UNIT 1 - OVERVIEW
1. Name and two types of land registration system.
A positive system implies that:
• The state guarantees bona fide third parties that the state register in the designated
deeds registry is an authoritative record of the rights to clearly defined units of land.
• The state examines/investigates documentation and transactions for legality.
• The state completes and maintains a register of title
• Register of title is linked to a cadastral (a system of records showing details of
ownership) system of maps and diagrams.
• Transfer takes place when the register of title is annotated and any deeds are merely
endorsed.
• From this it follows that new deeds are not necessary for each transaction as the
main source of information is the deeds register which is merely annotated /updated.
• Linking of different transactions occurs.
• The state guarantees the accuracy of the deed register and is liable for shortcomings.
• Such a deed register is characterized by a high degree of state interference.
A negative system implies the following:
• The state gives no guarantees to bona fide third parties regarding the accuracy of the
state deeds register.
• The state simply records deeds submitted at face value.
• There is no examination of the deeds or investigation by the state prior to recording.
• Transfer is effected in the new deed, not when the state deeds register is
annotated/updated so a new deed must be executed for each transaction.
• There is usually no link to a cadastral system of maps and diagrams.
• Third parties cannot rely on the accuracy of the state records, which might give an
inaccurate or incomplete picture.
• The state incurs no liability for inaccurate or incomplete records.
• Parties often guarantee their rights by taking out private insurance.
• There is minimal state interference.
2. South Africa?
South Africa is nominally negative but has some characteristics of a positive system as
well.
Positive:
• State examines/investigates deeds
• State completes and maintains register of title
• State is linked to cadastral system of maps and diagrams.
• Main source of information is the deeds register
• Linking of transactions occurs
• High level of state interference/intervention
, • State accepts liability in certain instances (sec. 99 provides that no act or omission by
official in registrar’s office will render grn liable except if official acted mala fide or
did not exercise reasonable care or diligence in execution of his duties)
Negative:
• Each transfer takes place in a new deed
• State generally not liable – only in certain circumstance (sec. 99)
SA does not guarantee the correctness of the data contained in the SA deeds
registries, it does not simply record deeds at face value either – it provides
owners/real right holders with security of title. Both titleholders and bona fide third
parties rely on the correctness of the information contained in the title and deeds
registry records. It is also unnecessary for South African titleholders to ensure their
rights in case a third party should subsequently prove to have a better title to the
property, as in the case of a negative registration system.
3. Legator McKenna Inc & Another v Shea & others 2010 (1) SA 35 SCA
Following a m/v accident in which Ms. Shea suffered severe brain injuries making it
impossible for her to manage her own legal and financial affairs, attorney McKenna of
Legator McKenna Inc. Attorneys was appointed by the court as curator in March 2002.
Then, before receiving a letter of appointment by the Master of the High Court, in
April 2002, McKenna sold Ms. Shea’s immovable property to Mr and Mrs Erskine, in
order to apy Ms. Shea’s pressing debts. With his signature McKenna inserted the
words “curator” and “Subject to the approval of the Master of the High Court”.
The Master’s appointment in favour of McKenna was issued in June 2002, and the
Master’s consent to the sale to the sale followed on 17 July 2002. The transfer in
favour of Mr and Mrs Erskine was registered on 27 July 2002 and in March 2003, Ms.
Shea recovered spectacularly, to such an extent that the court declared her once
more capable of managing her own affairs. Approximately a year later Ms. Shea
applied to court for, among other things an order for the return of the immovable
property against repayment of the purchase price. The Erskines in turn institutes a
conditional damage claim against McKenna for R1,7m should the immovable property
be returned to Ms. Shea, based on McKenna’s breach of the implied warranty that he
was authorized to sell the property.
In the court a quo Shea succeeded. The sale was declared void due to Mckenna’s lack
of authority and since the causa of the sale was void, so was the subsequent
registration of transfer in the deeds office. On appeal this decision was reversed and
the abstract theory of the passing of ownership applied. It has thus now been
definitely decided that the abstract theory of passing of ownership applies in South
Africa. This means that even though the original causa of a transaction registered in
the deeds office may be defective, if there is a real agreement to transfer ownership
and both parties have performed under that real agreement, then the subsequent
transfer is valid.
UNIT 2 – THE CONVEYANCER
4. What does it take to be a conveyancer in SA?
, A conveyancer is an attorney who has:
• Specialized in the preparation of deeds and documents destined for registration in
the deeds registry
• Passed additional national Law Society conveyancing exams
• Been admitted to practice by the High Court
• Been enrolled on an electronic register of conveyancers maintained by the
registrar of deeds in terms of Regulation 16 of the Deeds Registries Act 47 of 1937.
