LPL4804/201/1/2018

Tutorial Letter 201/1/2018 CONVEYANCING

LPL4804 Semester 1

Department of Private Law

This tutorial letter contains important information about your module.

DEFINE TOMORROW

Bar code

2

Dear Student In this tutorial letter we provide you with updates to the study guide and the DVD, the answers to the compulsory assignments and the self-assessment assignment. You should regard these comments on the assignments as guidelines to answering the questions and not as model answers. In addition, in this tutorial letter we provide brief guidance on the forthcoming examination. NB Any students who have unsuccessfully written the LPL4804 exam two or more times, please contact me directly so that I may assist you with your study summaries in terms of the unit-by-unit study guidelines provided in tutorial 101. Errata In the DVD, the transfer duty rates sliding scale indicated are outdated and should read as follows: - Up to a value of R900 000 no transfer duty is payable - Between value of R900 000 and R1 250 000 the transfer duty rate is 3% - Between value of R1 250 000 and R1 750 000 the transfer duty rate is 6% - Between value of R1 750 000 and R2 250 000 the transfer duty rate is 8% - Between R2 250 000 and R10 million the transfer duty rate is 11% - Above R10 million the transfer duty rate is 13% These rates apply to natural persons and legal persons equally. Unit 4 of your study guide, the answer to the last 4.2 activity, has lost some text. It should read

John Peters Identity Number xxxxxx xxxx xxx married in community of property to Jane Peters and Jim Jones Identity Number xxxxxx xxxx xxx married in community of property to Anne Jones practicing in partnership under the name of Jo-Ji Jewellers

Unit 6 par 2.2.10.2.5 of our study guide the amounts of R125 000 have been increased to R250 000.

In the glossary at the end of the study guide pages 298 and 299 have not printed

and are blank. I shall upload the relevant pages to “additional resources” on the Myunisa LPL4804 webpage.

SUGGESTED ANSWERS FOR COMPULSORY ASSIGNMENT 01

TRUE/FALSE QUESTIONS

1 A negative characteristic of the South African deeds registration system is that

deeds are registered on face value with minimal state intervention.

LPL4804/201

3

FALSE- this is not a characteristic of the South African deeds registration system.

On the contrary, section 3 of the Deeds Registries Act 47 of 1937 places a duty on

the registrar of deeds to check the deeds for legality. (1)

2 The South African deeds registration system does not guarantee that the state

deeds register is an authoritative record of the rights to defined units of land.

TRUE – since we have a negative registration system, the state does not

guarantee the veracity of the state records. (1)

3 In South African land registration, the state is never liable for the losses incurred by

innocent third parties as a result of incorrect deeds registry records.

FALSE – in terms of section 99 of the Deeds Registries Act 47 of 1937 the state

may be liable under specific limited circumstances. (1)

4 Linking of deeds by way of roman numerals will only have an impact if one of the

deeds in the batch is rejected.

TRUE – with both numeric and Roman numeral linking of deeds, if all the deeds are

correct, all the deeds in the batch will be registered simultaneously. However,

where one deed in a batch of simultaneous deeds is faulty, with numeric linking all

the linked deeds are rejected, whilst with Roman numeral linking the batch of deeds

will be de-linked and only the faulty deed will be rejected. The remaining deeds in

the batch will proceed to registration. (1)

5 Only attorneys, notaries and conveyancers as defined in section 102 of the Deeds

Registries Act 47 of 1937 may prepare deeds and or documents for lodgement at

the deeds registry in terms of Section 15A.

FALSE - refer to section 15 of the Deeds Registries Act 47 of 1937 where it refers

to “Except in so far as may be provided in any other law ….”. Then note that there

are a number of instances where specific legislation provides for state officials to

prepare deeds e.g. Agricultural Development Bank Act 15 of 2002 and SANRAL (1)

6 The registrar in charge of a particular deeds registry personally checks and

executes every deed that is lodged in that particular deeds registry.

FALSE – it is impossible for one person to check all the deeds in some of the busy

registries. For this reason regulation 5 provides that assistant or deputy registrars

may also exercise the registrar’s powers and duties (as per section 3 and 4 of

DRA) (1)

7 The registrar of deeds may refuse to register deeds that are not printed on A4 good

quality paper.

TRUE – refer to regulation 20(7). (1)

8 The preparation certificate on a deed of transfer may be signed by a notary or

attorney, provided it is countersigned by a conveyancer.

FALSE – Refer to section 15 and regulation 43(1) of the DRA and you will see that

deeds of transfer, mortgage bonds and certificates of title must be prepared by a

conveyancer (or under exceptional circumstances other person authorised by

legislation such as state officials). Attorneys and notaries may prepare powers of

attorney, applications, consents and certain agreements, if countersigned by a

conveyancer. (1)

4

9 When a deed is rejected by the deeds registry, the lodging conveyancer has three

days to correct and re-lodge it at the deeds registry.

FALSE – once a deed is rejected there is no time limit on the lodging conveyancer

for effecting the necessary corrections. (The time limit refers to the correction of

minor errors while the deed remains on “prep” at the deeds registry. Refer to

question 10 below.) (1)

10 When a transaction is on “prep the lodging conveyancer has a limited time within which the transaction must be registered. TRUE - If the correction of minor errors while the deed remains in the deeds office “on prep” takes too long, the deed will be rejected. In some deeds registries this time limit is 5 days, not 3.) (1)

[10]

SEMESTER 1 - COMPULSORY ASSIGNMENT 02

1 By way of example, explain the contents and purpose of the following clauses commonly found in mortgage bonds:

a) The preamble to the mortgage bond (2) ANSWER: Refer to page 201 par 2.2.3 of your study guide. b) The acknowledgment clause (2) ANSWER: Refer to page 202 par 2.2.4 of your study guide. c) The amount (3) ANSWER: Refer to page 203 par 2.2.6 of your study guide. The point of the question

is to encourage you to practice some legal drafting yourself. Naturally your attempts differed, but should read more or less as follows: “ And the mortgagor hereby acknowledges him/herself to be indebted to the mortgagee in the capital sum of R 1 000 000 (ONE MILLION RAND), which sum the mortgage undertakes to repay to the mortgagor in equal monthly instalments …”

d) The costs clause (3) ANSWER: Refer to page 207 par 2.2.10 of your study guide. Again your drafting may

differ, but should read more or less as follows: “The mortgagor further binds the herein mentioned property as security to a maximum amount of R…. for any costs and disbursements that the mortgagee may incur on behalf of the mortgagor in the recovery of the mortgagors debt in the realization of the security. This shall include but not be limited to legal costs, insurance premiums, ….”

