SADJSADJS o u t h A f r i c a n D e e d s J o u r n a lS o u t h A f r i c a n D e e d s J o u r n a l

March 2007 • Issue No. 11

Encroachment of Section 25 Rights

New deeds registry in Nelspruit

Check-List for Extension of a Sectional Title Scheme

Application of Section 4(1)(b) of the Deeds Registries Act 47 of 1937

Capacity of a Rehabilitated Insolvent to Deal with Immovable Property

land affairsDepartment:Land AffairsREPUBLIC OF SOUTH AFRICA

Although 2007 is already threemonths old, this issue still carriesvaluable news from 2006, whichreaders will no doubt find very interesting.

Many of the articles published in our previous editions havereceived responses from Thabo Nqhome, a conveyancer fromGauteng. The views from the private sector are highlyappreciated and make for useful reading.

This issue is jam-packed with a variety of articles and events;however, readers are urged to continue contributing to thesuccess of this fast growing journal.

The article which the editorial committee deemed to be the bestarticle of the October 2006 edition is the article on Acceptabilityof a Notarial Agreement to Extend the Duration of a Section 25Real Right by Zandre Lombaard.

Congratulations.

ALLEN WEST – EDITOR

Contributions may be sent to the Editor:Via e-mail or postallenW@justcol.org.zaA S WestPrivate Bag X659PRETORIA0001

The newsletter is also published in the Department of LandAffairs’ website: www.dla.pwv.gov.za

CONTRIBUTORS:A S West W HamerA Lombaard S MekweC de Jager W BhuqaG Tsotetsi G Hattingh

COVER PHOTO:Taken by Gert Hattingh and his views thereof are as follows:

“A flaw in the title”

Some of the very first things I remember when I joined the Deeds Registry in KingWilliam’s Town in July 1970 was a little man with gray hair (Mr. R M Jones), anda little framed picture hanging in his office, called “A flaw in the title”.The image in the picture, and what it represents, is indelibly imprinted in my mindand will remain so forever. When wise men originally said that a picture speaks athousand words, I’m convinced they were talking about this very picture.

When you look at the body language of the subjects, for example, you just know

that there is a major problem with the deed lying on the table. All the “main” guys

in the office are there, and they are trying to figure out what to do, but a solution

does not appear imminent.

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Contents Editorial

EDITORIAL COMMITTEEAllen West - Deeds Training (Editor)Alwyn van Jaarsveld - UmtataGert Hattingh - Office of the Chief Registrar of DeedsJoanne Dusterhoft - King William’s TownTebogo Monnanyana - BloemfonteinMagda Deetlefs - VryburgHennie Geldenhuys - Office of the Chief Registrar of DeedsLood Vosloo - Cape TownPogiso Mesefo - PretoriaZandré Lombaard - Deeds Training (Scribe)Dorethea Samaai - Directorate: CommunicationMarie Grovè - Deeds TrainingElizabeth Govender - PietermaritzburgAlan Stephen - JohannesburgLevina Smit - KimberleyGeorge Tsotetsi - Office of the Chief Registrar of DeedsGustav Radloff - Conveyancer, MacRobert Inc.Karen Momberg - Office of the SurveyorGeneral, PretoriaAndré Schoeman - Office of the Surveyor-General, Pretoria

Editorial i

News• Conference on Communal Land Rights Act 2004 (Act No 11 of 2004) 14• The Registrar of Deeds of Pretoria Puts His Foot Down 21• Decentralized Level VII – Course 11 to 15 September 2006 24• Third-Generation Sectional Title Conference 25• Conference on the Role of Traditional Leadership and Local

Government 27

Property Law Update• Foreign currency in the Deeds Registry 1• Capacity of a Rehabilitated Insolvent to Deal with Immovable Property 2• Real Right of Extension Concerns 4• Check-List for Extension of a Sectional Title Scheme 8• Phased Mortgages 9• The Requirements with which a Sectional Mortgage Bond

Must Comply in order to be Registrable 9• Encroachment of Section 25 Rights 10• The Extending Clause and Registrars’ Conference

Resolution 58 of 1965 11• Application of Section 4(1)(b) of the Deeds Registries Act 47 of

1937 and the Intricacies Involved 12• Statute of the Hague Conference on Private International Law 19• Lodgement of Electrical Certificates 24

Case Law• All the cases you must take note of 21

Books• Sectional Titles on Tap 37

Other features• Interview with the Registrar of Deeds for Mpumalanga 16• Letters to the Editor 29

DISCLAIMERThe views expressed in the articles published in this journal do not bind theDepartment of Land Affairs and the Chief Registrar of Deeds. The ChiefRegistrar of Deeds does not necessarily agree with the views of thecontributors.

HOW TO SUBSCRIBEAnybody who would like to be placed on the mailing list for the SADJ mustsubmit their postal address to marieG@justcol.org.za

1

From time to time, foreign investors may wish tosecure loans made to South African property

owners by means of mortgage bonds registered in oneof our Deeds Registries. In some cases, these lendersmay require, or even insist that, for whatever reason,the mortgage bond should reflect the amount of theloan in a format with which they are familiar, i.e. aforeign currency of their choice.

Similarly, a transaction for the purchase of a SouthAfrican land parcel by a foreign national may beconcluded in a foreign currency. Again, the transfereemay insist that the purchase price of the immovableproperty be disclosed in the deed of transfer in suchforeign currency.

Registrars of Deeds have never raised any materialobjection to the disclosure of a foreign currency indeeds and over the years many of these deeds haveindeed been registered.

With increased opportunities for foreign investment inSouth Africa over recent years, and given the securitythat our registration system provides the investor, wecould in fact see an increase in the number of theseforeign deeds presented at our Deeds Registries.

However, there have been some additional factors tobe considered during the registration process of thesetransactions. First of all, before the payment of stampduty on mortgage bonds was abolished, the amount ofstamp duty payable could not be assessed in SouthAfrican Rand (hereafter referred to as ZAR), withoutan accurate indication of the relationship, at the time ofregistration, between the foreign currency and theZAR, i.e. the exchange rate.

To facilitate the calculation of stamp duty, a practicewas introduced whereby the lodging conveyancerwould obtain documentary proof of the exchange ratefrom a recognized financial institution and submit it tothe Deeds Registry.

From the Registrar’s perspective, the exchange ratecertificate should ideally be issued on the day ofexecution. However, for practical reasons, this may notalways be possible. Conveyancers have neverthelessalways tried to obtain the certificate as close aspossible to date of execution.

With the inception of the Deeds Registration TradingAccount, Registrars of Deeds used the exchange rate

certificate both to calculatestamp duty and accurately deter-mine the applicable tariffprescribed in the Schedule ofDeeds of Office. Consequently, and despite theabolition of stamp duty, the exchange rate certificate isstill required to this day in respect of every transactionin which the registration fee is based on a monetaryvalue disclosed in the deed.

Logic would suggest a practice whereby examinerswould raise a note on the deed along the followinglines: Submit certificate of exchange rate to Registrarof Deeds at execution. In Deeds Registry parlance,this is a so-called B/E (before execution) note.

In the case of a mortgage bond, examiners willdisclose the foreign currency in the bond endorsementon the title(s). This would be the more logicalapproach, especially in view of the fact that the partiesspecified the disclosure of the foreign currency in thedeed itself.

The examiners would not complete the feesendorsement, however.Instead, they must affix a redsticker in a conspicuous position on the front cover ofthe deed and write the words B/E Note in bold acrossit. The note itself must remain open right untilexecution, when the Registrar of Deeds will receivethe certificate from the conveyancer. S/he will file thecertificate as a supporting document with the deed,calculate the correct registration fee and complete thefees endorsement.

During the data capture process, when electronic“billing” of the conveyancer’s account takes place, thedata capturer simply has to follow the feesendorsement in the normal manner.

Currently the Deeds Registration System software(DRS), caters only for ZAR. All monetary figures areentered using only the numeric characters, as thesystem automatically defaults to the South Africancurrency symbol, R. The reason for this is simple – allfinancial statistics compiled from the DRS databasewould be inaccurate unless they are based on a singlecurrency.

Registrars of Deeds are obliged to calculateregistration fees correctly. By employing the practiceoutlined above, s/he can be assured that everythingpossible is done to achieve this.

Foreign currency in the Deeds RegistryBy: G Hattingh

Office of the Chief Registrar of Deeds

Conveyancers and examiners should takecognizance of the fact that even though an

insolvent has been rehabilitated, a right to propertyacquired by such a rehabilitated insolvent prior to, orduring, his or her insolvency, continues to vest in thetrustee despite the rehabilitation (see section 25 of theInsolvency Act 24 of 1936). However, this does notapply to automatic rehabilitations in terms of section127A of the Insolvency Act (see discussion infra).

Section 20 of the Insolvency Act provides that as soonas the estate of an insolvent has been sequestrated,such an insolvent is divested of the estate which isthen vested in the Master and, on appointment of atrustee, in such a trustee (see also the definition ofowner in section 102 of the Deeds Registries Act 47 of1937).

In terms of section 21 of the Insolvency Act, theproperty of a spouse whose estate has not beensequestrated shall also vest in the Master and, onappointment of the trustee, in the name of suchtrustee, as if it were property of the sequestratedestate. In practice the same interdict noted against theinsolvent will also be noted against the spouse andhe/she will not be capable of dealing with such assetsuntil such time as the trustee has released suchproperty from the insolvent estate. In terms of section21(13) of the Insolvency Act “spouse” means not onlya wife or a husband in the legal sense, but also a wifeor husband by virtue of a marriage according to law orcustom and also a woman living with a man as his wifeor vice versa.

The registrar of deeds will thus disallow dealings bythe insolvent of any property registered in the name ofinsolvent or that of his/her spouse. This applies, asalready stated, to any property acquired duringinsolvency or prior to insolvency.

As regards property of the “spouse”, such propertymust be released by the trustee before any dealingsby the spouse with such property can take place (seesection 21 of the Insolvency Act). This is not applicableto spouses married in community of property, as thejoint estate is declared insolvent.Thus both spousesare insolvent and both must be rehabilitated before re-acquiring the capacity to act.

A registrar of deeds will allow an insolvent to deal withproperty acquired during insolvency, provided the“disclaimer” or consent by the trustee is lodged, whichconsent must be signed by the trustee, declaring thatsuch trustee lays no claim to the property acquiredwith consent and that such property may be freelydealt with by the insolvent.

There are three manners in which a former insolventcan be re-invested with immovable property whichformerly vested in the trustee. Each will now beperused more closely.

Automatic rehabilitation by effluxion oftime in terms of section 127A

Any insolvent not rehabilitated by the court within aperiod of ten years from the date of sequestration ofhis/her estate will be deemed to be automaticallyrehabilitated after the expiry of that period (section127A of the Insolvency Act).

Prior to the amendment of the Insolvency Act by theInsolvency Amendment Act 122 of 1993, theprovisions of section 58 also applied to automaticrehabilitations after 10 years. However, the said Actamended section 25 and 127A of the Insolvency Act aswell as section 3(1) and 58 of the Deeds RegistriesAct. In terms of section 3(1)(x) of the Deeds RegistriesAct, the registrar of deeds will remove from his/herrecords any sequestration order after the elapse of tenyears. No act of registration in the deeds registry isrequired to revest the insolvent or his/her spouse withimmovable property.

Offer of composition

The estate of an insolvent remains vested in thetrustee, subject to the provisions of section 127A, untilthe insolvent is re-invested therewith pursuant to anoffer of composition, as provided for in section 119 ofthe Insolvency Act. Property which before rehabili-tation vested in the trustee for the purposes ofrealization and distribution remains vested in thetrustee, unless an order is made in terms of section129(2) read with section 124(3) of the Insolvency Act,which has the effect of revesting the insolvent withhis/her whole estate.

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Capacity of a rehabilitated insolvent todeal with immovable property

By: Allen WestDeeds Training, Pretoria

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At the onset it must be understood that property of theinsolvent, although vested in the trustee, is neverformally transferred to the trustee, nor are title deedsin the name of the insolvent endorsed as regards suchvesting.

In the conveyance of property acquired by anunrehabilitated insolvent, no reference to theinsolvency is allowed to appear in the description ofsuch a person. The reason for this is firstly becauseproperty can be reinvested in an unrehabilitatedinsolvent by acceptance of an offer of composition,and secondly because the stigma of insolvency shouldnot be allowed to attach to any person permanently,for instance after rehabilitation, when the rehabilitationorder may declare such property to be legally vestedin the former insolvent.

In terms of section 119 of the Insolvency Act, an offerof composition accepted by the creditors containing aprovision that property of the unrehabilitated insolventis to be restored to him/her has the effect of divestingthe trustee of the property and reinvesting the solventtherewith. Section 58(2) of the Deeds Registries Actthereupon provides the procedure to be followed asregards the titles of such property. The registrar mustmake an endorsement thereon before theinsolvent can deal with such property.

The following documents must be lodged with theregistrar before he will make the endorsement:

(i) An application by either the trustee or theinsolvent for the endorsement in terms of section58(2) of the Deeds Registries Act of the titleslisted therein to the effect that the propertydescribed therein has been restored to theinsolvent.

(ii) A certified copy of the offer of compositionaccepted by the creditors, i.e. certified by theMaster. The copy or certification must confirmthat it was accepted by the creditors, oralternatively this can be proved by lodging acertified copy of the resolution of creditorsaccepting it.

(iii) In some Deeds Registries, a certificate from theMaster that the offer of composition has beenaccepted by the Master (see section 119(7) ofthe Insolvency Act).

Where the property is mortgaged, the bonds need notbe endorsed or lodged (see ex parte Vels 1921 OPD171).

Rehabilitation by court

Where property has in fact vested in the trustee andwhere upon or after rehabilitation, both the trustee andcreditors, with full knowledge of the fact, lay no claimto it, the court, on rehabilitating the insolvent or afterrehabilitation, may make an order declaring therehabilitated insolvent entitled to the property,whereupon it is up to the trustee to transfer theproperty to the rehabilitated insolvent in terms ofsection 58(1) of the Deeds Registries Act. This sectionstates that immovable property vested in a trustee,which has not in terms of the law been revested in theinsolvent may, “whether before or after rehabilitation ofthe insolvent, be transferred only by the trustee, andmay not after such rehabilitation be transferred,mortgaged or otherwise dealt with by the insolventuntil it has been transferred to him by the trustee …..”If there is no trustee in existence, transfer may bepassed on a power of attorney signed by the Master(regulation 37).