5. Duties of a conveyancer:
5.1 Ensure valid agreements of sale of land (deed of alienation)
Section 2(1) of the Alienation of Land Act 68 of 1981 provides that no alienation of
land will be of any force or effect unless it is contained in a deed of alienation, signed
by the parties, or their agents acting on their behalf, or their agents acting on their
written authority, while alienation of land refers to the sale, exchange, or donation of
land. However there are exceptions for public auctions and where an agent acts on
behalf of a close corporation or company still to be formed. Note that section 28(2) of
the Alienation of Land Act provides that even if the provisions of sec 2(1) is not fully
complied with, where the transferee has performed in full and the transfer has been
registered, the alienation will be valid in all respects.
5.2 Manage financial matters of the transaction process
In every transaction where there is a transfer of rights in exchange for payment of
money, the conveyancer must manage the financial matters. This implies that the
conveyancer must ensure he has sufficient cash funds and/or guarantees and
undertakings to cover the consideration payable; must ensure the purchase price is
sufficient to cover the capital and interest required to cancel the existing bond or that
the seller has alternative funding available, as no property may be transferred unless
the existing bonds have been disposed of (cancelled or the property released from
the operation of the bond); ensure that the transfer duty, municipal rates and taxes,
deeds office levies and transfer fees have been paid, and collect the money for all
this from the party liable for costs in terms of the deed of sale; to ensure there is
enough funds to honor undertakings to third parties (for example to pay the estate
agent) and lastly the conveyancer must remember to present guarantees and
undertakings for collection on date of registration of the transaction and to pay out
his undertakings on behalf of the seller or purchaser, before paying over the
proceeds of the sale.
5.3 Prepare deeds and documents and take responsibility for correctness of facts
To prepare a deed means to check the contents thoroughly and thereafter sign the
preparation clause on the top right-hand corner of the first page, to certify the
correctness of certain facts and the signatory’s responsibility in this regard in terms
of section 15A(1) and (2) and regulation 44(A) of the Deeds Registries Act. As the
conveyancer is now responsible and liable (to the extent provided for in regulation
44A), it is not necessary to lodge proof of certain facts contained in the deed, such as
the identity numbers and marital status, at the deeds office. This saves time for the
deeds office personnel, who will simply accept the correctness of the allegations of
the preparing conveyancer in this regard. According to s15 of the Deeds Registries
Act, before a registrar of deeds may attest, execute or register a deed of transfer,
certificate of registered title or a mortgage bond for registration, it must be prepared
1. Name and two types of land registration system.
A positive system implies that:
• The state guarantees bona fide third parties that the state register in the designated
deeds registry is an authoritative record of the rights to clearly defined units of land.
• The state examines/investigates documentation and transactions for legality.
• The state completes and maintains a register of title
• Register of title is linked to a cadastral (a system of records showing details of
ownership) system of maps and diagrams.
• Transfer takes place when the register of title is annotated and any deeds are merely
endorsed.
• From this it follows that new deeds are not necessary for each transaction as the
main source of information is the deeds register which is merely annotated /updated.
• Linking of different transactions occurs.
• The state guarantees the accuracy of the deed register and is liable for shortcomings.
• Such a deed register is characterized by a high degree of state interference.
A negative system implies the following:
• The state gives no guarantees to bona fide third parties regarding the accuracy of the
state deeds register.
• The state simply records deeds submitted at face value.
• There is no examination of the deeds or investigation by the state prior to recording.
• Transfer is effected in the new deed, not when the state deeds register is
annotated/updated so a new deed must be executed for each transaction.
• There is usually no link to a cadastral system of maps and diagrams.
• Third parties cannot rely on the accuracy of the state records, which might give an
inaccurate or incomplete picture.
• The state incurs no liability for inaccurate or incomplete records.
• Parties often guarantee their rights by taking out private insurance.
• There is minimal state interference.
2. South Africa?
South Africa is nominally negative but has some characteristics of a positive system as
well.
Positive:
• State examines/investigates deeds
• State completes and maintains register of title
• State is linked to cadastral system of maps and diagrams.
• Main source of information is the deeds register
• Linking of transactions occurs
• High level of state interference/intervention
, • State accepts liability in certain instances (sec. 99 provides that no act or omission by
official in registrar’s office will render grn liable except if official acted mala fide or
did not exercise reasonable care or diligence in execution of his duties)
Negative:
• Each transfer takes place in a new deed
• State generally not liable – only in certain circumstance (sec. 99)
SA does not guarantee the correctness of the data contained in the SA deeds
registries, it does not simply record deeds at face value either – it provides
owners/real right holders with security of title. Both titleholders and bona fide third
parties rely on the correctness of the information contained in the title and deeds
registry records. It is also unnecessary for South African titleholders to ensure their
rights in case a third party should subsequently prove to have a better title to the
property, as in the case of a negative registration system.