Note that if you only explained what should be contained in the relevant clause, but did not provide an example, only half marks were awarded.

[10]

SUGGESTED SOLUTIONS TO THE

SELF-ASSESSMENT ASSIGNMENT 03 (PAST EXAMINATION PAPER)

LPL4804/201

5

QUESTION 1 Briefly discuss the following statements: 1.1 The South African deeds registration system is characterised by a high degree of

state interference. (4) ANSWER

- Despite the South African registration system being nominally a negative system there is a great deal of state interference or intervention.

- In the South African system the registrar is obliged in terms of section 3 of the Deeds Registries Act 47 of 1937, to check the deeds for registrability and reject deeds if they do not conform.

- The registration system is linked to state cadastral system. - The registration system requires municipal rates clearances from local authorities

and transfer duty receipts or exemptions from the South African Revenue Services. 1.2 The limited state liability for incorrect data in the South African deeds registration

system in terms of section 99, illustrates both positive and negative characteristics. (4) ANSWER - Section 99 of the DRA provides that the state and or the registrar/official will be

liable for incorrect data where they were either mala fide - or failed to exercise reasonable care and diligence. - This is a positive characteristic in the sense that the state does accept some liability

although South Africa has a negative registration system. - However, simultaneously the fact that the state liability is so limited and defined,

and not a general acceptance of state liability, is a negative characteristic. 1.3 The preparation certificate of a deed of transfer must always be signed by a

conveyancer before lodgement of the deeds in the deeds registry. (4) ANSWER - The general rule is that draft deeds of transfer must have a preparation certificate

signed by a conveyancer before lodgement. - The conveyancer who signs the preparation certificate takes responsibility for the

correctness of the deed. - However, exceptions to this rule are government officials and land bank officials

who may also sign the preparation certificate of a deed of transfer. - Likewise, attorneys practicing in the former Transkei before 1997 may sign the

preparation certificate of a deed of transfer as they are included under the definition of a conveyancer in the Deeds Registries Act 47 of 1937.

(Deeds of transfer may not be prepared by an attorney or notary, unlike powers of attorney, consents and documents that may.) 1.4 A transfer by endorsement in terms of section 45, 45bis(1)(a), 45bis(1)(b),

45bis(1A)(a) and (b) of the Deeds Registries Act 47 of 1937 is always preceded by the death of a half-share owner. (4)

ANSWER Although section 45 provides for transfer by endorsement where one of spouses

6

married in community of property (COP) dies and the survivor acquires the deceased's half share, death is not a requirement for: - section 45bis(1)(a) where spouses married in COP get divorced and one spouse

acquires the property; - section 45bis(1)(b) where spouses married in COP stay married but court orders

transfer of the property to one of the spouses, perhaps as a result of changing their marital property regime;

- section 45bis(1A)(a) where the spouses married in COP get divorced and both jointly acquire the property;

- section 45bis (1A)(b) where the spouses married in COP continue with the marriage but both jointly acquire ownership of the property.

1.5 A covering bond may also be a notarial bond. (4) ANSWER The answer I expected according to the information in the study guide was that: - since a covering bond is over immovable property - while a notarial bond is always over movable property, - it cannot be both a covering bond and a notarial bond. However, on reconsideration it occurred to me that a notarial bond over movables can also secure either an existing or a future fluctuating debt. Such a notarial bond over movables would then be both a notarial and a covering bond, as opposed to covering mortgage bonds that bind immovable property. Thus, either of the above answers will be awarded marks. [20] QUESTION 2 2.1 Draft the vesting clauses for a deed of transfer where the transferees are the

following: a) a man who is a spouse in a customary marriage (6)

ANSWER (* for mark allocation) a) Peter Nkosi* Identity number ………………….* Married* which matrimonial property system is governed by the customary law* in

terms of the Recognition of Customary Marriages Act 120 of 1998.* (The above answer is as per the study guide. However the constitutional court case of Gumede v President of the Republic of South Africa 2009(3) BCLR 243 (CC) held that customary marriages, whether entered into before or after the Recognition of Customary Marriages Act are in community of property, unless an antenuptial contract is concluded by the spouses. Following on that court decision, the registrar has issued a circular that the deeds office will accept citations for customary marriages as married in community of property. Hence, marks will also be awarded for vesting clauses as follows: - Peter Nkosi* Identity number ….. *married in community of property* to Suzy

Nkosi*, or - Peter Nkosi* Identity number …..* and Suzy Nkosi* Identity number ….* married in

community of property to each other.*)

b) Piega and Jones who as driving instructors and do business in a close corporation (4)

LPL4804/201

7

ANSWER Piega and Jones* driving instructors* CC* Number* 1992/123/23*

2.2 Briefly discuss the contractual capacity of minor (unmarried) persons relating to the

transfer of immovable property. (10) ANSWER - Minors under the age of 7 have no contractual capacity. - Both parents - or minor’s guardian signs on minor’s behalf. - Minors between the ages of 7 and 18 have limited contractual capacity. - Such minors must be assisted by both their parents or their guardian. This means

the minor can sign, but both parents or guardian must assist. - Alternatively, both the parents or the guardian can sign the power of attorney on

behalf of the minor. - In addition to the above, either the Master of the High Court or the Court itself must

consent to the alienation of immovable property of a minor. - The High Court consent if needed if the value of the property exceeds R250 000, - While Master’s consent will suffice if the value is less than R250 000 - When minors turn 18, gets married or is declared a major/emancipated they have

full contractual capacity and can deal with the property without any assistance. (10) [20]

QUESTION 3 3.1 List and discuss four different types of certificates of registered title as provided for

by the Deeds Registries Act 47 of 1937. (16) ANSWER Students may discuss any four of the certificates of registered title dealt with in unit 8 for 4 marks each. 3.2 Explain the purpose and effect of a cession of a mortgage bond. (4) [20] ANSWER - a cession of a mortgage bond is a transfer of rights from bondholder (cedent) to

another person (cessionary) - to claim payment of the debt and realize the security - with an out and out cession the original bondholder is completely disengaged from

the bond and no has any rights to the security - with a cession for security the bond may be ceded back to original bondholder once

bondholder has paid his debt to the third person (cessionary) (Note: the main point I want to see in the students’ answers is that they realize that with a cession of a bond it is the bondholder (financial institution) that is substituted and not the debtor/mortgagor.)

