Necessity of Deeds Registry

A strike of Deeds Registry officials during 2006 hardly received attention in the highest quarters of Government. The reaction might well have been that it is a strike by just another relatively obscure group of aggrieved civil servants, within the Department of Land Affairs.

In reality, the offices of the registrars of deeds, which are mostly situated in areas where there are also Divisions of the High Court, form a vital piece of economic infrastructure. Without it our modern free market system would hardly function or function with great difficulty, as has been shown in countries aligned to the former Soviet Union. Likewise, in many Third World Countries, the lack of a proper land register stifles economic development.

As an everlasting asset, land forms the most obvious security one has to offer for the repayment of a loan. However, this presupposes that the particular piece of land may be clearly identifiable. Only then will individual or institutionalized money lenders be prepared to provide credit on the strength of a real right against the debtor's land this which we nowadays call a mortgage bond.

This is the basis upon which the whole modern banking system is built. If all land in a country belongs to the State, then banks are largely restricted to providing loans to the different organs of State or merely providing short term loans, even if individual property rights on land are acknowledged without a credible system which proves X or Y's legal right. So for example, in Indonesia, or in other parts of the developing world no bank will provide significant credit to say a Javanese subsistence farmer.

It is exactly in this area where South Africa inherited one of its most significant strategic advantages from the Roman Dutch law. Fundamental to a credible cadastre (property register) is the survey performed by many generations of surveyors, which enables almost each piece of land to be identified. This provides not only the creation of a register of who owns a piece of land or has rights thereto, but may also provide this information for public knowledge.

This all may sound obvious, but it is not really so?

In some of the most highly developed Western countries, such as Britain there is not really an equivalent to South Africa's reliable deeds registers (property registers).

During the late Roman times the transfer of land took place by physically handing over a document in which the transferor (i.e. the seller of a house) confirmed that he transfers the land to the transferee (the buyer). This event was not accompanied by public notification. This in essence is still the situation in England today with their "conveyance by deed" and complicated matters to outsiders who wish to know who the owner of a specific piece of land is.

However, in other parts of North Western Europe things developed differently during the middle ages. The transfer of land had to take place in public, usually in the presence of family or neighbours. This developed into a practice where this function was performed in the presence of the local judicial official who had to keep a copy of the transfer deed in his office.

This finally gave rise to legislation enacted between 1529 and 1580 by the then Austrian-Spanish rulers who also ruled the Lower Lands of Holland. Accordingly, all transfers of land and rights thereto (such as a mortgage or servitude) had to be registered in the local court.

This is precisely what happened in the Cape. Simultaneously with the establishment of a separate Council of Justice ('Raad van Justisie') in 1680, all land transfers were registered there until the early 19th century when the British administration in the Cape established a separate registration office for land titles. The Roman-Dutch principles upon which this office then functioned remained, and indeed still do so to this day.

South African Deeds Registries are therefore government offices where information relating to land and certain other related judicial information (such as antenuptial contracts) are readily provided for public access. Information kept there enables potential land purchasers or credit providers to decide whether they wish to proceed with such transactions or not.

Land registers may function in one or the other way. In certain Western European countries a so-called positive registration system is employed, which means that information recorded may be fully relied upon. By implication this means that the relevant State will guarantee the accuracy of the information contained in its land registers.

In South Africa, and elsewhere, the system however is negative. This means that the information contained in deeds registers create a strong presumption, but total reliability cannot be guaranteed.

Nevertheless, great care is taken to ensure the accuracy of our registers. In its present form, the Deeds Registries Act, 47 of 1937 places a great deal of responsibility on conveyancers (the specialized attorneys who deal with land transfers and the rights thereto) to take responsibility for this.

On the other hand, our system also relies to a great extent on the professionalism of deeds examiners employed by the State to ensure the integrity of the registers.

Of course our land registration system and all that it is built upon only forms part of the total judicial infrastructure on which our economy is based. If anarchy in a given area escalates to such an extent that a bank can no longer retrieve its outstanding debt on a property by way of public auction, then the best land registration system becomes meaningless.

However, one must not underestimate the value to the economy of a reliable land register.

Republished with permission from SA Deeds Journal from an article which originally appeared in Sake24 of Die Burger.