3. Legator McKenna Inc & Another v Shea & others 2010 (1) SA 35 SCA
Following a m/v accident in which Ms. Shea suffered severe brain injuries making it
impossible for her to manage her own legal and financial affairs, attorney McKenna of
Legator McKenna Inc. Attorneys was appointed by the court as curator in March 2002.
Then, before receiving a letter of appointment by the Master of the High Court, in
April 2002, McKenna sold Ms. Shea’s immovable property to Mr and Mrs Erskine, in
order to apy Ms. Shea’s pressing debts. With his signature McKenna inserted the
words “curator” and “Subject to the approval of the Master of the High Court”.
The Master’s appointment in favour of McKenna was issued in June 2002, and the
Master’s consent to the sale to the sale followed on 17 July 2002. The transfer in
favour of Mr and Mrs Erskine was registered on 27 July 2002 and in March 2003, Ms.
Shea recovered spectacularly, to such an extent that the court declared her once
more capable of managing her own affairs. Approximately a year later Ms. Shea
applied to court for, among other things an order for the return of the immovable
property against repayment of the purchase price. The Erskines in turn institutes a
conditional damage claim against McKenna for R1,7m should the immovable property
be returned to Ms. Shea, based on McKenna’s breach of the implied warranty that he
was authorized to sell the property.
In the court a quo Shea succeeded. The sale was declared void due to Mckenna’s lack
of authority and since the causa of the sale was void, so was the subsequent
registration of transfer in the deeds office. On appeal this decision was reversed and
the abstract theory of the passing of ownership applied. It has thus now been
definitely decided that the abstract theory of passing of ownership applies in South
Africa. This means that even though the original causa of a transaction registered in
the deeds office may be defective, if there is a real agreement to transfer ownership
and both parties have performed under that real agreement, then the subsequent
transfer is valid.
UNIT 2 – THE CONVEYANCER
4. What does it take to be a conveyancer in SA?
, A conveyancer is an attorney who has:
• Specialized in the preparation of deeds and documents destined for registration in
the deeds registry
• Passed additional national Law Society conveyancing exams
• Been admitted to practice by the High Court
• Been enrolled on an electronic register of conveyancers maintained by the
registrar of deeds in terms of Regulation 16 of the Deeds Registries Act 47 of 1937.
5. Duties of a conveyancer:
5.1 Ensure valid agreements of sale of land (deed of alienation)
Section 2(1) of the Alienation of Land Act 68 of 1981 provides that no alienation of
land will be of any force or effect unless it is contained in a deed of alienation, signed
by the parties, or their agents acting on their behalf, or their agents acting on their
written authority, while alienation of land refers to the sale, exchange, or donation of
land. However there are exceptions for public auctions and where an agent acts on
behalf of a close corporation or company still to be formed. Note that section 28(2) of
the Alienation of Land Act provides that even if the provisions of sec 2(1) is not fully
complied with, where the transferee has performed in full and the transfer has been
registered, the alienation will be valid in all respects.
5.2 Manage financial matters of the transaction process
In every transaction where there is a transfer of rights in exchange for payment of
money, the conveyancer must manage the financial matters. This implies that the
conveyancer must ensure he has sufficient cash funds and/or guarantees and
undertakings to cover the consideration payable; must ensure the purchase price is
sufficient to cover the capital and interest required to cancel the existing bond or that
the seller has alternative funding available, as no property may be transferred unless
the existing bonds have been disposed of (cancelled or the property released from
the operation of the bond); ensure that the transfer duty, municipal rates and taxes,
deeds office levies and transfer fees have been paid, and collect the money for all
this from the party liable for costs in terms of the deed of sale; to ensure there is
enough funds to honor undertakings to third parties (for example to pay the estate
agent) and lastly the conveyancer must remember to present guarantees and
undertakings for collection on date of registration of the transaction and to pay out
his undertakings on behalf of the seller or purchaser, before paying over the
proceeds of the sale.
5.3 Prepare deeds and documents and take responsibility for correctness of facts
To prepare a deed means to check the contents thoroughly and thereafter sign the
preparation clause on the top right-hand corner of the first page, to certify the
correctness of certain facts and the signatory’s responsibility in this regard in terms
of section 15A(1) and (2) and regulation 44(A) of the Deeds Registries Act. As the
conveyancer is now responsible and liable (to the extent provided for in regulation
44A), it is not necessary to lodge proof of certain facts contained in the deed, such as
the identity numbers and marital status, at the deeds office. This saves time for the
deeds office personnel, who will simply accept the correctness of the allegations of
the preparing conveyancer in this regard. According to s15 of the Deeds Registries
Act, before a registrar of deeds may attest, execute or register a deed of transfer,
certificate of registered title or a mortgage bond for registration, it must be prepared