QUESTION 4 Critically discuss the prescribed case of Legator McKenna Inc and Another v Shea and Others 2010(1) SA 35 SCA (20)

[20]

8

The facts were briefly that 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 Attorneys was appointed by the court as curator in March 2002. Then, before receiving a letter of appointment from the Master of the High Court, 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 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 followed 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 once more declared her capable of managing her own affairs. Approximately a year later Ms Shea applied to court for, amongst 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 Ms Shea, based on McKenna's breach of his implied warranty that he was authorised 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 definitively decided that the abstract theory of passing of ownership applies in South Africa. Thus 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.

Implications for application of technical principles decided in this case could also have been discussed.

QUESTION 5 5.1 Distinguish between the variation of the terms of a mortgage bond in terms of

section 3(1)s of the Deeds Registries Act 47 of 1937 and an application for rectification of a mortgage bond in terms of section 4(1)(b) of the Deeds Registries Act 37 of 1937. (8)

ANSWER - The variation of a mortgage bond in terms of sec 3(1)(s) occurs where, a bond

which was correctly registered, - is simply varied by agreement between the parties - due to changed circumstance after registration. - The registrar will refuse to register a variation agreement changing the character of

the bond, cause or amount of the debt, the mortgaged security, the additional amount (costs clause) or deletion of a covering bond term. A new mortgage bond will have to be registered.

- However in terms of section 4(1)(b) if a mistake that was made at the time of registration, may be rectified,

- provided this does not amount to a transfer of rights. For example, changing the citation of the mortgagor as unmarried where he was previously described as married in community of property.

- The difference between the two is that in terms of section 4(1)(b) an error has

LPL4804/201

9

occurred - whereas in terms of section 3(1)(s) conditions are being deliberately changed by

agreement. 5.2 Explain as you would to a client, the registration process or flow through of a batch

of deeds through the deeds office up to date of execution by the conveyancer before the registrar of deeds. (12)

ANSWER The answer will vary from student to student, but should include the following: 1 lodgement with lodgement slips at deeds office in lodgement covers, which are

scanned and linked in batches for simultaneous checking and registration; 2 deeds go to data section for scanning and data printouts with details of owner and

property as per current deeds office records (including any interdicts against the owner/person or property);

3 deeds go to the sorting room – scanning and evaluation of degree of difficulty of the batch of deeds, then distributed to deeds examiners /deeds controllers in equivalent quotas;

4 deeds go to deeds controllers who do first examination, put endorsements and stamps on deeds, check interdicts and make notes of any discrepancies or errors;

5 deeds controllers return their quota of deeds to the sorting room where the deeds are distributed in equivalent quotas the chief deeds controllers;

6 chief deeds controllers again examine deeds for legal compliance and make further notes for rectification, where after they reject or pass the batch of deeds;

7 passed deeds go to assistant registrar for a final check and rejected deeds go back to counter for collection by lodging conveyancer (for correction and re-lodgement);

8 passed deeds go to prep counter where conveyancer has three days to correct any errors and have notes removed by deeds controller. If not done, deeds are rejected and returned to conveyancer for re-lodgement;

9 if the passed deeds have no notes or notes have been removed/cancelled, the deeds are black booked i.e. checked for any recent interdicts that may prohibit the registration of the transaction;

10 after final interdict check, if the deeds are clear they go forward to executions, so that conveyancer may execute (sign) the deed in the presence of the registrar of deeds, together with any simultaneous transactions in the batch.

Once the registrar also signs the last deed in the batch the whole batch of deeds is deemed to be registered at the same time. [20] TOTAL: 100

EXAMINATION PREPARATION FOR MAY/JUNE 2018 AND

SUPPLEMENTARY OCTOBER/NOVEMBER 2018 EXAMINATION

NB: Check timeously that you are eligible to write the examination in this

module, in other words, that your compulsory assignments have been received, assessed and recorded by Unisa.

10

Please note that Tutorial letter 101 contains detailed unit-by-unit guidelines as to what is important for this subject. Simply learning the answers to some old exam question papers will not suffice, since I do ask some new questions in every exam paper. The examination paper will include short questions taken from various places in the study guide. Therefore, you cannot skip any part of the study guide.

- NB THERE WILL BE FIVE MULTIPLE CHOICE QUESTIONS unlike previous years. The reason is partly that students find it difficult to complete a 100-mark exam paper in 2 hours, so I hope the inclusion of 5 multiple choice questions of 4 marks each, totalling 20 marks will address this.

- It is important as a conveyancer, to be able to identify the owner of a property i.e. the person or persons who may deal validly, legally deal with a property, and in turn instruct a conveyancer i.e. study the DRA definition of an owner.

- The conveyancer and his/her responsibilities and duties during the course of a transfer are important parts of the study guide, as well as the powers and liability of the Registrar of Deeds.

- The prescribed form E deed of transfer and extending clauses, vesting clauses and the contractual capacity of various transferors are crucial aspects of conveyancing.

- Transfers by endorsement and certificates of registered title are a difficult, but important aspect of conveyancing, as are section 4(1)(b) corrections of deeds.

- Mortgage bonds generally are important and the last part of the paper contains various short questions on bonds.

English is the medium of tuition for this subject. However, as in the case of the assignments, Afrikaans students may answer the questions in the examination paper in Afrikaans, although the examination paper will not be available in Afrikaans. We reiterate that your exam revision should focus on the study guidelines contained in tutorial letter 101, which we repeat below for your convenience.

UNIT 1

You must be able to differentiate between the positive and negative deeds

registration systems, discuss which system applies in South Africa, and substantiate your answer with reference to both positive and negative characteristics of the South African deeds registration system.

You should also be able to discuss the linking of deeds, why it is necessary, and how it is done (see also unit 2 in this regard).

UNIT 2 You must be able to define/explain what it entails to become a conveyancer,

and list and describe the duties of a conveyancer. In addition, you should have a good working knowledge of who may prepare deeds and documents for lodgement at a deeds registry and what the preparer of the deed takes responsibility for (see sections 15, 15A, and 102, and regulations 43, 44 and 44A). Also take note of who may lodge deeds at a deeds registry. You should be able to indicate which documents must be prepared by a conveyancer, and which documents may also be prepared by an attorney or notary. The general format requirements that all deeds lodged at the deeds office must comply with are important.