It will be noted that the court, because of section 58(1),will not entertain an application to ‘revest’ property in arehabilitated insolvent. It may declare the rehabilitatedinsolvent ‘entitled’ to the property, whereupon thetrustee may transfer it to him in terms of section 58(1).Conveyancers, in view of the above, should be carefulhow they word their application to court.

Leading cases on these matters are Ex parte Gouws1950 (1) SA 486 (T), Ex parte Vorster 1958 (1) SA 91(C) and Ex parte Norton No 1958 (3) SA 120 (O),which readers are urged to read to obtain acomprehensive picture of rehabilitation orders.

This edition, as well asall previous editions of

the South African DeedsJournal, is currently

available on thefollowing website, under

publications:

http://land.pwv.gov.za

Background

The traditional position (until 1997)

A developer had to wait for his money until theregistration of the completed unit(s) in thepurchaser(s) name(s) had taken place.

• The Sectional Title Act made provision for theretention by a developer of the right to develop thecommon property in a sectional title scheme inphases for his/her benefit.

• On completion of the first phase, a Certificate ofReal Rights is issued in favour of the developer,simultaneously with the opening of the SectionalTitle Register.

• The Developer then completes further phases forhis own account on the common property and, aftercompletion of each phase, a Sectional Plan ofExtension is lodged in the Deeds Office, whereuponthe new units can be transferred to the purchasersthereof and a developer can at last receive his dueremuneration.

The current position (since 1997)

A developer can now be paid upon cession of the realrights even before construction of the unit on it.

• A developer is now entitled to “subdivide” his realright into portions (for each unit to be erected) andto sell and cede such portions of his real right toindividual purchasers thereof.

• Mortgage bonds can be registered over suchportions of real rights.

• The developer can now receive payment for suchreal right without first having to develop a unit on it.

Some of the major legal problems:

The purchaser does not know what a real right is

• Purchasers, estate agents and even developersbelieve that erven are being transferred and that,upon registration of the Right in the Deeds Office,

the purchaser becomes the owner of an erf, uponwhich he can develop the unit.

• Very few agreements contain an adequatedescription of what a real right entails.

These rights will lapse if not exercised timeously

• All these subdivided rights are subject to thedevelopment of the unit on them within the timechosen by the developer for completion of the totaldevelopment when he initially reserved the right todevelop upon opening of the Sectional TitleRegister.

• If the unit is not fully developed within this period,the real right will lapse and revert back to the bodycorporate.

Developers do not comply with the requirementsof the Section 25(2)(A) plan

• At the time of the reservation of the real right infavour of the developer, a plan must be lodged,describing all the buildings to be developed, theirsiting, extent and elevational treatment.

• Developers (purchasers) cannot deviate fromthese, as any owner is entitled to approach thecourt for an appropriate order in terms of section25(13) enforcing compliance with the original plan.

• The increase in the size of any unit requires aspecial resolution from the body corporate and inlieu of section 25(13) we believe that all otherholders of real rights should consent as well. Allbondholders must also grant consent, except wherethe deviation is less than 10%.

Purchase agreement shortfalls

• Agreements must contain an adequate descriptionof the limited nature of the real rights purchased.

• An owner of a real right only becomes a member ofthe body corporate upon conversion of his real rightinto a sectional title.

• Real right owners cannot vote, except where thebody corporate deals with the common property.

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Real right of extension concernsBy: Corrie de Jager

Attorney and Conveyancer, Snyman de Jager, PRETORIA

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• A real right owner has no legal duty to pay thestandard levies to the body corporate. Only uponcompletion of a unit is an owner of a real rightobliged to pay the standard levies. A real rightowner can at least be expected to pay a limitedcontribution similar to that paid by the developer(section 25(2)(e)).

Practical problems

Essential services

• Due to the vast majority of real right developmentsbeing on traditional farmland, there are very fewcontrol measures in respect of quality control overthe essential services.

• The registration of a real right can take placewithout any of the services being installed.

• A developer must provide the purchaser with fulldetails about the status of these services and onlyafter the individual portion of the common propertyaffected by the real rights has been fully serviced,ought registration thereof be allowed.

• The purchaser must be informed if there should beany guarantee by the developer in respect ofservices after installation.

• The services are to be fully compliant with relevantauthority requirements.

Developer to accept responsibility for completionof the unit

• Traditionally, a developer had to ensure thecompletion of the unit and, although the real rightmay now be ceded to a new purchaser, it stillremains a right to develop a sectional title unit on aspecified portion of the common property and not aright to own a portion of the land.

• The developer should remain responsible to thepurchaser of the right to ensure the completion ofthe unit and the conversion thereof to a fullsectional title.

• A substantial amount of the purchase price of thereal right should be held in retention until the dateof conversion of the real right into a sectional title.

Completion periods

• The developer must commit himself to installing theservices and completing the common facilitieswithin specified times.

• The new unit must be completed as soon as ispractically possible and time limits are essential.

• After completion of the unit(s), conversion tosectional title must be dealt with as a matter ofpriority.

Some solutions to rectify problemsexperienced with real right developments

New developments

• Obtain the recommended certificates from theprofessional team as prescribed by the bank. (Referto Clause 7.1 – 7.4 of Notice to Developers)

• Retain a sufficient retention amount untilconversion to sectional title.

• Ensure compliance with all the bank’s require-ments.

Existing developments

• Conduct a proper audit of the state of affairs and, ifnon-compliant, inform all owners and obtain theirco-operation to rectify.

• If required, lodge a new section 25(2)(a) plan and aparticipation quota schedule at the Deeds Officewith the consent of all owners.

• Approach the bank for assistance in rectifyingproblems.

Relevant sections of the Sectional TitlesAct

• Section 17 – Owners and holders of section 25 realrights to grant a unanimous resolution in dealingwith common property.

• Section 16 – Common property is owned by ownersof sections in proportion to quota.

• Section 32(3) – Quota of a section determines voteand levy payment.

• Section 32(4) – Developer may change votes andlevy payment liability of owner of a section.

• Annexure 8 Rule 62 – Owner of section has 1 vote.• Section 34 – Share of developer in buildings and

land (common property) is equal to total of quotasof sections owned by him.

• Section 36(2) – Developer (or successor in title)ceases to be a member of body corporate when heceases to have a share in common property.

• Section 37(1)(e) – Body corporate to raise leviesfrom owners in proportion to quotas of theirsections.

• Section 25(5A)(b) – Owner of real right to pay leviesto body corporate from date of completion of unit.

Notice to developers in respect ofsectional title schemes to be developedin phases by means of the reservation ofand subsequent cesssion of real rights

Developers are cautioned to study the provisions andimplications of the relevant legislation and require-ments of all authorities for any proposed real rightdevelopment carefully before commencing with such adevelopment.

Developers are welcome to approach the bank’sspecialist consultants for assistance in this regard asthere is much confusion and many pitfalls can beavoided.

Please take note of the following:• The total development must be completed and the

rights converted to sectional title within thestipulated time, failing which the rights are forfeitedto the body corporate and everything is lost! Itremains a “right” which will lapse if not exercised(developed) and converted from a right to asectional title unit (Section 25(6).

• The development must be done in strict accordancewith the Section 25(2)(a) plan initially lodged at the

Deeds Office at the time of opening the SectionalTitle Register. Purchasers of individual rightscannot build what they want where they want ontheir respective portions of the common property.Any other owner can upset the apple cart byobtaining a court order for proper compliance.(Section 25(13)). There is simply no way past thisrequirement.

• Banks will only finance the sale of real rights if it isa package deal, i.e., the developer must complete(or take responsibility for the completion of) thebuilding on the real right and the developer mustalso attend to the conversion of the real right tosectional title within the respective time frames asstipulated by the bank.

• Bank valuators will determine the retention amountto be retained until completion of the developmentand conversion to a sectional title register.

• Purchasers must be made aware of the nature ofthe real rights they purchase and for this purposethe agreement of sale must contain provisionsdealing with the time frames and consequences aswell as the limited nature of these rights, i.e.– No voting rights until conversion.– The levy payment obligation must also be

correctly addressed, as there is no obligation

www.jutalaw.co.za

R 9(

Excl. postage &

‘the most comprehensive publication in its class’

As the official manual for the deeds examiner in the deedsregistry, the manuals are an invaluable tool for anyoneworking in conveyancing.

The manuals come as a looseleaf publication with usefultables containing easy references to:

Case law LegislationChief Registrar’s CircularsRegistrars’ Conference Resolutions

A comprehensive index for the work will be issued early in2007 together with amendments resulting from the latestConference Resolutions.

••••

S Lefafa, Chief Registrar of Deeds in the Preface to Deeds Practice Manuals

Electronic version available February 2007 + links to head and fly notes of cases+ added relevant legislation+ selected Chief Registrar’s Circulars.

Tnuals provide

an extensive and modern survey of the entire field of deeds registration

practice and procedure.

Written and endorsed by Deeds Officepersonnel, the publication consists of four sections:

Conventional Deeds MattersNotarial Practice Matters Diverse Legislation Sectional Title Matters

While the relevant underlying legal principlesare addressed, the main focus is on specificprocedures, with numerous examplesof endorsements accompanied by theguidelines for deeds examiners.

••••

ENDORSED

7

incumbent on any real right owner to contributefully to the levy fund until after completion of theunit (Section 25 (5A)(b)).

– Any deviation in size (from the original plan) hasto be approved by the body corporate and wheresuch a deviation is more than 10%, every bondholder in the scheme must also consent to it. Thedeveloper cannot get carte blanche consent frompurchasers for future deviations.

– In the event of a real right development onfarmland with traditional “resort rights”, theDepartment of Agriculture (in terms of Act 70 of1970) may grant permission for a sectional titledevelopment subject to such resort rights. Underthese circumstances, purchasers must be madeaware of the 3-month occupancy restriction,which can have a major impact on prospectivepurchasers’ decision to buy.

• Due to the specialized nature of real rightdevelopments, banks will use their own panel ofattorneys to attend to the registration of mortgagebonds over real rights and developers and theirtransfer attorneys are welcome to approach themfor assistance.

• In addition to the standard conditions associatedwith the approval of finance the banks must also beprovided with the following certificates:– The certificate from an architect confirming that

the placing and elevational treatment of thebuildings comply with the section 25(2)(a) plan.

– A certificate from the engineer confirming that theservices were installed and comply with therelevant specifications of the SABS, NationalBuilding Regulations, Local Authority andNHBRC.

– The transfer attorney is to certify that no onerousconditions and restrictions are applicable andthat he is not aware of any requirements orcondition which may prejudice the bank ingranting finance.

– The town planner must certify that, from a townplanning perspective, all required consents havebeen obtained and the development complieswith all requirements pertaining to suchconsents.

Attached is a list of documents associated with realright developments to be provided to the banks.

Annexure

Documents to be provided prior to considerationof financing

1. Original scheme approval by local authorities (i.e.Act 70 of 1970, DFA, Ordinance 20/86 andconditions of establishment)

2. GDACE, EIA Compliance/Exemption (Record ofdecision),

3. Copy of Deed of Transfer4. Site Development Plan5. Layout Plan in terms of Section 25(2)(a)6. Sectional Plan7. Real Rights Layout Plan8. Certificate of real rights9. Deed of sale10. Building plans for unit on individual real rights to

be financed11. NHBRC registration and enrolment certificates12. Schedule of services installation and progress

report13. Services warranty and handover to local authority14. Building activity progress schedule15. Common facilities to be erected, value and

progress report in respect of clubhouse, enter-tainment areas, pool, clubhouse, guard home,entrance, perimeter fencing, etc

16. Total development cost schedule – landacquisition, essential services, facilities, con-struction

17. Building agreement (if not contained in deed ofsale)

Section 25Extension of schemes(1) A developer may … reserve the right to erect …

within a period stipulated a further building orbuilding.

(2) … the application … shall be accompanied by(a) a plan to scale of the building or buildings to

erected and on which(ii) the citing, height and covering of all

buildings(vi) the typical elevation treatment of all

buildings… are indicated

(c) a schedule of the estimated participationquotas of all the (future) sections in thescheme.

(6) … if a reservation … has lapsed, the right toerect a scheme … shall vest in the bodycorporate.

(13) A developer or his successor in title … shallbe obliged to erect … the building(s) … strictlyin accordance with the documents referred toin section 25(2) … and an owner of a unit inthe scheme who is prejudiced by his failure tocomply in this matter may apply to court,whereupon the Court may order propercompliance with the reservation …

Re-published with the permission of Ghost Digest and the author.

As with the previous edition of the Journal, it isenvisaged on an ongoing basis to provide a

check-list for practitioners and deeds office examinersfor certain acts of registration. In this edition, theextension of a sectional title scheme will be cateredfor. From the outset it must be made abundantly clearthat this is once again a mere guideline and should notbe regarded as the alpha and omega.

Before proceeding with a discussion of the documentsthat must be lodged at the deeds registry, it isimperative to determine the following:

Does the right exist?

First and foremost one has to determine from the titleof the real right whether the right has in fact beenreserved and, furthermore, whether the period forwhich the right was reserved has not as yet expired.However, in terms of RCR 1/1991, the intention is thatthe buildings must be erected and completed withinthe determined period. Should the determined periodhave expired and the buildings have been erected andcompleted within the said period, proof in this regardwill have to be submitted to the registrar of deedsconcerned. Where the right has already expired andbuildings have not been erected, the provisions ofSection 68 of the Deeds Registries Act 47 of 1937must be applied and the right created de novo (see inthis regard RCR 47/2005).

Is the extension within the boundaries ofthe reserved right?

Before proceeding with the examination or checking ofthe deeds and documents, one has to determinewhether the extension anticipated falls within the areaof the common property initially reserved. In terms ofRCR 10/2005, it is the duty of the Registrar todetermine whether the extension is within the physicalboundaries of the reserved right. This one would becapable of establishing by comparing the scale plan ofthe building or buildings to be erected as provided forin section 25(2)(a), filed on the main file, with thesectional plan of extension. Should the area notcoincide, the extension cannot be registered.

In terms of RCR 4/1994 and RCR 10/2005 and thecase of Knoetze v Saddlewood CC 2001 A11 SA 42

SE, it is not the duty of the registrar to determinewhether the buildings are in accordance with thebuilding plans, as changed circumstances can havean effect on the extension.

Lodgement covers

Should the above criteria have been met, the followingmust be lodged with the Registrar for the opening ofthe sectional title register for the phase development:

Lodgement Cover No 1 (Yellow Cover)*This cover will contain the sectional plan of extension,in duplicate.

Lodgement Cover No 2 (Yellow Cover)*• This cover will contain the application by the

developer/holder of the right drafted in accordancewith prescribed Form O.

• The certificate of real right of extension. (The title ofthe right of extension).

