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LPL – 4804 – SUMMARIES
S/U 1 – P 1 –OVERVIEW OF THE SOUTH AFRICAN LAND REGISTRATION SYSTEM
1. Differentiate between the positive and negative deeds registration systems.
A. A positive system implies the following:
a. The State guarantees to 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.
b. The State examines/investigates documentation and transactions for legality.
c. The State completes and maintains a register of title.
d. Register of title is linked to a cadastral system of maps and diagrams.
e. Transfer takes place when the register of title is annotated and any deeds are merely endorsed.
f. 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.
g. Linking of different transactions occurs
h. The State guarantees the accuracy of the deed register and is liable for shortcomings.
i. Such a deeds register is characterized by a high degree of state interference
(as for instance in the Torrens system, created by Sir Robert Torrens and which is
still being used in New Zealand and in New South Wales, Australia)
B. A negative system implies the following:
a. The State gives no guarantees to bona fide third parties regarding the accuracy of the
state deeds register.
b. The State simply records deed submitted at face value.
c. There is no examination of the deeds or investigation by the State prior to recording
d. 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.
e. There is usually no link to a cadastral system of maps and diagrams
, f. Third parties cannot rely on the accuracy of the State records, which might give an
inaccurate or incomplete picture
g. The State incurs no liability for inaccurate or incomplete records
h. There is minimal state interference (as for instance in the land registration system in the
Netherlands)
2. Discuss which system applies in South Africa, substantiate your choice with references to cases
a. In SA land registration is based on statute (Alienation of Land Act and Deeds Registries Act)
and is unique because it is nominally negative, but has some characteristics of a positive
system as well.
b. While the State 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 do rely on the correctness of the
information contained in the title and deeds registry records.
It is also unnecessary for SA titleholders to insure their rights in case a third party
should subsequently prove to have a better title to the property, as is the case with
other negative registration systems.
c. Barclays Nasionale Bank v Registrateur van Aktes – land which was subject to a mortgage
bond was transferred to a bona fide purchaser without the bond first being cancelled.
The court held that the mortgagee’s secured real right was not terminated by the
transfer, and that the transferee therefore acquired the land subject to the bond.
Until the mistake is discovered and rectified, the same principle will apply to all
subsequent transfers.
This means that the mortgagee’s rights remain intact to the detriment of subsequent
transferees although a number of subsequent transfers may have been registered.
d. Standard Bank v Breitenbach – relates to the reliability and completeness of deeds office
information.
There the court held that a mortgage bond that had erroneously not been endorsed on
the title deed of the land was in fact duly registered once the registrar had signed the
mortgage bond, and that a bona fide purchaser of the land therefore acquired the land
subject to the bond.
,e. Legato McKenna Inc v Shea (SCA) – following a motor vehicle 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 was appointed by the court as
curator in March 2002.
Then before receiving a letter of appointment from the Master, in April 2002,
McKenna sold Ms Shea’s immovable property to Mr and Mrs Erskine, in order to
pay Ms Shea’s pressing debts.
With his signature McKenna inserted the words “curator” and “Subject to the
approval of the Master”.
The Master’s appointment in favour of McKenna was issued in June 2002 and the
Master’s consent to the sale followed on 17 July 2002.
The transfer in favour of the Erskine’s was registered on 27 July 2002 and in March
2003.
Ms Shea recovered to such an extent that the court declared her once more capable of
managing her own affairs.
Approximately a year later Shea applied to court for, among others, an order for the
return of the immovable property against repayment of the purchase price.
The Erskines in turn instituted a conditional damage claim against McKenna for
R1.7m should the immovable property be returned to Shea, based on McKenna’s
breach of his implied warranty that he was authorized to sell the property.
In the court a quo Shea succeeded.
The sale was declared 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 definitively decided that the abstract theory of passing of
ownership applies in SA.
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.
NB** In terms of the abstract theory, there are 2 requirements for passing ownership:
1) Delivery: In the case of immovable property, this is effected by registration of
transfer in the Deeds office.
, 2) Real agreement: The intention of the transferor must be to transfer ownership and
the intention of the transferee must be to become the owner of the property.
Mc Kenna’s mistake about the validity of the sale had no effect on the
effectiveness of the real agreement.
In addition to other delictual or contractual remedies one may have against the conveyancer, a prejudiced
party may in some cases recover damages from the State under s 99 of the Deeds Registries Act. However,
the claimant must prove:
the loss resulted from an act or omission of a registrar or official employed in a registry
the act or omission was committed in bad faith or due to failure to exercise reasonable care and
diligence
3. Discuss the linking of deeds
a. Deeds that must be registered simultaneously for financial reasons, although prepared and
lodged by different conveyances, can be linked as a batch
b. By completing their lodgment covers in a specific way and
c. Lodged on the dame day in separate lodgment covers.
d. The deeds are then examined/checked together by the deeds office personnel as a batch and
are registered simultaneously as a batch.
e. The linked deeds are all deemed to be registered only when the last transaction in the batch
has been signed by the registrar.
3.1 why is it necessary, and
a. It is usually done because the finances of the various transactions are linked.
3.2 How it is done.
a. A number is allocated to each deed for execution or document for registration (sometimes
called units).
b. The nature of the different transactions and the linking of the deeds must be indicated by
the conveyancers on the front covers of all the linked deeds.
c. If the lodgment covers do not indicate a linking but instead each transaction cover shows
only a single transaction, the transactions will be registered individually.
d. If the covers of the entire linked batch of deeds do not correspond the deeds office,
personnel will be unable to match up the linked deeds and they will be returned to the
respective conveyancers with a note, “simuls not lodged”.