LPL4804/201

11

UNIT 3 You should be able to discuss the duties and powers of the registrar of deeds,

as well as the liability of the registrar of deeds and conveyancer (see sections 3(1)(b), 15A and 99).

An overview of the registration process/flow through the deeds office will

suffice, although you should note the period of time within which deeds must be registered (see regulation 45).

UNIT 4 The analysis of a deed of transfer is very important, and you must be able to

identify and list the clauses contained in a deed of transfer and discuss the information that is contained in each of these clauses. The definition of owner is important in conveyancing, as it determines who may deal with the property and instruct the conveyancer to register the particular transaction (contractual capacity discussed in unit 5 is closely related to this). When you study the descriptions of transferors and transferees in the preamble and vesting clause of the deed of transfer, as indicated in the study guide, you do not need to learn all the possible variations, but should at least know those that occur most frequently marked “NB” in the schedule.

UNIT 5 An overview of this unit will suffice, although you should be able to list and

briefly describe the supporting documents to be lodged with a deed of transfer (power of attorney, transfer duty receipt/exemption, rates clearance certificate, special consents, and insolvency affidavits).

With regard to the power of attorney and the ownership issue referred to

above, it is imperative that you can discuss the contractual capacity of the following and know who must pass transfer of the land:

(i) a minor (ii) a deceased person with reference to the joint estate (iii) insane persons (iv) partnerships (v) trusts (mortis causa and inter vivos) (vi) insolvent persons (vii) married persons (in community, foreign marriages and customary

marriages) (viii) liquidated companies

UNIT 6 You should be able to distinguish between the types of estate transfers and

their respective requirements (paragraphs 2.2.1 to 2.2.10), although we do not expect you to know the supporting documents for each. The information to be included in an estate transfer causa is important.

12

You must know what the purpose is of a partition transfer and the

circumstances that must prevail for such a transfer to be registered. Focus also on the dealings with the mortgage bonds and other limited real rights where a partition transfer is registered (see sections 27 and 28).

You must know what an expropriation transfer is and why it is not a transfer in

the true sense of the word. What dealings may still be done with land that has been expropriated in toto or only in part?

For transfers by virtue of an order of court and deeds of grant, a mere

overview will suffice. However, you should note the type of land to be transferred by way of a deed of grant, being unalienated state land and distinguish that from acquired state land.

UNIT 7 You can expect the following possible question: “Discuss under what circumstances land may be transferred by virtue of an

endorsement in terms of: section 16 section 24bis (2) section 25(3) section 58(2)” The latter half of this unit is very important and you can expect a question on

the applications in terms of section 45, 45bis1(a), 45bis1(b), 45bis(1A)(a) or 45bis(1A)(b). You must be able to differentiate under what circumstances the five applications will be brought.

You need not study the supporting documents lodged with the registrar of

deeds. UNIT 8 The certificate of consolidated title is important and an in-depth study of the

requirements is required. Regarding the other certificates of registered title, we expect you to know what these are and what differentiates them from one another for about two marks each. The following is a possible question which may emanate from this unit:

“Discuss the circumstances which must prevail before a registrar of deeds will

issue, to an owner of land, a certificate of registered title in terms of:

(i) section 18 (ii) section 34(1) (iii) section 34(2) (iv) section 35 (v) section 36 (vi) section 38 (vii) section 39(1)

LPL4804/201

13

(vii) section 39(2) (viii) section 43”

UNIT 9 Students must have a good working knowledge of all the clauses contained in

a conventional mortgage bond and of the purpose of each of the clauses, particularly the costs clause and the ranking clause.

You should be familiar with the waivers of all the legal exceptions, since you

will come across them in practice. Students must be capable of indicating why the mortgagee will require a mortgagor to waive the exceptions, and in respect of what type of bond each of the exceptions could possibly be waived.

Title conditions which may impact on the mortgage bond (e.g. usufructs and

fideicommissums) and conditions which may not be incorporated in a bond must be studied well, with specific reference to the authority that disallows the incorporation of such conditions in a mortgage bond.

Students must be capable of differentiating between the following types of

bonds, that is, discuss under what circumstances or for what reason the following bonds will be registered:

(i) collateral bond (ii) surety bond (iii) covering bond (iv) kustingsbrief (v) judicial mortgage (vi) sectional mortgage bond (vii) participation mortgage bond (viii) a kinderbewys bond

UNIT 10 Students must be able to discuss:

(i) cancellations (ii) releases (iii) cessions of bonds – out and out as well as for security (iv) under what circumstances a substitution of debtor will be effected in

terms of section 24bis(3), section 45(2)(c) and section 57 (v) when a debtor cannot be substituted in terms of section 57 (vi) the provisions of section 56 of the Act, more specifically the instances

when it is unnecessary to lodge bonds for disposal (vii) when a part payment and when a reduction in cover will be registered,

and against what type of bonds (viii) what effect a waiver of preference has on a prior registered bond and

what effect a pari passu ranking has on the ranking of subsequent bonds

(ix) what may and what may not be varied in a bond in terms of an agreement under section 3(1)(s) of the Act

14

The analysis of the consents need not be studied.

UNIT 11 Section 14 of the Deeds Registries Act 47 of 1937 is the pivot of our

registration system and students must be able to explain why it so important from a registration point of view.

Paragraph 3.1 deals with the exceptions to the general rule that transfers must

be registered in the same sequence as the transactions giving rise thereto. These exceptions contained in section 14(1)(b) of the Deeds Registries Act 47 of 1937 and other legislation must be studied with a view to possible short questions.

Section 4(1)(b) of the Act is of importance and students must be able to

indicate when an error in registration can/cannot be amended in terms of section 4(1)(b), and when such a rectification will have the effect of transferring a real right.

The rest of the sundry applications contained in this unit must merely be

studied in order to explain when the application will be brought, that is, the circumstances that require the application.

The supporting documents need not be studied.