Lodgement Cover No 3 (Yellow Cover)*If the real right of extension is mortgaged, the bond,together with the consent of the bondholder for thedisposal of the bond, i.e. cancellation, substitution, etc.

Lodgement Cover No 4 (White Cover)This cover will contain the certificate of real rightissued to the developer of the exclusive use areasdepicted on the sectional plan of extension (if any).

Lodgement Cover No 5 and further (White Cover)This cover will contain the certificate of registeredsectional title in favour of the developer, as per thesectional plan of extension.

General

It must be noted that, should the developer wish toimpose conditions tying the units and exclusive useareas, this can be effected by virtue of a notarial tie-agreement once the body corporate has come intoexistence or it must be created on eventual transfer ofthe unit and the exclusive use are (see RCR 36/2004).

* In certain deeds registries, different colouredcovers are used.

8

Check-list for Extension of a Sectional Title Scheme interms of Section 25 of the Sectional Titles Act 95 of 1986

By: Allen WestDeeds Training, PRETORIA

9

Phased mortgagesBy: Warren Hamer

Buchanan Boyes Smith Thabata, CAPE TOWN

Phased developments of sectional title schemes arebecoming the norm rather than the exception.

Although beneficial to most parties, this can lead tosome registration difficulties. One of these is thefollowing: how does one mortgage both the unit in ascheme and the exclusive use area under one bondwhen the unit and exclusive use area are created inseparate phases?

Banks are adamant that both the unit and the exclusiveuse area should be tendered as security under the loanand rightly so. The apparent option would be to pass acollateral bond over the exclusive use area when it isregistered in the subsequent phase.

This does, however, create concerns as regards costs.On closer investigation of the costs involved, one areawas identified where costs could be cut – Deeds Officefees.

It appears that the current practice is for the DeedsOffice to charge fees on collateral bonds inaccordance with Item 8(b) of Regulation 84 of theDeeds Registries Act 47 of 1937. This means that afee of between R200 and R1000 can be charged onthe registration of collateral bonds, depending on theamount of the bond.

It could be argued that the Deeds Office should becharging fees on collateral and surety bonds inaccordance with Item 8(d) of Regulation 84. Thiswould be a mere R95.

The rationale behind this argument is that no “new”money is advanced under collateral and surety bonds.The amounts reflected in these bonds are merereferences to money already advanced under theprincipal bond. A collateral and surety bond shouldtherefore be classified as “Any other registration orannotation in the registers or records,” as set out inItem 8(d) of Regulation 84.

Further impetus for this argument can be taken fromthe stamp duties that were formerly payable on thesebonds – namely R5 for a collateral bond and 5 centsper R100 for a surety bond, as opposed to 20 centsper R100 for a normal bond.

Clarity on this practice would greatly assist conveyan-cers in determining the correct fees for their clients.

Re-published with permission from Ghost Digest.

The requirementswith which asectional mortgagebond must complyin order to beregistrable

By: George TsotetsiOffice of Chief Registrar of Deeds

Until recently, the require-ments with which a sectional

mortgage bond must comply inorder to be registrable have notbeen an issue that warrants anydebate. However, certain financialinstitutions have recently adaptedtheir Sectional Mortgage Forms inorder to cater for certain specificobjectives. These adaptations invariably relate toissues of whether the relevant bond is intended to bea collateral or a covering or a surety bond. Theseadaptations, regrettably, have resulted in rejections ina certain deeds registry. The primary reason for therejections has been that the relevant sectionalmortgage bond is not in conformity with Form Z of theSectional Titles Act.

The question that then arises is: when is a sectionalmortgage bond registrable?

In this regard, regulation 34 of the Sectional Titles Actis instructive. This regulation provides as follows:

“A sectional mortgage bond hypothecating a unitheld under a sectional title deed or an exclusive usearea or the right to extend a scheme held under acertificate of real right, shall be substantially in theform of Form Z in Annexure 1, and shall beprepared by a conveyancer and be signed by themortgagor, or his duly authorized agent, in thepresence of a conveyancer, and the said form shallbe suitably adapted when hypothecating land heldunder a sectional title deed or a registered notariallease or sub-lease or other registered real right.”

Developers should take care when extending ascheme in terms of section 25 of the Sectional

Titles Act 95 of 1986 (“the Act”) not to encroach uponthe rights of either the common property or the right ofextension held by another party.

Where a section has been built outside the areademarcated by the section 25(4)(b) plan, thedeveloper has three feasible options to resolve thepredicament:

Firstly, the developer can demolish the structure andrebuild it within the boundaries of the area depicted bythe Section 25(4)(b) plan. This is not necessarily apopular choice but he has two further options:

The options left to the developer depends on whoseright has been encroached upon. Where theencroachment is on a section 25 right held by a thirdparty, the encroaching developer will have to acquirethe right to the area of encroachment from such thirdparty. The Act does not permit the Registrar to registera servitude of encroachment over a section 25 right ofextension; therefore the acquisition of the encroach-ment area must be registered by means of a notarialdeed of cession. This must be accompanied by adiagram in terms of section 25(4)(b) for the areaceded. As this is an acquisition of a right, there will betransfer duty implications.

When the developer registers the conversion of hisright to extend the scheme to sectional title ownershipin terms of section 25(9), both titles to his section 25right must be lodged with the deeds registry. Theconversion of the right will be registered against bothof these titles. Where the right is extinguished byexhaustion of the right, the developer must apply for

noting of the lapsing of this right in terms of section68(1) of the Deeds Registries Act 47 of 1937.

The developer will be entitled to reserve rights ofexclusive use for his own account for the entire areadepicted by the section 25(4)(b) plan, even if such anexclusive use area is not depicted on the section25(2)(a)+(b) architect’s plan.

The provisions of section 27A and 27(1A) only apply toareas outside the area depicted on the section25(4)(b) plan. The initial section 25 reservation givesthe developer a statutory right to reserve rights ofexclusive use within the section 25(4)(b) area. As fordeviations from the section 25(2)(a) and (b) architectsplan, the court held in Knoetze v Saddlewood CC[2001] 1 A11 SA 42 (SE) that section 25(13) isprimarily created to favour the developer, and providesthe developer with a great deal of leeway when itcomes to building the section.

The wording of the Act is very general as to therequirements that necessitate variation. “Imprac-ticable” and “changed circumstances” are very broadconcepts. An owner who approaches the court toenforce strict compliance with the section 25(2)(a) and(b) plans will have to have a very strong case to proveprejudice.

The third option is the most arduous one. This is wherethe developer has encroached on the commonproperty. In this case the provisions of section 25(6)will have to be used.

Developers are therefore strongly advised to buildtheir sections within the area demarcated by thesection 25(4)(b) plan.

Re-published with permission from Ghost Digest.

It is imperative, at this stage, to analyze Form Z beforedealing with what constitutes substantial compliancetherewith. This Form requires the disclosure of theacknowledgement of indebtedness by the mortgagorto the mortgagee and the extent thereof, thedisclosure of the ranking of the bond in question, thedisclosure of the security under the bond, and thedisclosure of the execution clause. Thus a bond that issubstantially in Form Z must contain these minimumrequirements. Thus the mere fact that a bond contains

information relating to it being a surety bond does notnecessarily render it unfit for Form Z, if it contains therequirements referred to above.

The example below serves as a useful illustration ofthe application of the concept of substantialcompliance. If the requirements are A, C, D, and F,then A, B, C, D, E and F constitutes substantialcompliance with the requirements; whereas A, B, D, Eand F does not.

10

Encroachment of Section 25 rightsBy: Warren Hamer

Buchanan Boyes Smith Thabata, CAPE TOWN

11

Regulation 26 of the Deeds Registries Act makes itobligatory for every deed of title to land to contain

an extending clause. This clause, among other things,reflects the history of the property concerned. Thishistory always includes the diagram deed and theprevious title deed in terms of which the property washeld; see Forms TT and UU of the Deeds RegistriesAct. It often occurs that property is subject to ausufruct that is held under a separate notarial deed.The question that then arises is whether the relevantnotarial deed is a title deed for the purposes ofregulation 26 or not. This question is answered inRegistrars’ Conference Resolution 58 of 1965. Thisresolution is quoted below.

RCR/RKB 58/19651937/47/4 26: Extending clause personalservitudes separate title to be quoted

Where a personal servitude is held under separatetitle from the land title, such a separate title shouldbe quoted in the extending clause of the deed oftransfer and referred to in bonds.

In an attempt to give effect to this resolution, thefollowing note was raised:

“Lodge K 2668/2004 S and comply with RCR58/1965”.

The deed was duly rejected because the relevantnotarial deed was not lodged and there was noindication that it was not available, not because of thenon-compliance with the conference resolution.

The conveyancer concerned, after consultation withsome official in the Pretoria deeds registry, raised theargument that, because the usufructuary wasdeceased, the usufruct ceased to exist and thereforeRCR 58/1965 was inapplicable. In a reaction to thenote referred to above, the said conveyancer, inexercising the rights referred to in section 30 of theConstitution of the Republic of South Africa, anadvantage that, unfortunately, the South Africanregistration system does not accord to some, stated asfollows:

• “Ek sertifiseer dat K 2668/2004S nie beskikbaar isnie en dat RCR 58/65 nie van toepassing is nie –Sien Nr 1 van stel.”

• "I certify that K 2668/2004S is not available and thatRCR 58/65 is not applicable – See No. 1 of set."

It must be noted that the argument raised is notcontained in the conveyancer’s reaction to the note.Ultimately, the conveyancer did not comply with RCR58/1965.

The question that then arises is whether the death ofa usufrucuary renders RCR 58/1965 inapplicable. It iscontended that the answer to this question is anempathic "no". RCR 58/1965 deals with the existenceof a separate notarial deed in respect of a usufruct andnot with the existence of a usufruct per se. Thus,though the death of the usufructuary renders theusufruct non-existent, it, however, does not render therelevant notarial deed non-existent as well.

In conclusion, it is maintained, and will always bemaintained, that the resolution will always beapplicable where a usufruct is held under a separatenotarial deed, irrespective of whether the usufructuaryis alive or not.

The extending clause and registrars’conference resolution 58 of 1965

By: George TsotetsiOffice of the Chief Registrar of Deeds

land affairsDepartment:Land AffairsREPUBLIC OF SOUTH AFRICA

Introduction

The application of section 4(1)(b) of the Deeds RegistriesAct 47 of 1937 provides headaches for practitioners andexaminers alike. At present, there is no uniform practicein the application of the section and it is left mostly to thediscretion of the Registrar (see RCR 11 of 2001 para 2.1).Unfortunately the Registrars do not exercise thisdiscretion, but it is delegated to the approximately 200examiners, who each hold their own view on theapplication thereof. As far back as 1953, a conferenceheld that only patent clerical errors should be the subjectof an amendment in terms of section 4(1)(b) (see RCR 4of 1953).

In this note it is envisaged to provide guidelines as to theapplication of section 4(1)(b) and as far as possible tosubstantiate it with authority.

Who may apply

The Act does not require an application or an affidavit toeffect the amendment of an error in registration. However,it has become established practice that an application inthe form of an affidavit is lodged.

Where the application is in the form of an affidavit, anagent cannot bring the application on behalf of his or herprincipal. The owner or holder of the right must make theaffidavit him/herself. Should any agent bring theapplication, an affidavit can be dispensed with, provideddocumentary evidence can be provided to the Registrar tosubstantiate the correctness of the facts to be rectified.Similarly, a representative of the owner, such as anexecutor, trustee, curator, etc., cannot make the affidavit.The application can merely be brought by such arepresentative. Where the registered owner is insolvent,and his/her trustee applies for the rectification of an errorto the personal particulars of such insolvent, the insolventmust be joined as an applicant or must grant consent tothe amendment. Alternatively, proof must be provided asto the correct state of affairs, for example a certified copyof the identity document must be lodged. So too, when anexecutor applies for the amendment of the personalparticulars of a deceased, no affidavit in this regard isacceptable from the executor, but proof must be lodged ofthe correct state of affairs. It is contended that,irrespective of the definition of owner in section 102 of theAct, the representative does not have the knowledge to

make an affidavit regarding the personal particulars of theperson he/she is representing.

In summary, it can be said that the application for an errorin registration can be brought by an agent, such as theconveyancer or a representative, but documentary proofof the true state of affairs will have to accompany theapplication, should it relate to personal particulars such asnames, identity numbers, status, etc.

What can be rectified?

Section 4(1)(b) allows for the rectification of an error inregistration in any deed or document pertaining to:

• the name or the description of any person;• the name or description of any property;• conditions affecting such property.

With regard to the rectification of the description of anyperson, Chief Registrars Circular 3 of 1994 provides asfollows:

“2.3 Section 4 (1) (b) of the said Act provides for therectification of an error in the name or the “description”of any person, provided certain conditions are met.The marital state, whether the marriage wasconcluded in or out of community or property and eventhe names of the spouse are all part of a person’sdescription (see section 17 (2) (a), (b) and (c)),therefore section 4 (1) (b) of the Act can be applied torectify an error in such a description. Similarly, in thecase of a person described as unmarried but who inactual fact is a widow/divorcee etc, this can also beamended to rectify the position.

3. Whenever section 4 (1) (b) of the Act is to beconsidered as above, the principles laid down in ExParte Menzies et Uxor 1993 (3) SA 799, must be keptin mind. Apart from these considerations, it must alsobe established whether such an amendment would notresult in a contravention of any other law, e.g. theSubdivision of Agricultural Land Act, 1970 (Act No.70/1970) and the Advertising on Roads and RibbonDevelopment Act, 1940 (Act No. 21/1940).

4. If the deed to be amended is mortgaged by aregistered mortgage bond, such an amendment mustnot invalidate the bond. To comply with, for example,

12

Application of section 4(1)(b) of the Deeds RegistriesAct 47 of 1937 and the intricacies involved therewith

By: Allen WestDeeds Training, PRETORIA

13

the provisions of section 15 of the MatrimonialProperty Act, 1984 (Act No. 88/84) and to renouncethe legal exception “de duobus vel pluribus reisdebendi”, it is recommended that a “substituting” bondbe registered in lieu of the existing bond, which is to becancelled simultaneously.”

The provisions of section 4(1)(b) of the Act can thus onlybe applied if it would not have the effect of transferringany right (section 4(1)(b)(iv) of the Act). The swornaffidavit must make clear mention of this fact, and if itdoes not, a certificate to that effect must be requestedfrom the relevant conveyancer (see RCR 39 of 1958).

