FILTERS:

RCRs 59 and 70 of 2012 analysed

7 November 2013

At the Registrars’ Conference, which was held from 22 to 26 October 2012, the Registrars, as well as other stake holders who attended this conference, had to as usual make resolutions on various issues affecting practice and procedure in the Deeds Registries. Among the issues tabled for discussion was Item 59 as well as Item 70 of 2012. I take interest in the two items as they relate closely to an article titled The object of a right of habitatio which I wrote in SADJ Issue No. 28, November 2012, page 27. Being it a sheer coincidence that after submitting the article and while waiting for it to be published, a similar issue was directed to the Registrars for a resolution. I, to a large degree, feel that the resolutions taken validate the views expressed in the above mentioned article.

Item 59 of 2012 reads as follows:

"Where a sectional title scheme is closed in terms of sections 48 and 49 of the Sectional Titles Act, 95 of 1986, and one of the sections is subject to a right of habitatio, this right shall be deemed to be converted into a real right over the undivided share in the land affected by such real tight. The question is how can a habitatio exist over land without a dwelling erected thereon?”

The resolution was that the right of habitatio exists until it is cancelled. The Registrars clearly agree here that the dwelling is not necessarily the object of the right. They clearly concur that the land is in fact the res (thing) against which the right is registered and that a dwelling is merely necessary for the practicability of legally exercising the right. It is after all a right of habitatio (occupation of a dwelling), therefore it should legally and practically be possible for the holder of the right to habitate (dwell) on the lend against which such right is registered. However, it is not extinguished if the dwelling no longer exists. For as long as the land exists and is capable of supporting another building to be erected thereupon, and for as long as the holder of the right is still alive, the right lives on. This is in light of Kidson v Jimspeed Enterprises CC & Others 2009 JOL 23455 (GNP).

In the light of the resolution under discussion, it is safe to say that a title will be issued for the right when certificates of titles are issued to previous owners of the units in the terminated scheme terms of Section 43 A(1) (Form SS to the Regulations) of the Deeds Registries Act 47 of 1937 read with Section 49(4)(d) of the Sectional Titles Act 95 of 1986. It is also going to be created as condition in the Section 43A (1)— certificate of registered title of the owner of the section to which this right applied who now happens to own an undivided share in the land. This should not however give the impression that a diagram depicting the area of the servitude in terms of regulation 73(2) of the Deeds Registries Act must be dispensed with. That formality must still be complied with in order to show that the practical exercise of the right is possible and that the right is as such legally enforceable.

The Registrars deserve acclamation and must be highly commended for their assiduousness in taking this resolution. Had they resolved that the right must be cancelled, it would have created an undesirable impression that the right lapsed due to the fact that the dwelling is destroyed. This resolution however is clear to the extent that the right subsists in so far as the land subsists. I wish it could have gone further to state that should the right be impracticable to exercise then it lapses and should be cancelled. I doubt that a diagram would be issued it the surveyor is of the opinion that the land is not capable of sustaining any erection of buildings in the future. In this particular case, the right would have to be cancelled as it would have become impractical to exercise. My view on this matter remains.

Another interesting resolution the Registrars had to take was on item 70 of 2012 was primarily based on Section 14(6) of the Sectional Titles Act 85 of 1986 as well to seek clarity in respect of CRC 6 of 1988. I submit beforehand that I think there is a contradiction in view of the previously discussed resolution.

Briefly, section 14(6) of the Sectional Titles Act 85 of 1986 provides that:

“(6) The registrar may on application by a developer, which application shall be accompanied by a certificate by a conveyancer in which he certifies —

  • that all the units of a scheme are registered in the developers name;
  • that, if applicable, the developer is the holder of a right referred to in section 25 or 27; and
  • that no unit or no right referred to in section 25 or 27 is encumbered by a sectional mortgage bond or a lease or in any other way, close the sectional title register, and notify the Surveyor-General and the local authority that the sectional title register has been closed, whereupon the Surveyor-General shall cancel the original sectional plan and the deeds registry copy thereof.”

Whereas CRC 6 of 1988 at para 6.1 unequivocally states that:

“when a sectional plan is to be cancelled, in addition to producing all the certificates of registered sectional title, the title to any real right must also be produced for cancellation.”

