LPL4804
Assignment 1
Semester 1
Due 17 March 2026
, Question 1
Zanele Khumalo owns erven 3 and 4 of Kruger Township and wishes to
consolidate the properties. Erf 3 is subject to a mortgage bond in favour of Blue
Bank. How should she deal with the mortgage bond over Erf 3?
Answer
Consolidation of land involves the merging of two or more registered erven into one
new erf, which replaces the existing properties in the Deeds Registry. Because
consolidation affects the legal identity of the land, any real rights registered over the
existing erven must be properly addressed. A mortgage bond is a limited real right
and enjoys protection under South African property law.
In this scenario, Erf 3 is encumbered by a mortgage bond, while Erf 4 is not. Zanele
cannot proceed with consolidation without dealing with the bond, because the Registrar
of Deeds may not register a transaction that prejudices the rights of a bondholder.
There are three possible legal methods of dealing with the mortgage bond.
1. Cancellation of the mortgage bond
Zanele may elect to cancel the mortgage bond over Erf 3 before consolidation.
This process would involve:
• Full settlement of the outstanding loan secured by the bond
• Written consent by Blue Bank
• Registration of a cancellation of bond in the Deeds Office
Once cancelled, Erf 3 would be free of encumbrances and could be consolidated with
Erf 4 without complication.
Assignment 1
Semester 1
Due 17 March 2026
, Question 1
Zanele Khumalo owns erven 3 and 4 of Kruger Township and wishes to
consolidate the properties. Erf 3 is subject to a mortgage bond in favour of Blue
Bank. How should she deal with the mortgage bond over Erf 3?
Answer
Consolidation of land involves the merging of two or more registered erven into one
new erf, which replaces the existing properties in the Deeds Registry. Because
consolidation affects the legal identity of the land, any real rights registered over the
existing erven must be properly addressed. A mortgage bond is a limited real right
and enjoys protection under South African property law.
In this scenario, Erf 3 is encumbered by a mortgage bond, while Erf 4 is not. Zanele
cannot proceed with consolidation without dealing with the bond, because the Registrar
of Deeds may not register a transaction that prejudices the rights of a bondholder.
There are three possible legal methods of dealing with the mortgage bond.
1. Cancellation of the mortgage bond
Zanele may elect to cancel the mortgage bond over Erf 3 before consolidation.
This process would involve:
• Full settlement of the outstanding loan secured by the bond
• Written consent by Blue Bank
• Registration of a cancellation of bond in the Deeds Office
Once cancelled, Erf 3 would be free of encumbrances and could be consolidated with
Erf 4 without complication.