It is thus clear that, should the status of a person beamended, which would result in the increase ofshareholders, the provisions of the Subdivision ofAgricultural Land Act 70 of 1970, The AgriculturalHoldings Act of 1919 and the Advertising on Roads andRibbons Development Act 21 of 1940 must be borne inmind, as the provisions of these Acts might becontravened. In the same vein, the title conditions mightalso prohibit the increase in shareholders without thenecessary consent.

Minor errors in the property description can be rectified.However, should the erf number be rectified to discloseanother erf, the application must be considered withcaution, as the same might have the effect of transferringa real right. It would be wise to call or lodge the originaldeed of sale to prove that the amendment to the erfnumber is not tantamount to the transferral of a right (seeRCR 8 of 2003).

Where the rectification of the description of parties hasthe effect of increasing the mortgagors, or where the initialregistration necessitated the compliance of section15(2)(a) of the Matrimonial Property Act 88 of 1984 or thewaiver of the legal exception de duobus vel pluribus reisdebendi, the rectification will not be permitted. The bondwill have to be cancelled and a new or substituted bondwill have to be registered.

Where a cost clause of a mortgage bond was initiallyomitted or reflects the incorrect amount, such error inregistration cannot be effected by an application in termsof section 4(1)(b) or a variation in terms of section 3(1)(s).The bond will also have to be cancelled and a new bondregistered. This applies mutatis mutandis to the amount ofthe bond (see RCR 9 of 2003).

Incorrect township conditions can be substituted with thecorrect conditions, provided that proof in this regard canbe provided (see Ex parte Kacholi Anjuman Islam 1945(2) PHK 123 as confirmed by RCR 37 of 1949.

Although there is no provision in the Act for theamendment of an erroneous purchase price in a deed, aregistrar of deeds may affix a suitable endorsement to thedeed if sufficient proof has been submitted by him/her(RCR 4 of 1956 as confirmed by RCR 7 of 2003).However, should the amendment have the effect of anincrease in the payment of transfer duty, a receipt in thisregard must also be lodged.

Proof to accompany application

Section 4(1)(b)(i) and (ii) specifically provide that everyperson appearing from the deed or other document whohas an interest in the rectification must consent thereto inwriting. However, where any person refuses to consentthereto, the rectification may be made on the authority ofan order of court.

The consents of co-transferees, co-mortgagors and co-mortgagees to the amendment of a name of a transferee,mortgagor or mortgagee respectively, need, however, notbe lodged (RCR 3/1940). If the mortgagor’s name isamended, however, naturally all the mortgagees mustconsent to the amendment of the title deed and bond.

Where an error is common to two or more deeds, theregistrar of deeds has the inherent right to insist on theamendment of all the existing deeds before registration oflater deeds (section 4(1)(b)(iii) of the Act and RCR 67 of1964). It is also required in practice that the applicantmust state in his/her application and/or sworn affidavitthat there are no further deeds requiring amendment. Ifhe/she has failed to do so, the conveyancer may certifyaccordingly.

If the error has a bearing on a party to a registeredantenuptial contract and the parties contend that thecontract has been lost, the deeds office copy of thecontract must be amended and a caveat noted so that theclient’s copy can also be amended on lodgement in theoffice. Thus a certified copy of the lost contract must notbe insisted upon (RCR 52 of 1952). The affidavit by theparties to the amendment of the contract should disclosethat the client’s copy of the contract has been lost ordamaged.

No amendment will be necessary to rectify an error in a“dead” deed, and it is also not practice to amend thename of a person who has no right or interest therein, forexample a transferor in a deed of transfer or cedent in anotarial cession.

Bonds which are being cancelled are also not amended,except if the error has a bearing on the description of themortgagee.

Introduction

I attended the above conference on 13 to 15 June2006 at the Indaba Hotel, Fourways, as one of thepresenters, representing the Department of LandAffairs, Office of the Chief Registrar of Deeds.

The attendees included representatives from theTanzania Ministry of Lands, the banking sector,municipalities, academics from the universities ofLimpopo and UNISA, traditional leaders from theprovinces of Limpopo, North-West and KwaZulu-Natal, led by Dr. Mangosuthu Buthelezi as leader ofthe House of Traditional Leaders in the provinciallegislature and senior officers from various provincialgovernments.

The conference sought to address quite a number ofissues around the implementation or lack ofimplementation of the Act. It focused on a historical tocurrent overview of communal land tenure, the role - ifany - of the traditional councils in the administration ofcommunal land, communal tenure and the right tofamily life, the challenges facing financial institutionsand farmers in financing communal agriculture and therole of the Deeds Registry in the administration of theCommunal Land Rights Act.

Various presenters gave presentations on their areasof speciality around issues which the Act affected andwith that, their recommendations of how the Act canaddress the concerns raised by such affected parties.

Pertinent issues around the Act

It emerged during the presentations of the variouscontributors that there are certain issues of the Actwhich are of concern to the communities and thetraditional leadership. Among them is the concern thatby allowing the traditional councils to exercise thefunction of administering communal land, the Act takesaway the powers exercised by the members elected toplay that role.

The representative from the National Emergent RedMeat Producers’ Organisation, Mr. A Mahanjana,highlighted the apparent indecisiveness of theDepartment to implement the Act and ensure

consistency and effective lawenforcement sys-tems aroundthe Act. He further called for apolicy framework to ensure adecisive implementation of the Act and to provide forspecific roles for government, civil society, traditionalauthorities and communal farming communities. Theneed for all the role-players to co-ordinate their effortsaround the implementation of this Act was seen as thekey to the success of its objectives. The danger ofdepriving other family members of their indigenous lawrights to the use and occupation of the familyhousehold by allocating a land parcel to a head offamily was also highlighted as an area of concern.

From the traditional leaders represented, thereseemed to be a general acceptance that thepromulgation of the Act was inevitable. Their majorconcern stemmed from their specific exclusion fromstructures administering communal land within theirtribal area. This to them is a bitter pill to swallow. Theinclusion of tribal land into the area of jurisdiction of themunicipalities is seen, together with this Act, as thegovernment’s subtle ground-preparation for theeventual taxation and imposition of rates on communalland owners by the municipalities. To this end, theleader of the KZN House of Traditional Authorities, Dr.M Buthelezi, expressed his concern for the deliberateexclusion of traditional authorities from communal landadministration in terms of the Act. It must bementioned that at present the whole of the Act andalternatively certain specified sections thereof, arebeing challenged in the Constitutional Court as beingunconstitutional and therefore invalid. Because of thesub-judice rule, the merits of the challenge will not beentertained further in this article.

Deeds office role

The author’s presentation related to the exposition ofthe role of the deeds office in communal land tenure asenvisaged under the Act.

The presentation involved a brief overview of thedeeds registration process, covering the role of thedeeds office as well as other role players involved inthe process of deeds registration, and adapting thesame to the process envisaged in the Act.

14

Conference on Communal Land RightsAct 2004 (Act no. 11 of 2004)

By: Sydney MekweDeeds Training, PRETORIA

15

The criticisms of the deeds office related to theunacceptable delays in the registration of title deeds inmost of the offices and the mystique around this office.On the issue of delays, it was pointed out to theconference that this was initiated firstly by the initialrationalization process that centralized all deedsregistration functions of the previous TBVC states to,among others, the Pretoria and Cape Town offices.This resulted in extra work for the Pretoria and CapeTown deeds offices without necessarily bringing areadily competent staff complement to deal with theextra deeds. The result was that the new staff had tobe trained first to the required high standard beforethey could be utilized in deeds examining.

It was also pointed out that it is a well-known fact thatwe are experiencing an unprecedented propertyboom. This also adds to the workload of the alreadypressurized deeds office staff.

The mystery around deeds offices was attributed tothe speciality of the transactions registered there (onlyconveyancers allowed in terms of the DeedsRegistries Act to register transactions). It was,however, pointed out that as an office of public record,the deeds offices are available to every member of thepublic wishing to access any public record, subject tocompliance with prescribed requirements in terms ofthe Act.

On the issue of the delay in the implementation of theAct, the presenter explained to the Conference thatthe Act would only be ready for implementation oncethe prescribed regulations have been published in thegovernment gazette. In the absence of anyone fromthe office of the Chief Director: Policy Development,the presenter could not account as to why, sincebefore 2004, the said regulations have not yet beenfinalized. The presenter could only point out that,according to his knowledge, the regulations are beingfinalized and could possibly be published next year.This became the subject of discussion for a while andit became very clear that the non-implementation ofthe Act was a point of concern to the attendees andthe panel-members. The pending Constitutional Courtchallenge of this Act will add to the current delay in itsimplementation.

Challenges to the deeds office in terms ofCLaRA implementation

From the deliberations at the conference it is clear thatthe Department and the deeds office in particular arefaced with the challenge of improving on servicedelivery by improving on the time it takes to finish theexamination process and delivery of the title to the

client. There is a regrettable perception (justifiable ornot) that the deeds office cannot cope with itsworkload. The efforts that are already underway todecentralize deeds offices to the provinces werepointed out to the conference, with Mpumalanga beingheld up as an example. The implications of employingmore staff and training them also explained to theconference.

The need to demystify the deeds offices is one thatneeds attention. The eventual beneficiaries of theapplication of the Act are the rural communities, mostof who have never heard of the deeds office. This, tothe writer, is an indictment on us. We are clearly notdoing enough to reach the general public regardingour services.

There is clearly an urgent need to move on thefinalization of the regulations of this Act. The pendingConstitutional Court case will further add to this delay,but every effort must be made to enable a rollout of theAct once the court case is over (if the outcome is in thestate’s favour). This will also assist in the Department’sattainment of the non-negotiable target ofredistributing at least 30% of the land by 2014.

Conclusion

The conference offered a welcome opportunity to getsome idea on how the office is doing in terms ofcarrying out its mandate within the Batho-Peleprinciples. If the view from the conference is anythingto go by, I am afraid we are not doing well in thesphere of public education and transparency about thedeeds office. There is a general negative publicperception about the deeds office, which is broughtabout by ignorance of its role or function. However,this negative perception was cleared by thepresentation and the answers to the many questionsasked by the attendees. What disturbed most was torealize how wrong people are about the deeds office.It became clear that we need to take our services tothe people in order to demystify this public office.

In the author’s opinion, every deeds office must makesome effort to inform the general public about thenature of its business (use can be made of the DVDsupplied to all the deeds offices). The national officecan also support this initiative, with the deeds officesin the forefront of the campaign. In short, everyopportunity must in the future be seized to publicizethe function of the deeds office and to familiarize thepublic therewith.

Meet the Registrar and his Projectteam. Here are his views:

Since the appearance of the brief article in theApril 2006 issue of the SADJ about the

appointment of the registrar of deeds for theNelspruit Deeds Registry, deeds office corridorsacross the country have been abuzz with rumours,speculations and expectations around thefeasibility and success of the new deeds office.

Many unanswered questions repeated themselves,e.g.:• Have they found a building yet?• What about staff members?• Equipment?• Moving of files?• Where is he seated right now?• Will they prefer experienced deeds office staff or

any suitable qualified person?• Who is assisting him?• Will it take away the overtime from the Pretoria

Deeds Office? • How long do we still have to wait?

Thus the SADJ took the initiative to get a camera andnote pad and went on a fact-finding trip to the PretoriaDeeds Office.

By the way, one question is now answered:• Where is he seated for the purposes of the project?

The Pretoria Deeds Office

An interface with the Registrar of Deeds for theNelspruit Deeds Registry will shed the light anddemystify the whole issue.

After several failed attempts to corner him into aninterview, the elusive, busy Registrar finallysuccumbed to SADJ’s appointment on the morning of31 July 2006.

Mr. Lenthis du Pont, Registrar of Deeds for theNelspruit Deeds Office, honoured SADJ and thereaders with the following interview between himselfand SADJ’s representative, Mr. Wiseman Bhuqa (LawLecturer at Justice College):

Mr. Bhuqa: First and foremost, congratulations onyour appointment as Registrar of Deeds for the up-and-coming Nelspruit Registry and thank you inadvance for pioneering one of the biggest projects ofour sub-directorate. Your achievement is worth morepages than the SADJ can afford.

Mr. Du Pont: Thank you very much for giving me thisopportunity and thanks for your time, as well.

Mr. Bhuqa asks the following questions:

Q: Tell us about yourself with particular regard to yourcareer and your upward mobility that has seen youattain this important position.A: I started my career in the Cape Town DeedsRegistry as a Principal Deeds Controller in 1996, whilestill serving my articles, I was fortunate to have a veryefficient and strong supervisor, worked in theregistration section for one year, thereafter attendeddeeds examining classes under a very good trainingofficer, who gave me a solid examination foundation. Igot promoted to Chief Deeds Controller, which post Iheld for at least four years, thereafter I was promotedto Law Lecturer in Johannesburg Deeds Registry. I leftthe Johannesburg Deeds Registry on my promotion toDeputy Registrar of Deeds in Cape Town, a post I held

16

New deeds registry in Nelspruit,Mpumalanga province

By: W Z BhuqaDeeds Training, PRETORIA

Sitting: G HattinghFront Row: D Khosa, S Bongers, M Makgoka, A SeppBack Row: A Venter, S Mekwe, M Sadiki, L du Pont, H Geldenhuys

17

for at least three years. When the first advertisementfor the post of Registrar of Deeds for Nelspruit DeedsRegistry came through, I was very hesitant to apply.

Q: Why did you hesitate to apply for the post?A: Because I was under the impression that I did notsatisfy the required EE target as per relevant EE plan.Eventually, I applied and got the position.

Q: What other qualifications do you hold academicallyand careerwise?A: I hold a BProc Degree from the University ofPretoria, an LLB degree from Unisa and an LLMdegree from Unisa. I have also worked for theDepartment of Justice as a Maintenance Officer,Department of Home Affairs and RentmeesterInsurance Company as an Administration Clerk whiledoing my studies.

Q: Your appointment is not only strategic but alsohistoric within the profession of deeds registration.Howdo you feel being the man behind this mammoth task?A: I feel honoured to be given the opportunity toestablish and take charge of the Nelspruit DeedsRegistry.

Q: What is the justification behind the founding of theNelspruit Deeds Registry in particular? Are DLD’s notstrategically delivering? Why only Nelspruit and notLimpopo, as well?A: I would say Nelspruit is only the starting point of astrategic process, I would like to refer you to ourstrategic plan, where you will appreciate that the ChiefDirectorate is trying to provide access to the people byestablishing more deeds registries as a servicedelivery and access initiative. This emanates from apolitical decision contained in the Minister’s speechabout taking services to the people. Look, DLD(District Land Delivery) offices do not provide half theservices of a fully-fledged deeds registry, so it is in thetrue interest of service delivery that more and moredeeds registries are established.