LPL – 4804 – SUMMARIES
S/U 1 – P 1 –OVERVIEW OF THE SOUTH AFRICAN LAND REGISTRATION SYSTEM
1. Differentiate between the positive and negative deeds registration systems.
A. A positive system implies the following:
a. The State guarantees to 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.
b. The State examines/investigates documentation and transactions for legality.
c. The State completes and maintains a register of title.
d. Register of title is linked to a cadastral system of maps and diagrams.
e. Transfer takes place when the register of title is annotated and any deeds are merely endorsed.
f. 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.
g. Linking of different transactions occurs
h. The State guarantees the accuracy of the deed register and is liable for shortcomings.
i. Such a deeds register is characterized by a high degree of state interference
(as for instance in the Torrens system, created by Sir Robert Torrens and which is
still being used in New Zealand and in New South Wales, Australia)
B. A negative system implies the following:
a. The State gives no guarantees to bona fide third parties regarding the accuracy of the
state deeds register.
b. The State simply records deed submitted at face value.
c. There is no examination of the deeds or investigation by the State prior to recording
d. 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.
e. There is usually no link to a cadastral system of maps and diagrams
, f. Third parties cannot rely on the accuracy of the State records, which might give an
inaccurate or incomplete picture
g. The State incurs no liability for inaccurate or incomplete records
h. There is minimal state interference (as for instance in the land registration system in the
Netherlands)
2. Discuss which system applies in South Africa, substantiate your choice with references to cases
a. In SA land registration is based on statute (Alienation of Land Act and Deeds Registries Act)
and is unique because it is nominally negative, but has some characteristics of a positive
system as well.
b. While the State 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 do rely on the correctness of the
information contained in the title and deeds registry records.
It is also unnecessary for SA titleholders to insure their rights in case a third party
should subsequently prove to have a better title to the property, as is the case with
other negative registration systems.
c. Barclays Nasionale Bank v Registrateur van Aktes – land which was subject to a mortgage
bond was transferred to a bona fide purchaser without the bond first being cancelled.
The court held that the mortgagee’s secured real right was not terminated by the
transfer, and that the transferee therefore acquired the land subject to the bond.
Until the mistake is discovered and rectified, the same principle will apply to all
subsequent transfers.
This means that the mortgagee’s rights remain intact to the detriment of subsequent
transferees although a number of subsequent transfers may have been registered.
d. Standard Bank v Breitenbach – relates to the reliability and completeness of deeds office
information.
There the court held that a mortgage bond that had erroneously not been endorsed on
the title deed of the land was in fact duly registered once the registrar had signed the
mortgage bond, and that a bona fide purchaser of the land therefore acquired the land
subject to the bond.
,e. Legato McKenna Inc v Shea (SCA) – following a motor vehicle 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 was appointed by the court as
curator in March 2002.
Then before receiving a letter of appointment from the Master, in April 2002,
McKenna sold Ms Shea’s immovable property to Mr and Mrs Erskine, in order to
pay Ms Shea’s pressing debts.
With his signature McKenna inserted the words “curator” and “Subject to the
approval of the Master”.
The Master’s appointment in favour of McKenna was issued in June 2002 and the
Master’s consent to the sale followed on 17 July 2002.
The transfer in favour of the Erskine’s was registered on 27 July 2002 and in March
2003.
Ms Shea recovered to such an extent that the court declared her once more capable of
managing her own affairs.
Approximately a year later Shea applied to court for, among others, an order for the
return of the immovable property against repayment of the purchase price.
The Erskines in turn instituted a conditional damage claim against McKenna for
R1.7m should the immovable property be returned to Shea, based on McKenna’s
breach of his implied warranty that he was authorized to sell the property.
In the court a quo Shea succeeded.
The sale was declared 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 definitively decided that the abstract theory of passing of
ownership applies in SA.
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.
NB** In terms of the abstract theory, there are 2 requirements for passing ownership:
1) Delivery: In the case of immovable property, this is effected by registration of
transfer in the Deeds office.
, 2) Real agreement: The intention of the transferor must be to transfer ownership and
the intention of the transferee must be to become the owner of the property.
Mc Kenna’s mistake about the validity of the sale had no effect on the
effectiveness of the real agreement.
In addition to other delictual or contractual remedies one may have against the conveyancer, a prejudiced
party may in some cases recover damages from the State under s 99 of the Deeds Registries Act. However,
the claimant must prove:
the loss resulted from an act or omission of a registrar or official employed in a registry
the act or omission was committed in bad faith or due to failure to exercise reasonable care and
diligence
3. Discuss the linking of deeds
a. Deeds that must be registered simultaneously for financial reasons, although prepared and
lodged by different conveyances, can be linked as a batch
b. By completing their lodgment covers in a specific way and
c. Lodged on the dame day in separate lodgment covers.
d. The deeds are then examined/checked together by the deeds office personnel as a batch and
are registered simultaneously as a batch.
e. The linked deeds are all deemed to be registered only when the last transaction in the batch
has been signed by the registrar.
3.1 why is it necessary, and
a. It is usually done because the finances of the various transactions are linked.
3.2 How it is done.
a. A number is allocated to each deed for execution or document for registration (sometimes
called units).
b. The nature of the different transactions and the linking of the deeds must be indicated by
the conveyancers on the front covers of all the linked deeds.
c. If the lodgment covers do not indicate a linking but instead each transaction cover shows
only a single transaction, the transactions will be registered individually.
d. If the covers of the entire linked batch of deeds do not correspond the deeds office,
personnel will be unable to match up the linked deeds and they will be returned to the
respective conveyancers with a note, “simuls not lodged”.
