Summary LPL 4804 CONVEYANCING NOTES FINAL.MUST READ.

TYPES OF LAND REGISTRATION SYSTEMS Negative land registration systems Positive land registration systems  State does not guarantee accuracy of register and third parties cannot rely on accuracy of records and often guarantee their rights by pvt insurance  State incurs no liability for inaccurate or incomplete records  No examination of deeds by the State prior to recording - State simply records deeds submitted at face value  Transfer is effected in the new deed, and not in the State register, and therefore a new deed is required for each transaction  Usually no link to a cadastral system of maps and diagrams  Minimal state interference  State completes and maintains a register of title and guarantees accuracy and correctness of register  State is liable for shortcomings in records  State examines/investigates documents and transactions for legality  Transfer takes place when the register of title is annotated and deeds are merely endorsed - new deeds not required for each transaction  Register of title linked to cadastral systems of maps and diagrams  High degree of state interference  Linking of transactions occurs The SA system is nominally negative, but has some characteristics of a positive system. Positive characteristics of the SA land registration system  State investigates and examines deeds before annotating the register.  State accepts liability for shortcomings in specific, limited circumstances  State completes and maintains a register of title  Linked to a cadastral system of maps and diagrams  Linking of transactions occurs  High degree of state interference  State does not record deeds at face value  State provides owners with security of title CLS cc Conveyancing Notes 2 Critical Law Studies cc Negative characteristics of the SA land registration system  State does not guarantee correctness of data or accuracy of the register, BUT parties do rely on the correctness of information.  Transfer is effected in the new deed and a new deed must be executed for each transaction  State incurs no liability for inaccurate records - If there are defects in title, a party may claim delictual or contractual remedies against the Conveyancer, however the State is only liable for damages in terms of S99 DRA, if it can be proved that: a) the loss resulted from an act/omission of a registrar or an official employed in a registry; and b) it was committed in bad faith or as a result of a failure to exercise reasonable care and diligence. When will the SA register not reflect the true registered owner? 1. Where land is expropriated, the expropriating authority becomes owner of the land on the date in the expropriation notice, and transfer is later registered in the deeds office. 2. Where ownership in land is acquired by prescription, the person becomes owner on the date of the court order, and formal transfer is later effected in the registry in terms of the court order. 3. Where an unmarried person owns property and later marries in community of property, the existing deed will not reflect his spouse as coowner. Although the State does not guarantee the correctness of the Deeds Registry records, it does provide security of title and it is not necessary for parties to take out private insurance - titleholders and third parties do rely on the correctness BUT are third parties who rely bona fide on the Deeds Office records protected? View 1 The first view is that where land is transferred and the bond is not cancelled, the Transferee acquires the land subject to the bond. Standard Bank v Breitenbach: it was held that a bond which had mistakenly not been endorsed on the Title Deed was still duly registered once the Registrar of Deeds signed the bond, and that any bona fide purchaser who later purchased the land, acquired it subject to the bond. Barclays National Bank Bpk v Registrateur van Aktes: where a bona fide purchaser acquired land which was subject to a bond, which had not been cancelled, the bondholder retained its real right and the purchaser received the land subject to the bond. CLS cc Conveyancing Notes 3 Critical Law Studies cc View 2 The second view is that land title automatically includes a tacit guarantee of indisputable title. Heyl JWS Grondregistrasie in Suid-Afrika. Perskor: the land would be acquired free of the mortgage bond. Supreme Court of Appeal The case of Legator McKenna Inc and Another v Shea and Others provides authority for the fact that even if the original cause of a transaction, which is registered in the Deeds Office, is defective, if there is a real agreement to transfer ownership and both parties have performed in terms of that agreement, then the transfer is valid. This is known as the abstract theory of passing ownership. In this case, Ms Shea was incapable of managing her own affairs on account of brain injury. Attorney McKenna was appointed as her curator during March 2002 and letters of authority were issued in June 2002, however, in April 2002, before receiving his letter of appointment he sold Ms Shea’s immovable property, under his capacity as curator, so as to pay Ms Shea’s debts. The transfer was registered in the Deeds Office on 27 July 2002. Ms Shea later improved and she was declared capable of managing her own affairs, whereafter she applied for an order for the return of her immovable property against repayment of the purchase price. The purchasers instituted a claim for damanges against the Curator for breach of his implied warranty that he was authorised to sell the property. Ms Shea succeeded in the court a quo and the sale and registration in the Deeds Office were declared void as Attorney McKenna did not have the authority to sell the property – the causa of the sale was void. The appeal court reversed the decision of the court a quo and applied the abstract theory. ************************************************************************************* The SA land registration system includes inter alia the following: Deeds Registries: government offices under the control of a ROD, where real rights in land are registered. There are deeds registries in: Jhb, Pta, Pmb, CT, KZN, Bloem, Vryburg, Kimberley, Nelspruit & Mthatha. Conveyancers: are attorneys who have written and passed conveyancing exams set by the Law Society, & have been admitted to practice by the HC. Land Surveyors: are persons with specialised survey qualifications. Before land may be registered in the deeds registry, it must be defined, measured and depicted on a plan/diagram with reference to its position in relation to the gridline coordinates.