The questions were:

  • Having interpreted a servitude as an encumbrance to the land, how can the conveyancer certify in respect of the provisions of section 14(6)(c)?
  • Whether CRC 6 of 1988 also applies to a usufruct that existed before the scheme was opened and all units were made subject thereto?

The resolution was that the Section 14(6)(c) certificate by conveyancer should only be in respect of servitudes registered subsequent to the opening of the register. Servitudes registered prior to the opening of the register automatically revive.

In light of this resolution, if a developer, subsequent to the opening of the sectional title register, registers a right of usufruct/usus/habitatio in favour of his mother in respect of a specific unit then upon the closing of the scheme such real right must be cancelled to make way for a certificate in terms of Section 14(6)(c) to be issued. In simple terms, the right does not revive into conventional land … it dies because it is an encumbrance registered after the opening of the register.

Before I embark on the exploration of this resolution, I would like to bring your attention to CRC 6 of 1988 at para 20.2.4 stating that:

“any condition registered against a unit e.g. usufruct etc. must be brought forward in the certificate of registered title, referred to in paragraph 20.2.2 above as affecting only the share of that owner.”

In light of the above, if upon destruction of buildings and closing of the scheme there happens to be a usufruct/usus/habitatio registered by an owner of a unit in respect of their unit then the share of that owner will be made subject to the respective real right.

I must admit, I do not understand the rationale behind RCR 70 of 2012 when trying to reconcile it with RCR 59 of 2012 as well as with CRC 6 of 1988 at para 20.2.4. There just seems to be a huge contradiction between them. By implication, it states that any servitude registered over a unit, a section 25 or a section 27 right dies when the scheme dies because it would have been created after the register was opened but my concern is why does it have to die? What makes it different from the one created before the scheme? They are both encumbrances and they are both real rights. What makes the developer’s “post-scheme usufruct”, if you will allow me to refer to it as such, any more complicated to bring forward into conventional land than a post- scheme usufruct of owners of units as contemplated in CRC 6 of 1988 para 20.2.4 and RCR 59 of 2012? I see no logic in this.

I do not see why the “post-scheme usufruct” cannot be converted into a real right against the title deed of the developer irrespective of when it was registered. Converting the developers post-scheme usufruct should be much easier in my opinion because if we are referring to a section 14(6)(c) affidavit it means we are dealing with a scheme that is being closed before a body corporate was established so there is no risk of prejudicing anyone. The procedure would not be any different or any complicated nor will it be in contravention of any law.

All we need is a diagram for that particular usufruct/usus/habitatio and we provide a title for it and make the land subject thereto. Surely if the Surveyor General’s office can give us a diagram of that real right we should be able to convert it.

Imagine a scheme made out of three buildings, each of these buildings being ten-storey. On every floor of each of these buildings exists a unit against which a real right of any kind is registered. Then the scheme is closed and all owners of units get a Certificate of Registered Title for their respective undivided share in the land. How in the world are we going to give life to those real rights?

Yes we can make the Certificate of Real Right subject thereto and yes we can issue titles for the rights but how are the holders thereof going to be practicably able to exercise such rights? How is the Surveyor-General going to depict such Real rights in the diagram required in terms of Regulation 73(2)? If my opinion was anything to go by, I would propose that real rights in a sectional title scheme registered after the establishment of a body corporate should not be converted were the scheme is closed because in that case there are chances of impossibility or impracticability of the exercise of such rights. Such rights should therefore be cancelled before or simultaneously with the application to close the register.

I strongly propose, with due respect that conference should revise this and that the interpretation of CRC 6 of 1988 must be reconsidered at para 6.1. I perceive the intention of the CRC at Para 6.1 to have been that the titles must be cancelled as they are in Sectional Title Format, and not that the right itself must be cancelled. In that light, then it makes sense why at Par 20.2.4 the CRC refers to “bringing forward such right” in the CRT. That on its own indicates a conversion rather than a cancellation of the right. Perhaps even section 14(6)(c) of the Sectional Titles Act must be revised. Anything to remedy this contradiction between these circulars would be appreciated before it turns into one examiners nightmare.

Khumo Makallane
Assistant Law Lecturer
Deeds Training
Pretoria

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