PTO is an acronym for Permission to Occupy
This is a user right of a personal nature allowing the user either use or occupation rights over a certain rural unsurveyed piece of land. Therefore it is not registerable in a Deeds Registry, although registerable in several state departments, e.g. Agriculture, Local Government and Traditional Affairs, etc. Most PTO's are for occupation whereas a good few others are issued in respect of land use, e.g. irrigation rights, etc.
As has already been pointed out above PTO's are not eligible for registration in a Deeds Registry as they are by nature classified as mere personal rights whereas only real rights and limited real rights can be registered in a Deeds Registry.
Of all the tenure rights the PTO is the most less formal, least bureaucratic and yet most flexible and easily comprehensible of all of them because of its very personal nature. All other tenure rights are based on a genuine cadastral diagram drawn and approved according to relevant land Survey Legislation and Spatial Planning policy whereas the PTO is only based on a mere sketch plan. The latter is very precarious in the sense that it lapses when its holder dies and as such cannot be inherited in a deceased estate of the holder. In other words it dies when its holder dies. PTO tenure is not an economically viable form of land holdership as it is not acceptable as real security or collatearl by any financial institution (in other words it cannot secure a debt or one cannot take a homeloan or mortgage against it).
PTOs are no longer procured, since 1 September 1999 (section 2(2)(a) Schedule 2: Upgrading of Land Tenure Rights Act 112 of 1991) as they are automatically upgraded ex lege as long as the following requirements are met, namely:
Otherwise no informal tenure rights, e.g. Proc R293/62 or R403/88 grants, leaseholds, quitrent and PTOs may be procured any longer. Instead the holder must be issued with a freehold title (the so called DDD/Triple "D" titles).
However, due to social and economic policy considerations certain situations compel relevant departments to continue issuing the PTO at the insistence of the client mostly due to its less bureaucratic and less cumbersome nature.
Background information on PTOs
Prior to 1991 (before the Land Reform era) Black land tenure in South Africa was traditionally divided into two categories namely:
This distinction is peculiar to the complexities of the historical black settlement and land dispensation history of South Africa.
Rural, on the one hand, essentially applied to land governed by the Land Acts namely the Native Land Act 27 of 1913 and the Development Trust and Land Act 18 of 1936 applicable to the so called 13% of South Africa belonging to Black people.
Urban, on the other hand, essentially related to areas whether rural or urban which were under the jurisdiction of the so called South African Development Trust (SADT).
Rural areas were divided into three main categories, namely:
Within the above categories there were further divisions of land into Rural and Urban.
The Native Land Act 27 of 1913 ushered the first provisions to divide South Africa into pockets of land designated for Black Ownership. In terms of this Act scheduled areas were designated for exclusive occupation by Blacks.
The Development Trust and Land Act 18 of 1936 was promulgated for the sole purpose of the acquisition of and occupation of the land by Blacks in the so called released areas. Provincial ordinances never applied to the land use administration of the SADT territories (this exclusion was entrenched under the Black Laws Amendment Act 56 of 1949).
The Black Administration Act 38 of 1927 was the enabling legislation and key authority for the implementation of all policy regarding land administration in the above areas.
The Black Administration Act 38 of 1927 gave rise to various other legislation dealing with regulation and land tenure rights e.g. Proclamation R293/62 entitled Regulations for the Administration and Control of Townships in Black Areas solely for urban tenure development and Proclamation R188/1969 entitled Black Areas Land Regulations dealing with rural land tenure, providing for quitrent and permission to occupy certificates.
It is evident from the aforegoing background that PTOs were originally issued in areas scheduled for Black Occupation in accordance with the Black Administration Act, 1927, the Native Land Act, 1913 and the Development Trust and Land Act 1936. What galvanized the above confusion into a total nightmare was the mushrooming of the self governments and the so called TBVC states and their take over of some of the Tenure rights and the customising of them into their own forms of tenure administration. The result was two parallel streams of land administration over less formal land tenure rights, namely the SADT administration on the one hand and the self governing and TBVC states administration on the other.
In the remainder of South Africa, the non black rural and urban areas where blacks were prohibited from acquiring land rights, the Group Areas Act 36 of 1966 regulated acquisitions, alienation and occupation of land by stipulating which part of the Republic could be occupied by which race.
Since 1994 there has been phenomenal transformation and significant land reform. To date land reform is continuously implementing effective policies in addressing the past disparities in land tenure and at the same time creating the necessary awareness of the general public of the current notions of land rights and related constitutional principles.
In conclusion, a PTO is a less formal tenure right that merely evidences a user right and as such is only a personal right. It is not proof of titled ownership in land and therefore cannot be classed as a Title Deed to Land.
It is for this reason not eligible for registration in a Deeds Registry, however, it can be recorded in any other state department that may issue it, including traditional authorities.
I believe, we do need to revisit the law or regulations that regulate on how South Africans should be considered when buying or acquiring to secure a home loan with regard to permission to occupy.