Q: Are you getting enough support from your projectteam and from other experienced Registrars ofDeeds?A: Indeed, I get full support particularly from theRegistrar of Deeds for Pretoria, guidance and supportfrom the Registrar of Deeds for Vryburg and also fromthe Chief Registrar of Deeds and his staff.

Q: Wouldn’t your task be a lot easier if you had alreadyappointed a Deputy Registrar to assist you andacclimatize themselves and reach a similar level ofreadiness?A: This is a difficult question, but, yes it would be a loteasier. However, the project committee took a

unanimous decision to fill the above positions duringthe course of the project for instance when the issue ofaccommodation has been addressed, but I personallythink the former would be a better way to go.

Q: On which Surveyor General’s office are you goingto rely for your cadastral information, e.g. diagrams,general plans, etc?A: There is already a Surveyor General’s office inNelspruit. I think it is a year old. We have met with thesaid office and discussed our project. We are going tobe housed separately from the said office, buteventually there will be one building for all thedirectorate’s offices in Nelspruit. That’s a long-termgoal.

Q: Which shared Service Centre is going to serve yourDeeds Registry?A: None, we will use the National Office for ourprocurement needs.

Q: The main duty of a registrar of deeds is to takecharge of a deeds registry, however, you are one of afew, if any at all, to have to take charge of the actualestablishment of a deeds registry, do you perhaps feelthat you are performing far beyond expectation, forwhich you deserve special recognition?A: Not, definitely not beyond expectation. I am of theopinion that colleagues in the other offices, especiallythe bigger offices, have a more difficult job thanestablishing a new deeds registry. This is indeed adifficult job but I draw support from them and wouldtherefore not say I deserve special recognition.

Q: Could you give a brief account on the project ofestablishment of the said deeds registry, particularlythe progress thus far, e.g. have you secured buildings,archives, equipment, recruitment plans, staff trainingplans, conveyancer registrations, where are youbased, what is your project handing-over date, etc?A: Since our first project meeting we have achievedmajor strides like the development of a project plan,encompassing key objectives like record keeping,accommodation and IT. My tender application foracquisition of the building already closed on 12 July2006. I viewed the building in October 2006 andrequested the landlord to make certain structuralchanges to the building that will suit the needs of aDeeds Registry. It is envisaged that the building will beready for occupation at the end of March 2007. Wehave secured an archiving plan, sorted out registersfor agricultural holdings, separated sectional schemefiles, township files and we are in the process ofmaking copies of interdicts. On completion, we aregoing to transfer all the said records to the new deedsregistry. As far as procurement is concerned, we haveidentified the following items to be procured, namely:

server, scanner, archive writer and microfilmequipment. The latter could take a while longer toprocure because of the cost involved, which is thereason why we have started the procurement processearly. Recruitment plan: yes, we have one in place. Asfar as staff training is concerned, the Chief Registrar ofDeeds and Deeds Training (Justice College) willassist, while a law lecturer will also be appointed. Asfar as conveyancer registration is concerned, we havealready had a meeting with the conveyancers ofMpumalanga. The target date for the completion of thewhole process is 31st March, 2007 or hopefully beforethat date.

Q: Are the buildings a new construction or an existingpublic works property?A: We will enter into a lease accommodationagreement with the Department of Public Works.

Q: Have you been allocated enough time to completeyour project?A: There is never enough time for anything, but we areworking very hard to complete the project promptly.

Q: Did you have to design the project on your own oris there a private project designer involved? Pleasetake us through the team list and relative attributes.A: Own, no outside service provider. We havedesigned a very effective work breakdown structure.Look we have an abundance of experience andefficiency in our project team to drive this project,members boast years of experience. Perhaps I mustreveal my project team to you, namely: myself (Mr. LDu Pont (Registrar of Deeds Nelspruit)), Mr. GHattingh (Registrar: Financial Services of the ChiefRegistrar of Deeds, Mr. H Geldenhuys (Registrar:Legal Support and Training of the Office of the ChiefRegistrar of Deeds), Mr. S Mekwe (Law Lecturer), Mr.A Venter (Human Resource Management), Mrs. SBongers (MASS), Mr. T van Reenen (FinancialServices), Ms I Singo (Financial Services), Ms. DMotuba (Human Resource Office of the ChiefRegistrar of Deeds), Mr. M Ramahuta(Communications), Mr. N Koloti (GITO office), Mr. BSadiki (Security Services), Mr. P Mesefo (Registrar ofDeeds, Pretoria Deeds Registry) and Mr. A Sepp(Office of the Chief Registrar of Deeds).

Q: Rumours have it that you are a seasoned projectmanager; have you launched any other big project inthis directorate before, from which you may drawessential skills?A: Definitely not, the project committee, not me, is veryhelpful and has an abundance of experience, I haveno idea where such rumours originate.

Q: Just how big is the Nelspruit Deeds Registry goingto be; in terms of the staff compliment, perceivedlodgements, and municipal districts to be served?

A: The office is going to be 51 staff members strong,with 20% of the work transferred from the PretoriaDeeds Registry, in addition to the projected work. It isestimated that the daily lodgement will be between600 and 1 000 deeds.

Q: Are there any possibilities of cross-border disputesthat may threaten and hamper your progress in theMpumalanga Province?A: None, we will follow the demarcation board’sjurisdiction. Should they re-demarcate boundaries, wewill follow.

Q: Do you have any plans to steal the mostexperienced staff from the other existing deedsregistries to consolidate the success of the new deedsregistry?A: Steal, no, but if they want to come, they are mostwelcome. All posts will be advertised during January2007.

Q: Having been a law lecturer yourself, you willdefinitely appreciate the advantage of kick-startingyour recruitment process with inter alia, the post of lawlecturer, do you have any particular targets in mind?A: Nobody in mind. Our Employment Equity Plan (EEplan) will prevail and we will employ the most suitablecandidate.

Q: Many a deeds office employee will associate theemployment of a young, AA- target registrar likeyourself with new school, paradigm shift and ademocratic management lifestyle. Do you foresee anexodus of the present deeds office personnel toMpumalanga for greener pastures?A: Anyone willing to play a role is welcome to make hisor her contribution. I do not want to sound like I ampre-supposing that there are problems with the currentdeeds registries that might not surface in the NelspruitDeeds Registry.

Q: Have you met any local stakeholders and if so whatis their feeling about their own Deeds Registry?A: We have implemented a communication plan, andbased on that we have met with the localconveyancers. They have expressed great excitementand pledged their utmost support.

Q: What is your targeted pool of recruits likely to be,between the locals who deserve the benefit of this jobopportunity on the one hand, and the deeds officehopefuls who want to advance careerwise on theother?A: Job creation is pivotal currently, especially to thepeople of Mpumalanga. Look, the majority of staff willbe recruited from Mpumalanga in step with jobcreation purposes; however, we will prefer

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experienced staff to fill such essential ranks like ChiefDeeds Controller, Assistant Registrar, DeputyRegistrar, etc.

Q: With Nelspruit currently being serviced by thePretoria Deeds Registry and yourself, the registrar,coming from a Cape Town Deeds Registrybackground, which deeds office culture is NelspruitDeeds Registry likely to inherit?A: I will be very diplomatic in this one: let the officedevelop its own unique culture, although personally Iwould have liked it to develop a mixed hybrid of CapeTown- Johannesburg-Pretoria influence, or the best ofthe three kinds of culture.

Q: As irony would have it; the word “Mpumalanga”means the place where the sun rises; then what isyour vision of the new Nelspruit Deeds Registry in thelight of organizational transformation, particularly withregard to EE and service delivery?A: An EE representative office that boasts excellentservice delivery. An organizational structure thatallows exceptional staff participation at all levels.

Q: What sort of output can you promise the hundredsof Deeds Office personnel and your prospectiveexternal clients once your office is in operation?A: Excellent service delivery.

Q: How different is Nelspruit Deeds Office going to befrom the rest in terms of management style andgeneral employee relations?A: I believe there should be all-round good relationsbetween management and staff on the one hand andbetween staff members inter se on the other. I willbuild an organization built on values. You know, thingslike integrity, mutual respect, honesty and goodworking ethics.

Q: Are there any other important issues that you feelthe readers should be aware of regarding the task athand?A: I just want the readers to know that we have madevery good progress thus far, everything is undercontrol and people may even feel free to give advice orany positive contribution towards the realization of thisproject.

Q: Other than this journal, what other means ofcommunication can an average staff member utilize tokeep abreast with developments on this project?A: Actually, we need to improve on this one bycreating a communication strategy to run parallel withthe project. We could use this journal to report on aquarterly basis.

Q: That brings us to the end of our interview, oncemore on behalf of SADJ, congratulations, thank youand all the best, I’m quite positive the entire sub-directorate rallies behind you in great anticipation.A: Thank you very much for your time and thisopportunity.

Statute of the Hague Conferenceon Private International Law*1

(Came into force on 15 July 1955)

The Governments of the countries hereinafter specified:

the Federal Republic of Germany, Austria, Belgium,Denmark, Spain, Finland, France, Italy, Japan, Luxembourg,Norway, the Netherlands, Portugal, the United Kingdom ofGreat Britain and Northern Ireland, Sweden and Switzerland;

In view of the permanent character of the Hague Conferenceon Private International Law;

Desiring to stress that character;

Having, to that end, deemed it desirable to provide theConference with a Statute;

Have agreed upon the following provisions:

Article 1The purpose of the Hague Conference is to work for theprogressive unification of the rules of private internationallaw.

Article 21. Members of the Hague Conference on Private

International Law are the States which have alreadyparticipated in one or more Sessions of the Conferenceand which accept the present Statute.

2. Any other State, the participation of which is from ajuridical point of view of importance for the work of theConference, may become a Member. The admission ofnew Member States shall be decided upon by theGovernments of the participating States, upon theproposal of one or more of them, by a majority of the votescast, within a period of six months from the date on whichthat proposal is submitted to the Governments.

3. The admission shall become effective upon theacceptance of the present Statute by the State concerned.

* The text of this amended Statute was submitted on 12 July 2005 toMember States of the Hague Conference on Private International Law fortheir approval in accordance with Article 12 of the current Statute.

1As of 30 June 2005, in addition to the founding Member States mentionedin the Preamble, the following States have accepted the Statute: Albania,Argentina, Australia, Belarus, Bosnia and Herzegovina, Brazil, Bulgaria,Canada, Chile, People’s Republic of China, Croatia, Cyprus, CzechRepublic, Egypt, Estonia, Georgia, Greece, Hungary, Iceland, Ireland,Israel, Jordan, Republic of Korea, Latvia, Lithuania, Malaysia, Malta,Mexico, Monaco, Morocco, New Zealand, Panama, Paraguay, Peru,Poland, Romania, Russian Federation, Serbia and Montenegro, SlovakRepublic, Slovenia, South Africa, Sri Lanka, Suriname, The formerYugoslav Republic of Macedonia, Turkey, Ukraine, United States ofAmerica, Uruguay, Venezuela.

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Pretoria DeedsRegistrar puts hisfoot down

By: Allen WestDeeds Training, PRETORIA

The registrar of deeds at Pretoria has issued a circular,drawing conveyancers' attention to malpracticespresent in his registry and has reconfirmed the existingpractice, which fell away due to misuse, as to hownotes raised by examiners on deeds and documentsshould be purged:

Circular 3 of 2006 reads as follows:

• Proof has been submitted to me that the initials ofparties, even those of examiners, are being forgedon documents. This cannot be tolerated and shouldthis be discovered in future, the matter will besubmitted to the Law Society of South Africa for thenecessary steps to be taken.

• Examiners allege that notes are being removed byconveyancing staff. In order to prevent theperpetuation of this, deeds and documents will onlybe accepted for registration if the note has beenpurged by the examiner, inclusive of the name andsignature of such examiner.

• Conveyancers are urged to kindly pay moreattention to the certificates provided, moreespecially the certificates provided in terms ofsection 15B(3) of the Sectional Titles Act 95 of1986.

• It often occurs that such certificates contain falseinformation. It must be remembered that theintegrity of our registration system depends on theauthenticity of certificates provided by conveyan-cers.

• Your co-operation in the above matters will behighly appreciated. The practice contained inparagraph 2 of this circular will come into operationwith immediate effect.”

What is the opinion of other registrars?

Recent case lawon conveyancingissues

By: Allen WestDeeds Training, PRETORIA

Alienation of Land Act 68 of 1981

Engelbrecht v Merry Hill (Pty) Ltd and Others 2006(3) SA 238 (E)

In the judgement, which was delivered in the EasternCape High Court on 11 January this year, the purposeof section 19(2)(c) of the Alienation of Land Act 68 of1981 was restated, namely to provide reasonableprotection to a purchaser of land, as was theperemptory nature of the notice envisaged therein.

The point at issue was whether, when the firstrespondent purported to cancel the sale of theproperties to the applicant, he complied with section19(2)(c) of the Alienation of Land Act 68 of 1981. Thissection requires a seller of immovable property, whodecides to take action consequent upon a breach ofcontract by the purchaser to furnish, in the noticerequired by section 19, ‘an indication of the steps theseller intends to take if the alleged breach of contractis not rectified’.

Engelbrecht (the purchaser) paid a certain amount ofthe installments due but later fell into arrears. Hisexplanation was that an employee of his was to blameand that he knew nothing about the breach of theagreement, nor about the official notification from theattorney acting on behalf of the first respondent, inwhich he wrote:

‘In accordance with clause 9.1 of the Deed of Sale wehave been instructed by the seller to demand fromyou, as we hereby do, payment of the sum of R22534,00 at our offices at the above address within 32days of the date of this letter.

Should payment not be made as aforesaid, then andin that event, the seller shall be entitled to claimimmediate payment of the full balance of the purchaseprice and interest as due by you, as well as all costs

and collection commission; or alternatively shall beentitled to cancel this contract.’

The court made the following observations aboutsection 19:

1. It puts an obligation on the seller which must bemet.

2. The intention of the section is to protect the seller incontracts that usually involve substantial amountsof money.

3. The section requires a ‘clear and unequivocal’notice of intention to cancel the contract;

4. The notice must not consist of a hint or asuggestion as to the consequences of failure toremedy the breach.

5. In affording the purchaser a reasonable measure ofprotection, the seller must also make the election atan early stage. It need not be final and binding butrather an indication of what he or she intends to doabout the breach. If he or she decides to follow adifferent route, then further notice must be given tothis effect.

6. The notice is not invalid if it does not disclose anelection but rather mentioned the steps that werepossible in terms of the applicable provision of thecontract. The purpose of an election being madewas spelt out clearly the page J in Miller v Hall 1984(1) SA 355 (D), i.e. to enable the purchaser‘realistically to appraise the consequences of thevarious courses open to him’ and that ‘[h]e willundoubtedly be able to do this more effectively if heknows precisely what consequences will ensue ifhe persists in his breach than if he is unaware ofwhich of the several courses open to him the sellerproposes to adopt’.

The court consequently found that its application of itsinterpretation of section 19 to the facts of the case wasthat … “no indication was given to the applicants of thesteps that the first respondent intended to takepursuant to the applicant’s breach of their contract, asrequired by section 19(2)(c) of the Act, and that, as aresult, the notice was invalid.”

Nuisance

Allacias Investments (Pty) Ltd & Another vMilnerton Golf Club & Intervening Parties(unreported)

The applicants in this matter were allowners/occupiers of properties bordering on theMilnerton Golf Course. They were fed up because theirproperties were being struck by golf balls being hit byplayers playing the sixth hole, despite the secondapplicant having put up a 4.7 metre-high net around

his property. In dismissing the application, Traversorestates the common law of private nuisance asstressed by Steyn CJ in Regal v African Superslate(Pty) Ltd 1963 (1) SA 102 (A), to wit, that the differencebetween the common law systems of Roman Dutchand English law should not be overlooked, and, ascommented on by Professor J R L Milton, be drawnupon, shaped and interpreted in the judgements of theSouth African courts.

Disputes between neighbours invariably involve,among other things, the question whether there hasbeen an abuse of a right and whether, according to thefacts, the neighbour whose conduct has beencomplained of has in fact, with reference toconsiderations of reasonableness and fairness,exceeded his powers of ownership. It is therefore aquestion of balancing the right to the owner of theproperty to do with his property as he likes and theright of the neighbour not to be interfered with.

Objectively, and with reference to all the facts andcircumstances, had the golf course actually actedwrongfully? In deciding the question a number offactors were considered, such as:

• The applicants live on the golf course, so shouldaccept some balls will hit their homes.

• What constitutes an excessive number of golfballs?

• The Milnerton Golf Club has taken precautionarymeasures – planted trees, the sixth hole is playedas a par four, except on Wednesdays andSaturdays.

In assessing the reasonableness of the respondent’sactions, the following facts were taken intoconsideration:

• The fact that the respondent has operated a golfcourse in Milnerton since 1925.

• The applicants’ complaint is not that the respondenthas recently commenced using the propertydifferently to the way in which it has been used forthe past 80 years, i.e. for playing golf.

• The applicants do not suggest that any unnatural orinappropriate activity is being carried out on the golfcourse. They accept that golf is being played on alocality designed for that purpose.

• A very important factor is that, at the time when theproperty was purchased, and in fact at all relevanttimes hereto, the applicants knew and understoodthat golf would be played on the propertyimmediately adjacent to their properties and that

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they would be exposed to the consequencesinherent in being in such a position.

• What is also clear is that the respondent wasprepared to go to great lengths to try and alleviatethe problem of which the applicants werecomplaining.”

Relying on various cases from foreign jurisdictions tosupport the contention that the number of golf ballsentering the second applicant’s property wasunreasonable was dismissed as unhelpful, as the testfor reasonableness must be determined with referenceto the facts of the case.

Applicants failed to:“show that the respondent’s conduct is unreasonablein the sense that the number of golf balls exceedswhat could reasonably have been expected by them tostrike their property in the circumstances of this case.Nor have they shown that the damage caused to theirproperty exceeds what can reasonably be expected inthe normal course of a property situated on a golfcourse.” At [20]. Secondly, the applicants alsoappeared to take relatively inexpensive measures toprotect themselves – they did not put up a net, forinstance, because it would ruin their view of TableMountain. The respondent on the other hand did showa willingness to take reasonable measures to minimizethe risk of damage by golf balls to the applicants’property.

In short:“[24] Living next to a golf course brings certain benefitsin relation to the environment in which one lives.However, it also entails a real danger that theproperties so situated will be susceptible to being hitby golf balls. That is a risk that any reasonable personwill accept.

[25] In view of all the factors set out above, I concludethat the respondent has not interfered unreasonablywith the rights of the applicants.”

Massing of estates

Rhode v Stubbs 2005 (5) SA 104 (SCA)

This decision is a rare decision regarding the legalprinciples underlying the massing of estates. The bulkof South African decisions dealing with this area of ourlaw of succession were decided more than a halfcentury ago.

The facts of Rhode were as follows:Attie and Lettie Williams were married in community ofproperty. They had executed a mutual will in whichthey bequeathed one half of an immovable property totheir son Charles, and the other half to Evelyn, Attie’s

daughter from a previous marriage. These bequestswere made subject to a usufruct in favour of thesurvivor of the two testators. When Attie died, hisshare of the immovable property devolved on the twolegatees (Charles and Evelyn), while Lettie enjoyedthe usufruct. In his lifetime, Charles had been thespouse of the respondent in the present case(Stubbs). Prior to her death in 1969, Lettie executed awill in which she bequeathed her share of theimmovable property (which had in the meantime beensubdivided) to the appellant (Rhode). Rhode wasLettie’s child from a previous marriage. The rights ofoccupation of the whole property, and later the twosubdivided parts of the property, were registered bythe Local Town Council in the name of Evelyn.

A dispute arose as to who exactly was entitled to whatportion of the property. Suffice it to say for presentpurposes that it was common cause that the rights ofthe persons involved, and also the question as to thecorrectness of the transitional council’s decision toregister it in Evelyn’s name, depended entirely onwhether Attie and Lettie’s will massed their estates.

Conradie JA (Mpati AP, Cameron, Mthiyane and BrandJJA concurring) held that for massing it was necessarythat the one testator disposed of both his own estate(or part of it), and the estate (or part of it) of the othertestator. The mere acceptance of the benefits from amutual will (here Lettie’s acceptance of the usufructcreated in the will) could not in itself bring aboutmassing. If, in the first place, there was no massing,any act of the survivor (Lettie) which would otherwisepoint to adiation (acceptance of the terms of the will)was meaningless.

There is a general presumption against the massing ofestates and the provisions of Attie and Lettie’s will didnot rebut this presumption.

The original will therefore had to be interpreted as twowills and the appeal was upheld with costs.

land affairsDepartment:Land AffairsREPUBLIC OF SOUTH AFRICA

Confusion has surrounded the issue of the need for anElectrical Certificate of Compliance (CoC), since a local

magazine claimed that a recent court ruling said that it wasno longer necessary, unless it is a condition of sale. In orderto clear up any misunderstanding, the Electrical Contractors’Association (SA) (ECA) has responded as follows:

“Neither the ECA nor the Department of Labour (which isresponsible for enforcing the Occupational Health andSafety Act (OHASA) and the Electrical Installation Regula-tions) are aware of any recent court ruling CoCs. There is,however, a legal opinion in circulation by a high court judgequestioning whether OHASA has the necessary authority toregulate practice in respect of residential properties (and theelectrical installations on such properties).”

The question remains to be answered and, until then, theElectical Installation Regulations still apply. Basically theyare as follows:

“The Electical Installation Regulations require every user orlessor of an electrical installation (i.e. a premises that iselectrified) to have a valid CoC, which is transferable, inrespect of such an installation. The exception is that, if theinstallation existed prior to October 1992 and there has beenno addition or alteration to that installation, and it has notchanged ownership since 1 January 1994, then no CoC isrequired. Once a change of ownership occurs, a CoC isrequired.”

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Lodgement of electrical compliance certificatesBy: Allen West

Deeds Training, PRETORIA

Decentralized Level VII course11 to 15 September 2006

The Sub-Directorate: Deeds Training held a decentralized Deeds Registration Course Level VII for senior officials from themajority of the Deeds Registries throughout South Africa in Newlands, Cape Town on the above dates.

From the evaluations received from the participants, which included the Registrar of Deeds from Cape Town, Mr. Kessy Pillay,each and everyone enjoyed the course thoroughly and is prepared to apply the knowledge learnt.

– Conveyancers beware!

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Aconference presented by Professor C Gvan der Merwe, Graham Paddock and

Joseph Maluleke was hosted by GrahamPaddock and Associates in the heart of theCape Winelands on 11 and 12 September2006.

The main purpose of the two-day conferencewas to cover the future revisions to theSectional Titles Act 95 of 1986, the newScheme Management Law and the forth-coming Ombudsman Service.

The conference was opened by the DeputyDirector General of Land Affairs, Dr. NozizweMakgalemele, who had the following to say:

“Distinguished learnedProfessors, Members of theUniversity of Stellenbosch,Conference Organisers,Colleagues, Ladies andGentlemen,

We are all gathered here to enrich a processinitiated by the Department of Land Affairs andably supported by our sister Department:Housing. That is, to find solution to theperennial consumer-related problems of oursectional titles law. In this initiative, MessrsGraham Paddock & Associates, have, withsustained devotion and unflinching commit-ment, been our facilitators.

As we all know, the foresight of ourpredecessors, initially in 1971 and later in1986, to institute a viable regulatory environ-ment to cater for buildings and housingdevelopments where multiple owners indivi-dually own defined units in what is really asingle property remains fraught with challen-ges. These challenges are invariably notindicative of defective reasoning or lack of creativethoughts on the part of our forbears. Indeed theintroduction of sectional title law itself is a bold eventof historical significance which placed the countryahead of many in the so-called developed world. It hascommendably deepened our legal system, wherehitherto such divided ownership was foreign to the

common law. Social interaction is undoubtedlyenhanced by sectional title living. Worthy of note alsois that without the events of 1971 and 1986, SouthAfrica perhaps would not have scored another ‘first’ in

Third-Generation Sectional Title ConferenceBy: Allen West

Deeds Training, PRETORIA

The conference was held at the magnificent Ou Hoofgebou at theUniversity of Stellenbosch

The three lead consultants together with representatives of theDepartment of Land Affairs who attended the conference. SundayOrgunronbi; Prof. van der Merwe; Dr. Makgalemele; Joseph Malulekeand Graham Paddock. Dr. Makgalemele also made the openingaddress at the conference.

the sectional title world by giving us a world-renowned, distinguished and celebratedexpert on sectional title & apartment law –Professor C G van der Merwe!

The current Sectional Titles Act, despite thenumerous piece-meal amendments over theyears, is faced with the complexity of itsunique ‘form of ownership’ and the way thelaw is applied, including the type of use towhich it is put. In its application, we havesince learnt that the Act may no longer beappropriate to manage emerging currentissues and challenges, and in this instancethe resolution off consumer-related disputes.We must also deal with the challenges ofinstituting sustainable measures as we facethe future.

As the Department of Land Affairs, weimagined that the introduction of a non-judicial alternative dispute resolution mecha-nism, as against a lawyer-centred adversarialand litigious system, in the guise of an‘Ombudsman’, may be appropriate to addresssome of the consumer-related concerns. Yet,we are not prescriptive. We have thereforesought the wise counsel of the experiencedhands and minds of our consultants, andyourselves via opportunities such as this. Wetrust that you shall avail us the benefit of yourvaried experiences in finding creative ways ofdealing with the multi-dimensional challengesin the sectional title industry.

We must not forget that in the times leading tothe 1971 and 1986 forms of the SectionalTitles Act, we ‘borrowed’ from Australia!Today, more than ever before in a globalworld, and while cognizant of factoring ‘home-grown’and unique South African challenges in fashioning asolution, we must not shy away from peeping into howsimilarly-situated countries wrestle their not-dissimilarchallenges. After all, the expertise of our ownProfessor C G van der Merwe continues to be thefountain from which many countries’ experiencesflourish! Ideas must constantly be bench-markedagainst best practices to determine what can workhere and what has worked elsewhere.

Such international cross-fertilisation of ideas andsharing of worthy international experiences abound inmany sources, including academic writings. Forinstance, writing in the 2006, Volume 16 Edition of theDuke Journal of Comparative & International Law atpages 125 to 156, Professors van der Merwe and LuisMuñiz-Argüelles on “ENFORCEMENT OF FINANCIAL

OBLIGATIONS IN A CONDOMINIUM OR APART-MENT OWNERSHIP SCHEME”, one of the keyconsumer-related challenges facing us, that is, theresolution of disputes regarding non-payment of leviesto body corporate was ably addressed with insightfulexpertise and lucid clarity. Pertinently, on pages 155,the authors diagnosed that:

“However the crucial question is how thecondominium statutes should deal with the unit ownerwho has financial difficulties in keeping up with hispayment of contributions. Most statutes allow for theattachment of the movable (personal) property of thedefaulter and ultimately for foreclosure on the unititself. Alternative dispute resolution procedures mightbe helpful to bring the defaulter, the association and

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The conference was hosted by the three lead consultants - JosephMaluleke; Graham Paddock and Prof. van der Merwe

Franz Holm, Western Cape regional secretary of NAMA and ChrisFarley from Trafalgar in Cape Town celebrating with Graham Paddockand Sam Paddock who is also now working at Paddocks

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lenders (mortgage creditors) together in an effort toreschedule the mortgage debt and/or work out ways inwhich the contribution debt can be satisfied. Thedebtor may, for instance, be able to refinance his unitwith his original mortgage creditor and use theadditional amount to pay his arrear contributions.”

In inviting conferees to read the solutions proferred inthis article, we must still come up with answers to thisand many more questions that this conference cantouch upon. We must indeed not shy away from thebenefit of other experiences, we can only be wiser forit!

It is worth remembering in conclusion that our‘participatory democracy’ is not a concept that reduceslaw-making activities to the sole preserve of our

elected representatives. We are not onlyconstitutionally bound to effectively participate in law-making, the Matatiele Constitutional Court decisionhas imposed a positive duty of popular participation inthe legislative processes. We have an obligation toshare our views on the future of sectional titles. Theconference in the next two days clearly offer the spaceto pour out our great minds! I trust in the end, thisgeneration and future generations will find worthytoday’s efforts.

Siyabonga!!!”

All stakeholders involved in sectional titles participatedin the discussions and the anticipated draft legislationis awaited with awe.

Conference on the role of traditionalleadership and local government

Traditional leader Dr Buthelezi Dr Buthelezi and traditional leader Dr Holamisa

Dr Buthelezi and Advocate Mojapela

The above conference was held inDurban on 1st and 2nd August 2006 andattended by Allen West, representing theChief Registrar of Deeds, Mr. SamLefafa.

The main theme of the conference wasto determine the role of localgovernment and traditional leaders inthe land reform process. Although veryinteresting papers were delivered byvery distinguished guests, the contentsare not of importance at this time.