Positive land registration systems

Negative land registration systems

The State guarantees to bona fide third parties that the state register is an authoritative record of the rights to clearly defined units of land

The State gives no guarantee to bona fide third parties regarding the accuracy of the state deeds register

The State examines/investigates documentation and transactions for legality

There is no examination of the deeds or investigation by the State prior to recording

The State completes and maintains a register of title

The State simply records deeds submitted at face value

Register of title is linked to a cadastral systems of maps and diagrams

There is usually no link to a cadastral system of maps and diagrams

Transfer takes place when the register of title is annotated and any deeds are merely endorsed

Transfer is effected in the new deed, not in the state register, so a new deed must be executed for each transaction

New deeds are not necessary for each transaction as the main source of information (the register)

Third parties cannot rely on the accuracy of the state records, which might give an inaccurate or

LPL4804/201

15

We further include below some questions and answers from previous discussion

forums that you might find helpful. Below see the student queries together with my replies IN UPPER CASE under unit number headings.

UNIT 1

A student sent me the following summary of a positive and negative land registration system, together with her analysis of the South African Land registration system. See my comments below in UPPER CASE

In South Africa, land registration is unique because it is nominally negative,

having some characteristics of a positive system as well.

While the state does not guarantee the correctness of data contained in the SA

deeds registries, it does not simply record deeds at face value either – it provides

owners 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 unnecessary for SA titleholders to insure their rights in case a third party should

subsequently prove to have a better title to the property.

There is a high degree of state interference.

The SA deeds register is linked to a cadastral system of maps and diagrams.

SEE CHARACTERISTICS OF POSITIVE SYSTEM ABOVE – WHICH OF THOSE APPLY TO SA AS WELL? SOME OF THOSE POSITIVE CHARACTERISTICS LINK UP WITH WHAT YOU HAVE LISTED. FOR INSTANCE: IN A POSITIVE SYSTEM THE STATE GUARANTEES THAT IT’S RECORD IS AUTHORITATIVE. IN SOUTH AFRICA THE STATE DOES NOT GUARANTEE, BUT DOES INCUR LIABILITY IN CERTAIN CIRCUMSTANCES TOGETHER WITH THE CONVEYANCER. SO, THIS LEADS TO THIRD PARTIES RELYING ON THE SA DEEDS INFO AS LISTED IN YOUR SECOND BULLET ABOVE. THE POINT I AM TRYING TO MAKE IS THAT THE ITEMS YOU HAVE BULLETED ABOVE ARE RATHER THE RESULTS OF THE POSITIVE CHARACTERISTICS. RELOOK AT THE POSITIVE CHARACTERISTICS LISTED ABOVE.

is merely annotated incomplete picture

Linking of transactions occurs The State incurs no liability for inaccurate or incomplete records

The State guarantees the accuracy of the deed register and is liable for shortcomings

Parties often guarantee their rights by taking out private insurance

The register is characterised by a high degree of state interference

There is minimal state interference

16

UNIT 5 – DECEASED ESTATES

Answer: ADIATION IS WHERE THE SURVIVOR OF A MASSING ARRANGEMENT IN A WILL, HAS THE OPPORTUNITY TO DECIDE IN WRITING, WHETHER TO ACCEPT THE MASSING ARRANGEMENT I.E. SURRENDER HIS OR HER OWN PROPERTY TO BE DEALT WITH IN TERMS OF THE MASSING TOGETHER WITH THE DECEASED PERSONS PROPERTY, AND THEN TO BENEFIT IN TERMS OF THAT SAME WILL. OR, WHETHER TO REFUSE TO PROCEED WITH THE MASSING ARRANGEMENT, RETAIN OWNERSHIP OF HIS OR HER OWN ASSETS, BUT IN THE PROCESS ALSO FOR FEIT ANY BENEFIT HE OR SHE MAY HAVE ENJOYED IN TERMS OF THAT WILL.

Where parties had separate estates and they made provision for the property called X (OWNED BY THEM JOINTLY) to be transferred to a person, is it that only the part of the property owned by the DECEASED (NOT estate, BECAUSE IT COULD BE A JOINT ESTATE) will be free from transfer duty, but not the part still owned by the surviving spouse?

Answer: YES

Does this mean the Transfer Duty Act and the Administration of Estates Act is also prescribed material in this course? The tutorial letters says we only need to know the Deeds Registries Act.

Answer : NO, THE TUTORIAL LETTER SAYS YOU SHOULD KNOW THE STUDY GUIDE AND THE DEEDS REGISTRIES ACT AND THE STUDY GUIDE DEALS VERY BRIEFLY WITH TRANSFER DUTY AND SOME ASPECTS OF DECEASED ESTATES. IDEALLY I WOULD LIKE TO PRESCRIBE THE TRANSFER DUTY ACT AS WELL AND MY PREVIOUS (DEEDS OFFICE EMPLOYEE) STUDENTS DID HAVE TO STUDY BOTH TRANSFER DUTY AND ADMINISTRATION OF ESTATES AS SEPARATE SUBJECTS, BUT IN A SIX MONTH MODULE THERE IS NOT ENOUGH TIME. I CAN ONLY GIVE YOU SUCH INFO ABOUT TRANSFER DUTY AND ESTATES AS YOU ABSOLUTELY NEED TO KNOW.

Where the parties had joint estates, the share of the property owned by the deceased is now part of the estate of the surviving spouse (ARE YOU SAYING THAT THE DECEASED’S SHARE IS BEING TRANSFERRED TO THE SURVIVING SPOUSE?)… I understand now that the transferor will be the executor and the surviving spouse together YES, but is transfer duty still payable on the portion owned by the surviving spouse?

Answer: IF THE DECEASED’S HALF SHARE IS BEING TRANSFERRED TO THE SURVIVING SPOUSE, THEN FIRST OF ALL ONLY THE EXECUTOR NEED DO THE TRANSFER, SINCE IT IS ONLY THE DECEASED’S SHARE AND, IN SUCH AN INSTANCE, BECAUSE IT IS ONLY THE DECEASED’S PROPERTY BEING TRANSFERRED, THEN NO TRANSFER DUTY IS PAYABLE (SEC 9 OF TRANSFER

Problem 1 under paragraph 3 activity that deals with massing of estates.

I have been looking at how the sentence is phrased, when you refer to massing of separate estate. I know it was a marriage out of COP, and when you refer to massing of joint estates, I know I it was a marriage in COP. ANY TWO PEOPLE CAN MASS THEIR ESTATES – IT DOES NOT MATTER IF THEY ARE MARRIED IN COP, OUT OF COP OR NOT MARRIED ALL. HOWEVER, TYPICALLY IT WILL HAPPEN BETWEEN MARRIED PERSONS

What does it mean to adiate?

