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Shares in land

27 June 2013

The word ‘share’ in relation to land is defined in section 102 of the Deeds Registries Act 47 of 1937 (the Act) as meaning an undivided share.  A share in land does not represent, and may not be held out to represent a defined portion of land (see section 24(1) of the Act).  One must remember that an owner who holds a share in land does not hold title to a defined piece of land even although in actual fact he/she may, as so often is the case, by arrangement with his/her co-owners, have been given occupation of a separated piece of land. The title he/she has is to an undivided share only, in the whole of the land, held in joint ownership, a portion of which he/she occupies.

Conversely, naturally, that portion he/she occupies is owned jointly by him/her end his/her co-owners in the whole thereof. If he/she should build a house on the portion he/she occupies, the house will be owned jointly as well.

A joint owner can have his/her ownership of a share in land converted to ownership of a defined portion in that land by the agreeing to partition the land and to award defined portions or a share in such in lieu of shares in the whole property (see section 26 of the Act). Partitions will not be dealt with in this article. It must be borne in mind however, that there is strict statutory control on the subdivision of land and the further fragmentation of shares in land as also of the actual physical division and use of land, so that partition of land may not always be possible.

Regulation 30 stales that the term ’share’ shall be employed when an undivided share in a piece of land is being dealt with and that such share shall be in one fraction to its lowest terms. As regards the first part of the regulation from here on the word ‘’share’ will be used as meaning ’undivided share’; as regards the last part of the regulation consider the following example.

“A owns the following shares in the same property, 1/8, 1/56, 7/112 and 1/112. He has sold all these shares to B and the conveyancer drawing the necessary deed of transfer passes transfer of each share in a different paragraph in the deed. This is in direct conflict with regulation 30, which requires that the shore shall be expressed in one fraction, i.e. the sum total is 24/112, but this fraction must still be reduced to its lowest terms in further compliance with the regulation, i.e. 3/14. There must therefore be one paragraph only in the deed, reading: ‘A three-fourteenths (3/14ths), share in Erf …’etc.”

Regulation 30 also provides that where the denominator of the fraction exceeds two figures the fraction shall be expressed as a six-figure decimal.

Note on the following:

  • Where transferees acquire land in equal shares it need not be stated in the deed that they acquire ‘in equal shares’, as this fact is presumed in the absence of any statement to the contrary. This is true whether the whole property is transferred or only a fraction. Nevertheless nothing prohibits a conveyancer from stating that the shares are equal and thereby not leave such an important factor to a presumption.

  • Where transferees acquire in different shares in the whole property the vesting clause must indicate the share acquired by each owner; for example:

A_________________ 1/2 share.
B _________________1/4 share.
C _________________1/4 share.

  • Where the transferees acquire in different shares as among themselves, but the deed conveys the some shares in different properties, the share of each in the whole property is set out after his/her name, followed by a statement of the aggregate share held by all the transferees: for example:

A _________________1/8th share
B _________________1/12th share
C _________________1/6th share
D _________________1/4 share

Together comprising a 5/8th share in the following properties:

1. 5/8 share in Erf 106 Woodhill …………….
2. 5/8 share in Erf 107 Woodhill …………….

Note: Where different fractions in the different properties are to be conveyed, separate transfers must be passed (see section 23bis of the Act).

The provisions of regulation 31 must also be noted: A statement as to how shares in land are held must, in complicated cases, be furnished by the conveyancer when dealing with such shares. Where possible, in transferring a share in land from titles under which shares are held, one or more titles must be exhausted. For example, if A and B hold a piece of land jointly, two- thirds under one title and one-third under another, and they dispose of a third share, this must be transferred from the latter title, thus exhausting it.

The acquisition of share in land, if not absolutely prohibited, is at least strictly controlled by Acts such as the Subdivision of Agricultural Land Act 70 of 1970 and the Advertising on Roads and Ribbon Development Act 21 of 1940.

Certain sections of the Act will now be considered.

Section 22 of Act 47of 1937

Subsection (1) means in effect that if A owns Erf 1 and B Erf 2, A and B cannot together transfer both erven to a common acquirer in one deed of transfer. They must each pass transfer of his/her particular Erf in a separate deed of transfer. In other words, every transferor in a deed of transfer must own a share in each of the properties therein conveyed. Note the proviso: one transfer deed is permissible where authorized in any law or by the court. Note also that the subsection applies to deeds of transfer only and not to mortgage bonds. In the circumstances of the example above A and B could mortgage both erven in one bond.

Subsection (2) provides firstly that, if A owns more than one piece of land, he/she may transfer all the pieces of land to one or more acquirers of such pieces of land in one deed of transfer, provided each piece of land is described in a separate paragraph.

Secondly, if two or more persons own two or more pieces of land in shares, they may give transfer of such pieces of land in one deed to one or more persons acquiring, provided each piece of land is described in a separate paragraph. Where a deed includes more than one property each must be described in a separate paragraph.

Subsection (3) deals with new portions of land and provides similarly as in subsection (2) that firstly A as owner of land may transfer a portion or portions of such land to one or more acquirers provided each portion is described in a separate paragraph in which reference is made to the diagram of the portion. Secondly, the same position applies if the pieces of land are owned by two or more persons who are transferring portions of such pieces to one or more persons acquiring. Here again, the old rule applies: Each transferor must own a share in each of the pieces of land being subdivided.

As regards separate paragraphs in deeds these must be numbered and be self-contained as regards the description of the property and extending clauses, although local variations and differences in practice occur in different registries. As regards conditional clauses there is no need to reflect conditions already contained in a preceding or subsequent paragraph, provided a suitable and clear reference is given in the conditional clause of the paragraph in which they are not repeated in full, e.g.

“Subject to the conditions imposed by the City Council of Tshwane, which reads as more fully set out in condition B of paragraph I above.”

In the case of the personal servitudes mentioned in section 66, however, it is the practice to repeat clause in full after each paragraph.

Section 23 of Act 47 of 1937

Section 23 to a large extent, duplicates what has been said or at least implied in section 22, to the effect that a person may transfer land in one transfer deed to any number of lawful acquirers who are taking transfer in shares, and vice versa any number of transferors holding land in shares may transfer that land or shares therein by one deed of transfer to another person or to persons acquiring in shares.

Section 24 of Act 47 of 1937

Subsection (1) provides that no transfer of a share in and representing or purporting to represent a defined portion of land is capable of being registered. It is obvious that the registrar cannot exercise much control here.

In terms of subsection (2) where A and B own Erf 100 in equal shares (the shares need not necessarily be equal) and they have the erf surveyed into two portions: i.e. Portion 1 and the Remainder and A in fact bought the share of B in Portion 1, but they both wish to remain as owners of the remainder. To give effect to the above scenario, in the absence of any special provision in the Act, it would be necessary for A and B to take out a certificate of registered title in respect of Portion 1 and then for B to transfer his/her half-share therein to A. This would be a cumbersome procedure and for this reason section 24(2) provides that both A and B can give transfer of Portion 1 to A, even although in actual fact A already owns a half-share therein and is transferring to himself.

Allen West
Deeds Training
Pretoria

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