FILTERS:

Revisiting notarial ties

5 February 2015

Introduction
Notarial tie agreements are agreements that are registered in terms of section 3(1)(r) of the Deeds Registries Act 47 of 1937 as “ … real rights, not specifically referred to ...” and are entered into between the owner(s) of land, which are being tied together on the one hand and the party responsible for the enforcement of the tie-condition on the other.

This agreement, upon registration, takes on the status of a restrictive condition. Registrars' Conference Resolution 17 of 1961 which was confirmed by RCR 1 of 1966 sanctions a tie-agreement in which properties held by different owners may be tied together.

The standard operative clauses of tie-agreements or conditions are drawn along the following lines:

The within property is subject thereto that none of the properties may be alienated / sold / mortgaged or in any other way be separately dealt without written consent .. (of the authority enforcing the tie)"

or

"that the owner /owners of the above referred to properties and the City Council of …………. hereby agree that the said properties shall be tied together and be regarded as one property for all intents and purposes."

Legal effect
The legal effect of a tie agreement/condition is that the properties that are subject to such an agreement shall, from the date of registration, be dealt with as one property. For example, a bond may not be passed over one of the properties and only transfer of all the properties may be effected during the subsistence of the tie-agreement. A tie-agreement/condition prohibits separate dealings with any of the properties. The registration of a notarial tie-agreement does not result in two pieces of land becoming one property, as is the case with consolidations. It only prohibits separate dealings with any of the properties so tied.

An erroneous comprehension of the effect and nature of a notarial tie-agreement is displayed by the court in Pocock v De Olivieira and Others [2006] ZAGPHC 245, on Para 12, where the learned judge Stated:

"... in the present matter, such notarial tie-agreements have not been concluded. The properties have not been consolidated into a single erf..."

A predicament in classification
Although tie-agreements are created between owners of properties and a third party, for example Municipalities, statutory bodies and other organs of the state, it is not conceptually clear whether such agreements are personal or praedial servitudes. It is not possible to identify any piece of land that is subject to a tie-agreement as a dominant or servient tenement.

As far as personal servitudes are concerned, one cannot identify the person in whose favour a personal servitude is registered because tie-conditions are imposed to further the objects of statutory enactments, e.g. The Subdivision of Agricultural Land Act 70 of 1970 (see section 4(2)(a)). The National Road and South African National Road Agency Limited Act 7 of 1998 (see Section 49(3) and the Roads and Ribbons Development Act 21 of 1940 (see section 11(6)(a). Tie-agreements are more often than not created by authorities, as terms in consents to subdivision where the authorities are the enforcing parties of the real rights (sui generis). The following instances stand out:

  • Tie-conditions as part of a Ministerial consent, in terms of section 3 of The Subdivision of Agricultural Land Act, 70 of 1970.

  • Tie-conditions in terms of section 4(2) of The Sectional Titles Act 95 of 1986.

  • Voluntary tie agreements. These are the agreement tying e.g. a unit and an exclusive use area.

  • A condition imposed by the Local Authority in terms of section 92(3) of the Ordinance 15 of 1986 (Transvaal).

Dealing with property subject to a tie-agreement
It is evident that a tie-agreement restricts dealings with the properties subject to the tie-agreement. A situation to contemplate is one whereby one of the properties subject to a tie-agreement is sold in execution. A question begging an answer is whether the registrar of deeds will give effect to the registration by the sheriff while being aware of the fact that the property is subject to a tie-agreement. This situation is further exacerbated by the possibility of properties being held by different owners, and being tied together.

It is advisable, to insist on untying the properties prior to the registration of the transfer in execution. Tie-agreements emanating from voluntary tie-agreements are less likely to raise any difficulty, especially in cases where the Local Authority is the enforcer of the tie-agreement as well as the of the judgment creditor. On the other hand, those registered as conditions of subdivision by an Authority, in terms of a Statute, pose serious administrative challenges and involves processes outside the deeds registry in which one of the properties, subject to a tie-agreement, is declared executable by a Court.

As Lizelle Kilbourne proferred in her review of the Pocock case supra in GhostConvey dated 19 October 2009:

“Practitioners must always read, with concentration and an awareness of general unknown risks, the conditional clause (and endorsements) in the title deed to prevent errors in conveyancing."

Nkuba Ngoasheng
Assistant Law Lecturer
Deeds Training

Submit your comment:
 
Name
EMail
Comments
Security Picture (click to change)
Word shown in picture: