Question 1
Scenario Recap:
Erf 201 Meadowlands Township → Xolani is owner (leased to Zanele).
Farm Moreson → Xolani is not owner, but holds a usufruct (personal
servitude).
Instruction: Xolani wants a single notarial bond over both assets in favour of
Moses as security for a loan.
Relevant Law
1. Types of Notarial Bonds – In terms of the Security by Means of Movable
Property Act 57 of 1993, a notarial bond is a mortgage over movable property,
registered in the Deeds Registry by a notary.
2. Immovable property security – For land (e.g., Erf 201), the correct instrument
is a mortgage bond, not a notarial bond.
3. Usufructuary rights – A usufruct is a personal servitude (intangible
incorporeal right) and cannot be mortgaged in the same way as ownership of
land. You can only grant security over a right if it is alienable and mortgageable
— a usufruct is neither alienable (without consent of owner) nor mortgageable.
4. Scope of security rights – A notarial bond cannot include immovable property,
nor a personal servitude like a usufruct.
Application to Facts
Erf 201 Meadowlands Township is immovable property. Security over
immovable property must be in the form of a mortgage bond under the Deeds
Registries Act 47 of 1937, not a notarial bond.
, Usufruct over Farm Moreson is a personal servitude and cannot be
encumbered by a notarial bond — Xolani does not own the farm, and his usufruct
is not freely transferable security.
Therefore, no valid notarial bond can be registered over these assets as
described. The correct route would be:
o Register a mortgage bond over Erf 201 (if unencumbered and with
proper title).
o For the usufruct — not possible as security unless the bare dominium
owner consents to cession of rights, but even then registration would be
problematic.
Conclusion for Q1
I, as the notary, cannot execute the instruction as given, because:
1. Notarial bonds apply to movable property — the assets provided are immovable
property and a personal servitude.
2. The correct legal instruments for the two rights differ, and they cannot be
combined in a single notarial bond.
3. Alternative: Draft a mortgage bond over Erf 201 in favour of Moses and explore
possible cession (if allowed) of the usufruct rights with the consent of the owner
of Farm Moreson — but a standard notarial bond over both as requested is
impossible.
Mark allocation hint: 5 marks for stating law on notarial bonds, 3 for applying to each
asset, 2 for conclusion.
Scenario Recap:
Erf 201 Meadowlands Township → Xolani is owner (leased to Zanele).
Farm Moreson → Xolani is not owner, but holds a usufruct (personal
servitude).
Instruction: Xolani wants a single notarial bond over both assets in favour of
Moses as security for a loan.
Relevant Law
1. Types of Notarial Bonds – In terms of the Security by Means of Movable
Property Act 57 of 1993, a notarial bond is a mortgage over movable property,
registered in the Deeds Registry by a notary.
2. Immovable property security – For land (e.g., Erf 201), the correct instrument
is a mortgage bond, not a notarial bond.
3. Usufructuary rights – A usufruct is a personal servitude (intangible
incorporeal right) and cannot be mortgaged in the same way as ownership of
land. You can only grant security over a right if it is alienable and mortgageable
— a usufruct is neither alienable (without consent of owner) nor mortgageable.
4. Scope of security rights – A notarial bond cannot include immovable property,
nor a personal servitude like a usufruct.
Application to Facts
Erf 201 Meadowlands Township is immovable property. Security over
immovable property must be in the form of a mortgage bond under the Deeds
Registries Act 47 of 1937, not a notarial bond.
, Usufruct over Farm Moreson is a personal servitude and cannot be
encumbered by a notarial bond — Xolani does not own the farm, and his usufruct
is not freely transferable security.
Therefore, no valid notarial bond can be registered over these assets as
described. The correct route would be:
o Register a mortgage bond over Erf 201 (if unencumbered and with
proper title).
o For the usufruct — not possible as security unless the bare dominium
owner consents to cession of rights, but even then registration would be
problematic.
Conclusion for Q1
I, as the notary, cannot execute the instruction as given, because:
1. Notarial bonds apply to movable property — the assets provided are immovable
property and a personal servitude.
2. The correct legal instruments for the two rights differ, and they cannot be
combined in a single notarial bond.
3. Alternative: Draft a mortgage bond over Erf 201 in favour of Moses and explore
possible cession (if allowed) of the usufruct rights with the consent of the owner
of Farm Moreson — but a standard notarial bond over both as requested is
impossible.
Mark allocation hint: 5 marks for stating law on notarial bonds, 3 for applying to each
asset, 2 for conclusion.