LPL4804/201

17

DUTY ACT – EXEMPTIONS). HOWEVER, IF THE DECEASED’S HALF SHARE AND THE SURVIVORS HALF SHARE ARE BOTH BEING TRANSFERRED TO ANOTHER PERSON, THEN YOU ARE CORRECT, BOTH EXECUTOR AND SURVIVOR NEED TO EFFECT TRANSFER AND YES, THEN TRANSFER DUTY IS PAYABLE ON THE SURVIVOR’S HALF SHARE THAT IS BEING TRANSFERRED.

ANSWER: IT CANNOT BE TRANSFERRED IN TERMS OF THE MATRIMONIAL PROPERTY ACT, SINCE THE HALF SHARE THAT SUSAN BOTES OWNS AS A RESULT OF THE MATRIMONIAL PROPERTY ACT WILL ALREADY BE HERS

E.g. wife married out of COP, property registered in her name, she together with her husband at the time mass their estates on the first dying of them and the property according to their mutual will must be transferred to their son Z. when the husband

Problem 2 – No transfer duty payable, but VAT is

I understand that the transferor has to pay VAT on a property when he sells (ONLY IN SPECIFIC INSTANCES – WHERE THE SELLER IS REGISTERED AS A VAT VENDOR AND THE PROPERTY BEING SOLD IS SOLD IN THE COURSE OF HIS BUSINESS EG A PROPERTY DEVELOPER. IF HOWEVER I AM A VAT VENDOR FOR A BUSINESS SELLING BUTTONS, THEN WHEN I SELL MY PERSONAL HOUSE, VAT WILL NOT BE PAYABLE), what about the purchaser, does it still have to pay transfer duty?

Answer: WHERE VAT IS PAYABLE ON THE SALE OF IMMOVABLE PROPERTY, THEN NO TRANSFER DUTY IS PAYABLE BY THE PURCHASER – THERE IS A PRINCIPLE AGAINST DOUBLE TAXATION AND PAYING BOTH VAT AND TRANSFER DUTY WOULD AMOUNT TO DOUBLE TAXATION. (AS A GENERAL RULE, VAT IS PAYABLE BY THE VENDOR/SELLER/TRANSFEROR, UNLESS CONTRACTUAL AGREED TO THE CONTRARY.)

For e.g. Vat vendor who dies and owned property, bequeaths this property to his son, inherited property is being transferred here. Therefore it is exempt from transfer duty. AS EXPLAINED ABOVE, IF THE PROPERTY WAS PART OF THE BUSINESS AND IS SOLD, THEN VAT IS PAYABLE. IF IT INHERITED NO VAT AND NO TRANSFER DUTY.

Lastly what about inheritance between spouses of property if they were married in and out of COP. Is it also free from transfer duty as it is being inherited? YES, BECAUSE IN SUCH A CASE THE TRANSFER IS AUTOMATICALLY ALWYS JUST PROPERTY THAT USED TO BELONG TO THE DECEASED ESTATE, AND AS SUCH IS EXEMPT FROM TRANSFER DUTY. This seems like a donation between spouses ? WELL NO, BECAUSE AS SOON AS SOMEON DIES THE MARRIAGE ENDS. Please can you also advise me what is the correct way of citing the causa in a situation like this. I have tried this on my own and get …

The appearer declared that the HEREINMENTIONED property, formed part of the joint estate of Ben Botes and Susan Botes, who were married to each other in Community of property and is to be transferred to Susan Botes in terms of THE LAST WILL AND TESTAMENT DATED ….. /THE INTESTATE SUCCESSION ACT ……SEC….the Matrimonial Property Act.

( AND PROBABLY REGISTERED IN HER NAME) AT THE TIME OF THE DEATH OF BEN BOTES. IT IS THEREFORE ONLY BEN BOTES’S HALF SHARE BEING TRANSFERRED TO HER, AND THAT MUST BE BY INHERITANCE (TESTATE OR INTESTATE) OR A PURCHASE.

18

dies, the property is about to be registered. Please explain whether I am correct in saying no mention needs to be made as to the executor as the property in the deed (only the wife as widow also transferor) as it was not the husbands property and therefore the estate has nothing to do with this transfer?

Answer: YOU ARE ABSOLUTELY CORRECT! THE EXECUTOR IS NOT INVOLVED, HOWEVER IN THE CAUSA EXPLAINING WHY THE PROPERTY IS BEING TRANSFERRED, ONE WOULD OBVIOUSLY REFER TO THE MASSING, DEATH ETC.

Answer: I WILL TRY TO EXPLAIN BY EXAMPLE. X, Y AND Z OWN “BIG FARM” JOINTLY UNDER ONE DEED OF TRANSFER T111/2008. NOW THEY DECIDE TO PARTITION IT SO THAT EACH WILL HAVE HIS/HER OWN PIECE OF BIG FARM. THE X, Y AND Z WILL THEN, WITH THE HELP OF THE CONVEYANCER TRANSFER PORTION 1 OF BIG FARM TO X UNDER NEW DEED OF TRANSFER T0001/2009. X, Y AND Z WITH THE HELP OF THE CONVEYANCER WILL TRANSFER PORTION 2 OF BIG FARM TO Y UNDER NEW DEED OF TRANSFER 0002/2009 AND SIMILARLY THEY MIGHT TRY TO TRANSFER PORTION 3 OF BIG FARM TO Z. BUT THEN DEED OF TRANSFER 111/2008 WILL BE EXHAUSTED AND DEFUNCT, WHICH IS NOT ALLOWED, SO WHAT WILL GENERALLY HAPPEN IS THAT Z WILL THEN CONTINUE TO HOLD “THE REMAINING EXTENT”, WHICH IS IN EFFECT PORTION 3, UNDER T111/2008 – THE ORIGINAL TITLE DEED.

UNIT 6

This student thought that there was a contradiction in the study guide relating to spouses, massing and transfers of immovable property.

Where land is registered in the name of a surviving spouse who was married to the

deceased out of community of property and massing of the estates has taken

place, the registered owner must pass transfer, not the executor.