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Response to article on conditions infavour of home owners' associations

The article by Allen West in the SADJ of October 2005on page 17 requires a further discussion. The articlestems from prevailing uncertainty “as to when theconsent from the Home Owners Association (HOA)must be lodged where a condition in favour of the HOAis being created in the power of attorney to passtransfer” and, in essence, concludes that a registrar ofdeeds should depart from the “given fact that wherethe condition is created in the power of attorney, suchcondition is only operative as from registration”, andinsist on the lodgement of such consent, where thecondition being created reads as follows:

“The erf may not be transferred to any person who hasnot bound himself to the HOA ……”.

Further, the conclusion reached in the discussion isinfluenced by a felt need to possibly prevent a situationin which a township developer/owner does notautomatically become a member of a HOA when atownship is established or a small-scale sub-division isapproved.

With all due respect to Allen West and for the reasonsset out hereunder, his conclusion and the basis thereofcannot be subscribed to.

As a matter of trite common law and as clearlycontemplated in section 20 of the Deeds RegistriesAct, 1937, a Power of Attorney, authorizing aConveyancer to act on behalf of and Owner (in thiscase, a Developer), cannot bring about a state ofaffairs which would not have resulted had the Owner(Developer) personally executed a deed of transfer inthe presence of a registrar of deeds, which deed oftransfer was witnessed by the Registrar.

As a result, the requirement to “create a condition in aPower of Attorney” serves no purpose other than toprovide written evidence of specific authority grantedto a Conveyancer, in his/her capacity as attorney/agent of a Transferor, to actually embody/incorporatethe condition in the draft deed of transfer.

Moreover, if regard is had to the fact that the conditionis imposed by the Developer with a view to restrict theright of ownership of the Transferee (and, obviously,not the right of ownership of the Developer

himself/itself as Transferor), it becomes abundantlyclear that the condition takes effect immediately afterregistration of transfer of the erf in the name of theTransferee.

Most interestingly, it could never have been theintention of the Developer that a condition that reads“The erf may not be transferred ……………” shouldtake effect from a point in time which is different fromthat of a condition that reads “The owner of the erf maynot transfer ………….”. It is a case of saying exactlythe same thing in different words but with the sameeffect.

The Registrar’s main duty, in the circumstances, is toconsider whether the condition is registerable or notand, if so, to register it and to guard against itsviolation henceforth.

The predicament can properly be circumvented,among other things, by following the example inCondition 1.14.1 of the Declaration of MontanaExtension 99 as Approved Township, published underLocal Authority Notice No. 795 on page 5 of theGauteng Provincial Gazette Extraordinary No. 120dated 28 March 2006, whereby “The developer isdeemed to be a member of the Section 21 Company,with all the rights and obligations of an ordinarymember, until the last erf has been transferred”.

In conclusion, I make the observation that, theresponsibility to prevent the predicament referred toabove falls squarely on the shoulders of the Developerand/or the relevant Local Authority and, therefore,outside of the scope of the duties of the Registrar.

By: Thabo NqhomeThemba Mabasa Attorneys

I concur with the sentiments expressed by Thabo,however, it must be stressed that conditions in favourof Home Owners' Associations are sometimes createdin the conditions of establishment or consent tosubdivision and merely brought into the power ofattorney ex abudanti cautela and treated as pro nonscripto. It is thus the duty of the practitioner andexaminer to check whether the condition has notalready been created, in which case the consent mustbe insisted upon. - Editor

Letters to the editor

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Response to article on change of name ofTrusts

The article Change of name of trusts (hereinafterreferred to as “the discussion”), written by Allen Westand published in SADJ of March 2006, on page 27ended with a request for opinions thereon fromreaders.

Firstly, I consider it necessary, for the sake of clarity, tomake the following comments and/or observations oncertain crucial aspects of the discussion:

1. Section 44 of the Companies Act, 1973, provides,amongst other things, for a change of name of acompany, the issue by the Registrar of Companiesof a certificate of the change of the name of suchcompany and (for the purposes of the DeedsRegistries Act, 1937) for a Registrar of Deeds to“make in his register all such alterations as arenecessary by reason of the change of the name ofthe company”.

2. Section 4(2) of the Trust Property Control Act, 1988,requires that, when a trust instrument which hasbeen lodged with the Master is varied, the trusteeshall lodge the amendment or a copy thereof,certified as a true copy by a notary or other personapproved by the Master, with the Master. In myopinion, the latter amendment includes a change ofname of a trust.

There is no provision whatsoever in the Trust PropertyControl Act, 1988, for the issue by a Master of acertificate of change of name of a trust and/or, as aconsequence of such change, for a Registrar of Deedsto make in his register all such alterations as arenecessary by reason of the change of the name of thetrust.

Therefore, subject to paragraph 3 hereof, I support thesubmission by Allen West for an appropriateamendment to the Trust Property Control Act, 1988,with a view to prevent the inconvenience resultingfrom the latter shortcomings.

Secondly, I address Allen West’s statement to theeffect that, except for Registrars’ ConferenceResolution 13 of 2004, “it is still maintained that thereis no enabling legislation sanctioning the change ofname of a trust”:

1. As is evident from paragraph 1 above, it isimportant to draw a clear distinction betweenchanging a name, on the one hand, and makingalterations/endorsements resulting from a changeof name, on the other hand.

2. Although “the change of name” and “themechanism to record the change of name” are usedinterchangeably in the discussion, it is clear from aperusal of the discussion as a whole that, by“change of name”, Allen West means makingalterations/endorsements resulting from a changeof name only.

3. Whereas he concedes that “Section 93 of theDeeds Registries Act 47 of 1937, however, doesprovide for the mechanism to record the change ofname of a person or partnership” and that

“In terms of section 2 of the Deeds RegistriesAmendment Act 9 of 2003, a definition of “person”was included in the Deeds Registries Act, defininga trust as a person”, it is not understood why AllenWest maintains that “[e]xcept for the Conferenceresolution, it is still maintained that there is noenabling legislation sanctioning the change ofname of a trust.”

4. RCR 13 of 2004 is not, and has never beenintended to be, “enabling legislation”. RCR 13 of2004 merely confirms that the provisions of section93 of the Deeds Registries Act, 1937, as amended,which section is, undoubtedly, a legislativeenablement, can be invoked to make endorse-ments resulting from a change of name of a trustand sets out the nature of the proof which isrequired in support of the relevant applications.

5. It is submitted that, the omission, in section 93, ofthe Deeds Registries Act, 1937, to spell out thenature of the proof of the change of namecontemplated therein, does not, per se, detract orsubtract from the fact that the section enablesapplications and endorsements arising fromchanged names. Further, it is not uncommon for thelegislature to require proof of facts without spellingout the nature of such proof. Moreover, it isnoteworthy that the said section 93 does not applyto trusts only but to partnerships, natural personsand juristic persons.

Finally, and, for the sake of completeness, Iemphasize that my support for amendments to theTrust Property Control Act, 1988 is not based on a lackof a legislative enablement, providing for makingalterations/endorsements resulting from a change ofname of a trust, but on the need for a considerablymore convenient mechanism, running parallel to anexisting mechanism, to achieve the same result.

By: Thabo NqhomeThemba Mabasa Attorneys

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Response to article on Section 45(bis)

This is a comment on a very interesting, thought-provoking and comprehensive article on Section45(bis) by Dudley Lee, which was published in theJuly-edition of the SADJ on page 15.

It is noteworthy that, according to section 102 of theDeeds Registries Act, 1937 (“the Act”), “share”, inrelation to land means an undivided share. It isnoteworthy, further, that, whereas sections 45(1) and45bis(1) of the Act refer to “share”, section 45 bis(1A)refers to “undivided shares”. Therefore, as a point ofdeparture, it is reasonable to assume an intention onthe part of the legislature to contemplate somedifference in the meanings of “share” and “undividedshare” in the said respective sections of the Act.

Further, in the said respective sections of the Act,“share” is expressly stated to relate only to a situationwhere a surviving spouse or one of the divorcedspouses has lawfully acquired “the share of thedeceased spouse” or “the share of his or her formerspouse”, respectively, whereas ‘undivided share”relates to an accrual – a term with an unquestionablywide connotation.

Therefore, in the context of the said respectivesections of the Act, “share” is intended to mean anentire undivided share (of the deceased spouse ordivorcee) whilst “undivided share” is intended to meanany proportion of an undivided share.

It should be clear, therefore, that, having regard to itspractical experience, if it had intended to restrict“undivided share” to “half share” in section 45bis(1A)of the Act, the legislature would not have hesitated tosay so as it had clearly done in sections 45(1) and45bis(1) of the Act.

A further important observation is that, in the saidrespective sections of the Act, “share” goes hand inhand with “shall” whereas “undivided share” goeshand in hand with “may”, on the part of a registrar ofdeeds. A registrar of deeds would, therefore, not bejustified in refusing to endorse a title deed undersection 45bis(1A) of the Act purely on the grounds ofan accrual of an undivided share, which is more thana half undivided share. However, a registrar of deedswould justifiably refuse to endorse a title deed undersection 45bis(1A) of the Act where, for example, anaccrual is prohibited by law (section 3 of theSubdivision of Agricultural Land Act, 1970) or wherethe two fractions of undivided shares are more or lessthan the whole property (1/5 and 2/5 or 3/5 and 4/5).

The fact that the court order, or the court order andauthorization, referred to in section 45bis (1A)(b) of theAct is not limited to a division in half undivided shares,is a further indication that an endorsement undersection 45bis(1A) is not intended to apply to aretention of an undivided share only. The same appliesto section 23, 23bis and 24 of the Act, read withregulations 30 and 31 of the Act, from which it is clearthat “undivided shares” is not limited to a half share.

Therefore, I endorse the statement in chapter 4 at2.8.2 (iv) on page 29 of the Deeds Registration LawManual, regarding the requirement to lodge a transferduty receipt/exemption and a rates clearancecertificate, to the extent that an endorsement undersection 45bis (1A) of the Act entails an acquisition ofan undivided half share over and above a retention ofan undivided half share.

While I fully endorse Dudley Lee’s view to the effectthat “[t]he “respective shares” can only be the sharethat accrues to each spouse as envisaged in section45bis(1A)(a) and must include shares other than halfshares as well”, this view seems to be directlyweakened by his next statement, to the effect that“[t]here can be no doubt that, should spouses agree toretaining shares other than a half share each, section16 of the Deeds Registries Act 47 of 1937 must apply.In other words a transfer of property must take place.”I do not understand why, exceptionally, transfer by wayof endorsement should not take place in terms ofsection 45bis(1A) of the Act, particularly if regard ishad to the fact that the fundamental common purposeof, which is expressly stated in, section 45, 45bis(1)and 45bis(1A) is, notwithstanding section 16 of theAct, to enable a transfer or cession by way ofendorsement.

In conclusion, I submit that the harsh realities ofsection 45bis(1A) of the Act may not be defeated bydrawing a distinction between an endorsement, whichconfirms a retention of an undivided half share, on theone hand, and an endorsement, which entails anacquisition of a proportion of an undivided share.

By: Thabo NqhomeThemba Mabasa Attorneys

Response to article on Section 4(1)(b)

This is a response to an article on Application ofsection 4(1)(b) which was published in the July 2006edition of the SADJ on page 37.

Since applications for the rectification of errors interms of the section 4(1)(b) of the Deeds Registries

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Act 47 of 1937 (“the Act”) arise from errors and (suchapplications) are necessary, and since, almostinvariably, an application to rectify Conveyancer A’serror is attended to by Conveyancer B, or anotherremote conveyancer, without any liaison withConveyancer A, I have, with all due respect,misgivings about Allen West’s submission “that theprovisions of section 4(1)(b) of the Deeds RegistriesAct, 47 of 1937 are being misused and abused”,certainly to the extent that the words “misused andabused” may imply a wrongful intention on the part ofanybody. Moreover, in the rare event thatConveyancer A would have the opportunity to attend toa rectification of his/her own previous error, he/shewould, under normal circumstances, bear all the costsof such rectification, which action signifies the absenceof an intention to misuse and abuse.

It would seem to me that the problem highlighted byAllen West regarding unnecessary costs incurred by aregistered owner of immovable property, is by andlarge attributable to ignorance and/or negligence onthe part of a conveyancer who commits an error. Thiswould seem to be so irrespective of the number oferrors committed by the conveyancer.

As shown above, there can be no problem withConveyancer A’s attention to the rectification of his/hererrors free of charge. However, I submit thatConveyancer B cannot be expected to attend to therectification of Conveyancer A’s errors free of charge.

Further, the inconvenience of, and expense to,Conveyancer B, if he/she were to alert Conveyancer Ato the latter’s errors and the consequences thereof,discourages such course of action.

Section 15A(1), read with Regulation 44A of the Act,also serves, to a fair extent, as a guarantee that aparty to a transaction, who/which becomes adverselyfinancially affected by a conveyancer’s error, would becompensated by that conveyancer for losses incurredby such party, which losses result from such error.Practical considerations, such as the costs of aguarantee and the period of validity thereof, in relationto when, more or less, the error would be discovered,make the provision of a financial guarantee a veryremote option in the circumstances. In any event, I donot think that it would be necessary to give a financialguarantee because, in my opinion, the affectedconveyancer would not only be willing but would alsobe in a position to pay for the losses. However, shouldit be strongly felt that some financial guarantee isnecessary, it could be worthwhile to make specialprovision for it in the fidelity insurance cover in respectof every conveyancer.

In view of the unnecessary hardships caused toinnocent consumers by the problem raised by AllenWest, I would recommend preventative action as partof a solution to the problem: that is, notwithstandingthe relief that section 15A(1) read with Regulation 44Aof the Act was intended to give to Deeds Registries,reasonable and practicable steps ought to be taken byDeeds Registries to prevent, or considerably reduce,the registration of documents containing errors. In theresult, almost all errors committed by a conveyancershould result in a rejection of his/her documents thereand then, and, thereupon, give him/her the opportunityto attend to the rectification of his/her own errors freeof charge. To this end, the enforcement of section4(1)(a) of the Act, as suggested by Allen West, would,amongst other things, be a step in the right direction.

By: Thabo NqhomeThemba Mabasa Attorneys

Elaboration on amendment of divorcecourt orders

I wish to elaborate on an article published in theOctober 2006 Edition of the SADJ on page 42 by AllenWest on the amendment of divorce agreements.

