified, said it was a big risk for banks to finance houses under the scheme, given the changes in High Court rules that prohibit banks from foreclosing primary residential property as the first option to recover debt if people default on loans.
“We don’t want to foreclose people’s properties. All these properties would be used as primary residences. Nobody wants foreclosures on them. We are saying we have given people title, but that is not the only thing banks consider when lending people money,” the representative stated.