REMEMBER WHERE PARTIES ARE MARRIED OUT OF COMMUNITY OF PROPERTY THE WIFE IS OWNER OF HALF IN HER OWN NAME AND THE HUSBAND IS OWNER OF HALF IN HIS OWN NAME. THEY MAY THEN STIPULATE IN A WILL THAT ON THE DEATH OF THE FIRST DYING, THEIR ESTATES MUST BE MASSED AND THEIR CHILD WILL INHERIT THE LAND, SUBJECT TO USUFRUCT OF SURVIVING SPOUSE. IN SUCH CIRCUMSTANCES, ON THE DEATH OF THE HUSBAND, THE WIFE (SURVIVING SPOUSE) MUST TRANSFER HER SHARE OF THE PROPERTY TO CHILD, WHILE THE EXECUTOR MUST TRANSFER LATE HUSBAND’S SHARE

Problem 3 – Partition transfers

I know exactly how partitions work, and have no problems with the definition but got confused when I read a deed of partition , the wording… principals hereto held and possessed in joint ownership erf 48, held under title deed Txxxx/2008, reg div, FP, Province of ….. in extent of 3000 sqm to be partitioned, giving the share held by the transferee? DON’T GET INTO THE DETAIL TOO MUCH THERE – I INCLUDED IT SO THAT YOU HAVE EXAMPLES IF AND WHEN YOU MIGHT HAVE TO DEAL WITH IT IN PRACTICE, BUT FOR NOW AND FOR THE EXAMS I NEED A MORE OVERALL AND GENERAL UNDERSTANDING OF THE CONCEPT – NOT THE DETAILS OF THE AGREEMENT OF PARTITION. I know each co- owner will have a deed of partition but there may only be one deed of transfer. The conveyancer is acting for each co-owner. Who is the transferee the person receiving that client’s portion from the others?

LPL4804/201

19

OF THE PROPERTY TO CHILD, BOTH TRANSFERS OF COURSE SUBJECT TO THE USUFRUCT.

Where land to be transferred formed an asset in a joint estate, the surviving spouse

of the deceased must always be joined in his personal capacity with the executor of

the estate of the deceased spouse, WHERE THE PARTIES ARE MARRIED IN

COMMUNITY OF PROPERTY, THE LAND WILL BE REGISTERED IN BOTH

THEIR NAMES AS PART OF THE JOINT ESTATE. IF ONE OF THEM SHOULD

DIE, THE EXECUTOR ADMINISTERS THE JOINT ESTATE SO YOU WOULD

EXPECT THAT THE EXECUTOR COULD DO THE TRANSFER ON BEHALF OF

BOTH SPOUSES. BUT NO, THE SURVIVING SPOUSE MUST STILL BE CITED

SEPARATELY AND CO-SIGN THE POWER OF ATTORNEY WITH THE

EXECUTOR TO TRANSFER –

Except: THESE EXCEPTIONS ALL RELATE TO SITUATIONS WHERE EITHER THE SURVIVING SPOUSES RIGHTS ARE NOT REALLY IMPACTED, OR SHE HAS IN FACT ALREADY CONSENTED TO THE TRANSFER OF HER HALF SHARE, OR WHERE SHE ACTUALLY HAS NO CHOICE:

1) Where the executor is only dealing with the share of the deceased spouse I.E.

ONLY THE DECEASED SPOUSES HALF SHARE IS BEING TRANSFERRED, or

2) Where the land has been sold to pay the debts of the joint estate I.E THE

SURIVING SPOUSE HAS NO CHOICE, THE LAND MUST BE SOLD TO PAY

THE ESTATE DEBTS, or

3) Where there has been a massing of the joint estate and the surviving spouse has

adiated, I.E. THE SURVIVING SPOUSE HAS ALREADY, AFTER DEATH OF

FIRST DYING, ELECTED IN WRITING TO ACCEPT THE MASSING OF THE

ESTATE, EVEN THOUGH IT WILL MEAN THAT HER HALF SHARE OF THE

PROPERTY WILL BE TRANSFERRED AWAY IN THE PROCESS or

4) Where the transfer is in favour of the surviving spouse, I.E. SURVIVING SPOUSE

IS GETTING TRANSFER, SO SHE CANNOT BE PREJUDICED or

5) Where the surviving spouse has signed, as executor I.E. SHE HAS ALREADY

SIGNED THE TRANSFER AS EXECUTOR, SO IT WOULD BE FUTILE TO HAVE

HER SIGN TRANSFER AGAIN AS SURVIVING SPOUSE.

IT OCCURS TO ME THAT POSSIBLY, YOU DO NOT REALLY UNDERSTAND

MASSING, THAT IS WHY YOU HAVE TROUBLE WITH THIS PART OF THE WORK. MASSING CAN BE BETWEEN ANY TWO OR MORE PEOPLE, NOT ONLY BETWEEN COUPLES MARRIED IN COMMUNITY OF PROPERY. THE TWO (OR MORE) PEOPLE THEN STIPULATE IN A JOINT WILL THAT ON THE DEATH OF THE FIRST DYING, THEY WILL ALL LOSE INDIVIDUAL THEIR PROPERTY RIGHTS TO THEIR ESTATES, WHILE THE OTHER SIGNATORIES ARE STILL ALIVE. THEIR PROPERTY WILL BE TRANSFERRED TO A THIRD PERSON AS PART OF THE DECEASED ESTATE, BUT IN RETURN THE SURVIVOR/S WILL RECEIVED A LIMITED REAL RIGHT (EG USUFRUCT, HABITATIO) OVER ALL OR PART OF THE PROPERTY. WHERE THERE IS MASSING LIKE THIS, THE SURVIVORS ARE ALWAYS GIVEN A LAST CHANCE, AFTER THE DEATH OF THE FIRST DYING, TO RECONSIDER

20

WHETHER THEY REALLY WANT TO GO THROUGH WITH THE TRANSACTION OR NOT I.E. ADIATE. IF NOT, THEN THE SURVIVORS PROPERTY WILL NOT BE FORFEITED, BUT NOR WILL HE/SHE GET THE LIMITED REAL RIGHT OVER THE PROPERTY OF THE DECEASED. IF YES, OF COURSE THE TRANSACTION PROCEEDS AS DESCRIBED ABOVE.

UNIT 9 – MORTGAGE BONDS

Ranking clause: If a bond is lodged in which the ranking clause indicates a waiver of preference, or pari passu ranking, the existing bondholder must waive preference, even if he is the holder of both bonds, on account of section 3(1)(h) of the DRA. In tut letter 101, you advised that we must be able to discuss “what effect a parri passu ranking has on the ranking of subsequent bonds”. I have not been able to find reference to this in the study guide and have looked at section 3 of the Act, without any luck. Would you please assist?