The question of whether or not an amendment of adivorce agreement by parties after divorce is lawful oracceptable for deeds registration purposes can beaddressed against the backdrop of the provisions ofsection 14 of the Deeds Registries Act 47 of 1937 andthe Chief Registrar of Deeds’ directive namely ChiefRegistrar’s Circular 21 of 1990. Despite the green lightgiven by the above directive in favour of the saidamendment, there appear to be more pointers againstsuch an amendment than there are in favour thereofas will be briefly illustrated below.

As a point of departure, section 14 of the act must beconstrued as strictly peremptory due to its pragmaticprovisions as clearly discernible from section 14(1)(b)which states inter alia that; “it shall not be lawful todepart from any such sequence in recording in anydeeds registry any change in the ownership in suchland or such real right…” The peremptory nature ofsection 14 is even further evidenced by the fact thatthe said section clearly specifies all transactions thatmay depart or deviate from the prescribed sequenceof registration, see section 14(b)(i)-(v) of the act. It isnot lawful for any other transaction to deviate from thesaid sequence. The fact that even the transactions thatare exempt from the strict sequence provision mustessentially be sanctioned by the deeds registries act,other law or court, is indicative of the extent to whichthe departure from section 14 is prohibited.

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This leaves behind no doubt as to this section’spragmatic applicability. It is only a logical conclusiontherefore that where spouses who were married toeach other in community of property and have sincedivorced enter into an agreement (inter partes) to sellimmovable property to a third, the sequenceprescribed by section 14 must be followed namely thatthe spouses must first re-vest the property in theirnames in terms of section 45bis(1)(A) and thereafterprocure transfer to the third party. Chief Registrar’sCircular 21 of 1990.

Covert Tax Evasion? The above provides that thedivorced spouses may alter their divorce settlementagreement and even decide to sell land to a third partywithout having to comply with the section 45bisvesting. By skipping a registration matter, theforegoing directive is fraught with the unlawfuldeparture from section 14. Although legally speakingan alteration of the divorce settlement agreement interpartes, irrespective of the allocation in the divorcedecree is permissible there is an indication that suchalteration is only restricted to other aspects andpatrimonial assets than immovable property. This isevidenced by the fact that section 8 of the Divorce Act70 of 1979 which deals with amendments, alterationsand rescissions of orders to divorce decrees onlycovers amendments only pertaining to maintenance,custody, access, etc. and not patrimonial assets, e.g.immovable property.

The problem with the said directive as it stands is thatit seems to open a loop hole in the act for skipping oftaxable registration transactions (a form of covert taxevasion), for instance where the divorce agreementawards the whole joint estate to one of the spousesand the latter simultaneously sells immovable propertyto a third party. In the context of the said directive itmeans that the transfer to the third party may beprocured without first lodging a section 45bis(1)(a)application, thereby evading a taxable transaction –see section 9 of the Transfer Duty Act 40 of 1949. Atleast the said directive may find a considerablemeasure of jurisdiction in skipping a non-taxabletransaction like section 45bis(1)(A) where bothspouses still acquire the dissolved joint estate andretain their undivided shares.

What is also a great cause of concern with the saiddirective is the provision thereof that says such anagreement needs not be lodged for examinationpurposes at the deeds registry; whereupon examinersshould infer from the signing of the power of attorneyto transfer by both parties that such alteration of thedivorce decree has been effected. This automaticallyturns the power of attorney to transfer into a power of

attorney in rem suam, i.e. the appearer is alsoappointed to effect the amendment of the divorcesettlement agreement.

In conclusion, although alteration of the divorcesettlement is permissible in law, it should at least berestricted to other aspects of the divorce order thanimmovable property or it must not affect section 14 if itdoes extend thus far. As far as CRC 21 of 1990 isconcerned, it should not find application in section45bis(1)(a) cases.

By: Wiseman BhuqaDeeds TrainingPRETORIA

Response to conference resolutions

Response to George Tsotetsi’s interesting overview ofRegistrars’ Conference Resolutions 19/2005 (“RCR19/2005”) and 44/2005 (“RCR 44/2005”).

George Tsotetsi in SADJ for October 2006 on page 15questions the correctness of the consistent applicationof section 57 of the DRA by deeds registries incircumstances where a bond has been passed bymore than one mortgagor, and submits that: “where aco-mortgagor transfers her/his share in the relevantproperty, the appropriate procedure is to release thesaid co-mortgagor as contemplated in section 55(DRA) and not to invoke the provisions of section 57(DRA) as postulated in RCR 7/1994.”

For the reasons set out below, I do not doubt thecorrectness of Registrars’ Conference Resolution7/1994 (“RCR 7/1994”) and RCR 19/2005.

In view of the fact that section 57(1) of the DeedsRegistries Act 47 of 1937 (“the DRA”) refers to “land”,and “land”, unless inconsistent with the context, isdefined in section 102 of the DRA as including a sharein land, I submit that it is inevitable to accept thatsection 57 of the DRA applies to a joint-mortgagoralso.

In my opinion, a crucial implication of theaforementioned definition of “land” is that, technically,a joint-owner/mortgagor/debtor, who transfers her/hiswhole share in land, as implied in section 34(1) of theDRA, does not, and cannot, transfer her/his joint-owner/ mortgagor/debtor’s whole share in the land.

In my opinion, George Tsotetsi’s arguments/questionsabout the value of substituting a person who is alreadya mortgagor as a mortgagor and the differencebetween a substitution of a co-debtor and an additionof a co-debtor, can be answered as follows:

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(a)In section 57 of the DRA, the legislature has madeprovision for a cheap and short mechanism for thesubstitution of debtors and joint-debtors – refer tosimilar substitutions provided for in sections24bis(3), 45(2)(c) and 45bis(2)(a) and (b)(iii) of theDRA. The said mechanism is an alternative to thelong and expensive mechanism whereby, forexample, in order to achieve the same result, anexisting mortgage bond would have to be cancelledand a new one registered – refer to section 56 and50 of the DRA.

(b)Depending upon the number of the transferees setout in the relevant deed of transfer, a substitution ofdebtor in terms of section 57 of the Act, read withRCR 7/1994 and RCR 19/2005, can result in anaddition of more debtors. However, such addition isnot incompatible with, and does not detract orsubtract from, the relevant substitution.

(c)A reference, particularly to sections 24bis(3),45(2)(c) and 45bis(2)(a) and (b)(iii) of the DRA,casts a doubt on the correctness of some aspectsof George Tsotetsi’s understanding to the effect thata substitution will necessarily result in one person(who, according to him, cannot be a current joint-debtor) taking the place of another and the otherperson disappearing from the picture altogether. Itis clear, for example, from section 45(2)(c) of theDRA, that the substitution referred to therein resultsnot only in the disappearance “from the picturealtogether” of one joint-debtor but also in thesubstitution of the other and existing joint debtor forher/his former joint debtor.

For the following reasons, I am unable to fullysubscribe to George Tsotetsi’s views on “joint debtor”in section 3(1)(g) of the DRA, and submit, therefore,that the words “substitution of another person for adebtor in respect of any such bond” in the said sectionconform to the prevailing application of section 57 ofthe DRA as envisaged in RCR 7/1994 and RCR19/2005.• Section 6(b) of the Interpretation Act 33 of 1957

provides that, in every law, unless the contraryintention appears, “words in the singular numberinclude the plural, and words in the plural numberinclude the singular.” Therefore, if the land inquestion is being transferred by joint-owners/debtors, “substitution of another person fora debtor in respect of any such bond” will be appliedaccordingly.

• If they were to be followed, George Tsotetsi’s saidviews would, for example, render the provisions ofsections 24bis(3), 45(2)(c) and 45bis(2)(a) and(b)(iii) of the DRA nugatory because of asubstitution of one existing joint-mortgagor for the

other existing joint-mortgagor. Further, it would notbe permissible to register a substitution of joint-transferees C and D for joint-owners/transferors/debtors X and Y under section 57 of the DRA.

I now consider George Tsotetsi’s view to the effect that“the appropriate procedure is to release the said co-mortgagor as contemplated in section 55 (DRA) andnot to invoke the provisions of section 57 (DRA) aspostulated in RCR 7/1994.”

• It is significant that, whereas section 57 of the DRAapplies to the transfer by an owner of “land which ishypothecated under a registered mortgage bond…”, the absolution of the transferor from anyobligation secured by the bond and the substitutionof the transferee for the transferor as debtor inrespect of such bond, there is no provision for suchtransfer, absolution and substitution in section 55 ofthe DRA. Accordingly, I submit that section 55 of theDRA does not provide for an alternative to section57 of the DRA.

• However, it is not only useful but also of particularinterest to note from section 55(1) of the DRA thatthe legislature is favourably disposed to, andrecognizes, joint-mortgaging and the continuationof a mortgage bond after the release of a joint-mortgagor and all her/his property.

• I make the observation that, instead of a release ofa joint debtor in terms of section 55(1) of the DRA,the legislature in section 57 of the DRA intended topreserve a joint-mortgage by way of substitution ofanother joint-mortgagor for an existing joint-mortgagor provided, amongst other things, that thetransfer in question is of the whole land, or thewhole share in the land, being transferred.

• It is also significant to note the implication of thedifference between “all property” in section 55(1)(bof the DRA and “the whole of the land” in section57(1). In my opinion, the former is directed at one ormore properties while the latter relates to theintegrity of the land, or a share in the land, beingtransferred by one deed of transfer.

In conclusion and by way of a summary, I submit that,as envisaged in RCR 7/1994 and RCR 19/2005,section 57 of the DRA should be applied, for example,in the following cases:

• A and B are the mortgagors of an erf, which theyown in undivided shares, and A transfers her/hiswhole share in the erf either to B alone, B and Cjointly or C alone.

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• X, the owner of Erf 66, and Y, the owner of Erf 99,have passed one mortgage bond over their erven.X transfers the whole of Erf 66 to either Y alone, Yand Z jointly or Z alone.

• J, the mortgagor of Erven 77 and 78, transfers thewhole of Erf 77 to either K alone, K and L jointly orL alone.

44/2005 Cession of section 25 real right andsubstitution

• For the sake of completeness, it is necessary tomention that George Tsotetsi’s statement to theeffect that “section 57 of Act 57 of 1937 refers onlyto the substitution in respect of a bond on land …”is subject to the definition of “land” in the Act – referto paragraph A 3 above.

• I am not convinced that “land” in section 57 of theDRA is the reason for the disqualification of asubstitution under section 57 of the DRA of a debtorfor a mortgagor of a real right of extension referredto in section 25(1) read with section 25(4) of theSectional Titles Act, 1986 (Act No. 95 of 1986) (“theSTA”). In my opinion, the actual and only reason forthe said disqualification is to be found in section 18of the STA, which reads as follows:

“The provisions of sections 56 and 57 of the DeedsRegistries Act shall apply mutatis mutandis withreference to the transfer of any mortgage unit orundivided share in a unit, the cession of anymortgaged lease of a unit or undivided share in aunit, the cession of any mortgaged real right in orover a unit or an undivided share in a unit, and thetransfer under section 17 of this Act of anymortgaged common property or land or anundivided share therein.”

By: Thabo NqhomeThemba Mabasa Attorneys

Response to sales in execution

My comment on Sales in execution by P J Weideman,which was published in the SADJ March 2006 on page52, is as follows:

After discussing section 30 of the Administration ofEstates Act 66 of 1965 (“the Act”) and, amongst otherthings, drawing attention to the fact that a sale incontravention of the said section is a nullity, P JWeideman enquires “whether it is the duty of theRegistrar of Deeds to determine that no such transfersare registered unless accompanied by a direction ofthe High Court?” and makes the observation that: “Inmost cases, sale in execution transfers lodged at the

Deeds Registry will not indicate whether the owner isdeceased.”

Sales by Sheriffs, pursuant to writs of executionagainst immovable property, are governed by Rule 45of the Rules regulating the conduct of proceedings inthe several Provincial and Local Divisions of the HighCourt (“the Rules”). Rule 46(5) of the Rules prohibits,in peremptory terms, a sale in execution of immovableproperty, which is subject to any claim preferent to thatof the execution creditor, unless certain procedures,which I do not propose to set out herein, have beenfollowed. I venture to express the belief that, in thiscase also, transfer documents lodged with deedsregistries do not confirm that the aforementionedprocedures have been followed. The same applies todocuments relating to the transfer of erven arisingfrom contracts, which contracts are of no force andeffect in terms of section 67(2) of the Town-planningand Township Ordinance (Transvaal) 15 of 1986 (“theOrdinance”).

A perusal of the vast literature, which has a bearing onconveyancing and/or registration of deeds, shows thatthere is no consistency at all regarding the allocationor assumption of responsibilities for the purposes ofpreventing, amongst other things, null and voidregistration at deeds registries. As shown above, insome cases there is no allocation of responsibilities atall. In the circumstances and in the absence of anydirective on a particular case, opinions will alwaysdiffer on whether any role player, particularly theTransferor, the Conveyancer or the Registrar ofDeeds, should take any responsibility at all and, if so,which role player should take the responsibility.

In the midst of a diversity of ways in which thechallenge posed by P J Weideman can be addressed,I would suggest a requirement for the production toRegistrars of Deeds of affidavits or certificates bySheriffs in connection with section 15B(3) of theSectional Titles Act, 95 of 1986, for example.

Similarly and for the sake of completeness,Conveyancers should be required to certify aboutsection 67(2) of the Ordinance. I submit that theapproach suggested in this paragraph would be one ofthe responsible ways of taking reasonable stepsaimed at improving the reliability of our deedsregistration system and the protection of the interestsof the public in general.

By: Thabo Nqhome

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Tertius Maree Associates, P O Box 12284, DIEBOORD, 7613

Guidelines forarticles in the SADJ

SADJ welcomes contributions in any of the 11 officiallanguages, especially from deeds office staff andpractitioners. The following guidelines should becomplied with:

1. Contributions should as far as possible be originaland not published elsewhere.

2. Contributions should be useful or of interest to theconveyancing practice and land issues. Thedecision of the editorial committee is final.

3. Authors are required to prove their involvement orinterest in any matter discussed in theircontributions.

4. Footnotes should be avoided. Case reference, forinstance, should be incorporated into the text.

5. When referring to publications, the publisher, cityand date of publication should be provided. Whenciting reported or unreported cases and legislation,full reference details should be included.

6. Articles should be in a format compatible withMicrosoft Word and should either be submitted bye-mail or, together with a printout, on a stiffy orcompact disk. Letters to the editor, however, maybe submitted in any format.

7. The editorial committee and the editor reserve theright to edit contributions as to style and languageand for clarity and space.

8. Articles should be submitted to Allen West at e-mail:allenW@justcol.org.za or Private Bag X659,Pretoria 0001.

land affairsDepartment:Land AffairsREPUBLIC OF SOUTH AFRICA