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Avoiding Trust rejection queries

20 March 2019

Some of the queries raised by several of the deeds registry examiners – when it comes to transactions involving trusts – are scarcely believable!! While some examiners do exercise their discretion from time to time, there are other examiners (in the minority) who are pedantic to the extreme, who will not listen to reason or argument, and will reject deeds for the flimsiest of reasons.

Dealings with trusts can therefore be particularly troublesome – but there are a few elementary rules which can be followed which will avoid rejection queries to a great extent.

Here are some guidelines to assist in avoiding the unnecessary rejection of deeds where a trust is involved:

Some general comments

  • The correct name of a trust must be determined by the trust deed itself.
  • The letters of authority usually, but not necessarily, reflect the correct name of the trust. Where there is any doubt the conveyancer should verify the correct name of the trust by consulting the trust deed and, if necessary, obtaining a copy from the Master. Letters of authority do however generally reflect the correct name of the trust.
  • Letters of authority are never lodged in the deeds registry – but must be retained by the conveyancer or by the notary public either in the file or in the notary’s protocol.
  • If the name of the trust is incorrect in the holding title, then a Section 4(1)(b) application should always be drafted to correct the error. Proof of the incorrect name must be provided to the Registrar of Deeds.

Where the name of the trust is correct in the holding title
If the name of the trust is correct in the holding title, then here are some useful tips to avoid the unnecessary rejection of deeds:

Rule 1: Follow the wording which appears in the holding title verbatim.

• If the vesting of the holding title says:

The Trustees for the time being of the Jane Austen Trust
Number 123/2016

then follow that wording precisely in the new deed of transfer.

• If the vesting of the holding title says:

The Trustees of the Jane Austen Trust
Number 123/2016

then follow that wording precisely in the new deed of transfer.

• If the vesting of the holding title says:

The Jane Austen Trust
Number 123/2016

then follow that wording precisely in the new deed of transfer.

• If the vesting of the holding title says:

Jane Austen Trust
Number 123/2016

then follow that wording precisely in the new deed of transfer.

Rule 2: Drafting powers of attorney correctly to avoid rejection queries

A power of attorney which is signed on behalf of a trust must disclose

  1. the full name/s of the person signing on behalf of the trust,
  2. the fact that the trustee is authorised by a resolution of the trustees,
  3. the Master’s registration number of the trust, (including the suffix if applicable) and
  4. the trustees are acting in terms of letters of authority issued to them by the Master of the High Court (where the trust is filed).

Depending on the vesting clause of the trust in the holding title (as I have set out above) follow that wording in the power of attorney as well. Thus: If the holding title refers to “The trustees of the Trust” then use that wording. If the holding title refers to “The trustees for the time being of the Trust” then follow that wording. If the trust deed refers to “The Jane Austen Trust”, then follow that wording.

(It must be borne in mind that with some trusts a trustees’ resolution is not sufficient, and it may well be necessary for beneficiaries or other interested parties to be part of a resolution as well.)

3. Chief Registrar’s Circular 17 of 2014 – Trust Suffixes
Conveyancers must be mindful of CRC 17 of 2014 which prescribes what where letters of authority are issued on or after 15th September 2014 the trust must have the appropriate suffix added to the trust number – as per Chief Master’s Directive 7 of 2014.

John Christie
J Leslie Smith & Company Inc

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