Answer: I SEE NOW THAT IT IS NOT CLEAR. I MEANT THE EFFECT ON THE PRIOR REGISTERED BOND AND THE SUBSEQUENT BOND. I.E. THAT THE PRIOR BOND LOSES SOME PREFERENCE AND THAT THE SUBSEQUENT BOND GAINS STATUS/PREFERENCE SO THAT THEY NOW RANK THE SAME. MORE BONDS REGISTERED LATER WILL BE AFFECTED IN A MINOR WAY IN THAT IT MAY BE THE FOURTH BOND IN TIME TO BE REGISTERED, BUT SINCE THE FIRST TWO BONDS RANK PARRI PASSU AS FIRST BONDS, THIS OSTENSIBLY FOURTH BOND WILL RANK AS A THIRD BOND.?? SOUNDS CLEAR AS MUD… PLEASE GET BACK TO ME IF YOU STILL DO NOT UNDERSTAND.

Waiver of legal exceptions - With these exceptions, do you require us to be able to list and describe them, or would you provide us with the name. ie. Explain when the exception non numeratae pecunia will be waived, etc.? (Essentially, I would like to know if I should try to memorise the exceptions, or whether I should merely be able to identify them.) IDENTIFY AND BRIEFLY EXPLAIN THEM

Participation mortgage bonds regulated by the Collective Investment Schemes Control Act -I have had another long look at this type of bond. My understanding (in simple English) is that it is a bond, which is registered in favour of a number of investors, who invest monies for a minimum of 5 years in a nominee company. The nominee company is then the bondholder/mortgagee. Please let me know if you feel I do still not understand this correctly. YES! YOU GOT IT!

UNIT 9

PARTICIPATION MORTGAGE BOND

Participation mortgage bonds are regulated by the Collective Investment Schemes

Control Act.

Essentially, a participation mortgage bond forms part of an investment scheme

whereby members of the public are invited to invest in a scheme (for a minimum of

5 years) which lends money to members of the public and businesses against

security of mortgage bonds over the debtor’s immovable property.

Where a number of investors invest for variable time periods, the mortgage bonds

cannot be registered in favour of all these investors, so usually the mortgage bond

is registered in favour of a nominee company.

LPL4804/201

21

The nominee company must be registered as such and can only register first (or

equivalent) mortgage bonds over immovable property in the name of the nominee

company.

PARTICIPATION MORTGAGE BONDS MUST BE RANKED AS FIRST BONDS

SHOULD collateral security BE GIVEN BY THE CREDITOR TO SECURE THE

DEBT, IN ADDITION TO THE MORTGAGE BOND, THEN SUCH COLLATERAL

SECURITY must ALSO be registered in favour of the nominee company FOR THE

BENEFIT OF THE PARTICIPANTS IN SCHEME.

After registration, the participation mortgage bonds may not be ceded or dealt with

freely by the nominee company, but require the consent of the registrar of

companies for such alienation. THE REASON FOR THIS IS THAT BOTH THE

DEBT AND THE REAL RIGHTS EMANATING FROM THE BOND ARE

REGARDED AS OWNED BY THE PARTICIPANTS IN THE SCHEME, NOT THE

NOMINEE COMPANY

UNIT 11 – SEQUENCE OF DEEDS AND DIVERSE APPLICATIONS

Section 14(1)(b)(iii) You specifically mention in tutorial letter 101 that this section is an exception to the general rule ito section 14. Have I correctly understood that you specifically want us to concentrate on this section and merely have a background knowledge of the other exceptions ito section 14 perhaps for true/false questions?

Answer : NO, AGAIN I MUST HAVE BEEN LESS THAN CLEAR – ALL THE EXCEPTIONS LISTED UNDER SECTION 14(1) AND OTHER LEGISLATION, ARE IMPORTANT, NOT JUST THIS PARTICULAR EXCEPTION.

APPLICATIONS ITO S 39(2) OF THE ADMINISTRATION OF ESTATES ACT

Usually, the executor is obliged to register inherited immovable property in the

name of an heir, subject to any rights or conditions affecting the property.

There are two exceptions contained in S39(2) of the Admin of Estates Act:

If a usufructuary or other like limited interest in any immovable property has been bequeathed to any person with a direction that after the expiry of such interest the property shall devolve upon some person uncertain or that the proceeds of the property shall devolve upon an person, whether certain or uncertain, the executor shall, subject to the provisions of S25 of the said Act, cause the terms of the will or a reference thereto to be endorsed against the title deeds of the property, & lodge with the Master a certificate by the registration officer concerned or a conveyancer that the title deeds have been so endorsed.

22

When a right of usufruct or other limited right in the property has been bequeathed,

subject to the condition that the property passes over to an uncertain person, once

the right has lapsed, an endorsement in respect of S39(2) can be made; or

If the will stipulates that the proceeds of the property should pass to another person

once the right has lapsed, i.e. that the property must be sold after the lapse of the

bequeathed limited real right & the proceeds of the sale must devolve on an

identified person, then an endorsement in terms of S39(2) can be made.

Answer: THIS SECTION ESSENTIALLY RELEASES THE EXECUTOR FROM THE EXPENSIVE DUTY OF TRANSFERRING IMMOVABLE PROPERTY AND REGISTERING A LIMITED REAL RIGHT (USUFRUCT) AFTER FINALIZATION OF THE ESTATE. THE REASON FOR THE EXPENSIVE DOUBLE REGISTRATION MAY BE THAT THE ULTIMATE HEIRS ARE STILL UNKNOWN WHEN THE ESTATE IS FINALIZED. ANOTHER POSSIBILITY MAY BE THAT WHEN THE USUFRUCT CEASES, THE PROPERTY IS ANYWAY GOING TO BE SOLD. IT WOULD THEN BE FUTILE TO REGISTER IN THE HEIR’S NAMES, ONLY FOR THEM TO SELL IT AT A LATER STAGE ON THE DEATH OF THE LIMITED RIGHTS HOLDER (USUFRUCTUARY).

You are always welcome to contact me if you have any queries about this subject. However, you will, also benefit by visiting this subject’s general discussion forum on MYUNISA. Please remember to watch the time when answering the examination questions, as you have only a limited time of two hours available. You should therefore use every second constructively. Do not waste time answering questions you do not know or writing pages answering a question that only counts a few marks. Use the remaining time before the examination wisely and remain motivated to study hard. Remember, the end is in sight. MS DALITA RAMWELL Telephone number: 012 429-8834 ramwed@unisa.ac.za UNISA