Role players

2 February 2012

The South African deeds registration system, which goes back more than 350 years, is recognized internationally to be one of the best in the world.  It gives legal security, or a form of guarantee, to owners of land or the holders of real rights in land of the existence of their ownership or other rights.  The then Appellate Division of the Supreme Court in 1957 called the deeds registry a source of information and held that the function of registration is to protect every registered right (Frye’s (Pty) Ltd v Ries 1957 (3) SA 575 (A) at 583E F).  Similarly, in the Appellate Division case of Chief Registrar of Deeds v Hamilton Brown 1969 (2) SA 543 (A), one of the judges alluded to the fact that conveyancing  is a unique profession known only to conveyancers and deeds office staff.

The principle function of the system of land registration is to create and ensure security of title.  The Republic of South Africa’s present land registration system, based on the Land Survey Act (Land Survey Act 8 of 1997) and the Deeds Registries Act (Act 47 of 1937) (the Act) goes a very long way towards providing security of title, notwithstanding the fact that the State does not actually guarantee security of title.  The security of title provided by the system is entirely due to the excellence of the system itself.   This may be seen in the fact that many hundreds of thousands of property transactions are registered annually while court cases resulting from errors are rare.  The property market is by far the largest business in South Africa, reflecting an underlying value of billions of Rands.

The integrity of the land registration system relies on a distinctively South African partnership between the public sector (the deeds registries) and the private sector (the legal profession).  The property market including sellers, purchasers, and financial institutions, relies on the security of title represented by this partnership.  Acceptance of the integrity and security of the system causes financial institutions to be prepared to lend large sums of money against the registration of a mortgage bond over a person’s immovable property.   It does not take much imagination to comprehend the consequences should the integrity of the land registration be jeopardized by the mere fact that unskilled persons perform the conveyancing duties.  Financial institutions have, in writing, alluded to the fact that they will not place persons other than practicing conveyancers onto their panels to register bonds.

The system is dependent on the integrity and the correct performance of the functions of conveyancers and the staff of deeds registries.   Without the proper preparation of deeds by conveyancers and examination and scrutiny of deeds to ensure their correctness, by examiners in the deeds registries, the whole deeds registration system will rapidly fall into disrepute.

For this reason, the role players (the conveyancers and examiners, senior examiners, assistant and deputy registrars and registrars of deeds) are all required to be professionally qualified individuals who have complied with and exhibited high standards of training and knowledge.

It is also worth mentioning that the South African land registration is a unique system of land registration which, as already alluded to guarantees ownership.  The guarantee of ownership is built into the system and cannot be equated with systems in other countries, such as United Kingdom, Ireland, Australia and Canada.  The systems in these countries do not guarantee ownership and is not based on a cadastral system of land registration.

The South African land registration has also been adopted In Botswana, Swaziland and Namibia.   These countries have Acts similar to the South African Deeds Registries Act and Sectional Title Act.  Deeds and documents are also to be prepared and executed by practicing conveyancers who have a recommended fee guideline similar to that of the South African Law Societies and who have passed an admittance examination based on the same admittance examination written in South Africa.

The Registrar of Deeds and his/her staff
The duties and functions of the registrar and his/her staff are derived from the Act and the Registration of Deeds Regulations (Section 9 of the Act provides for a Deeds Registries Regulations Board, with powers to make regulations on the matters specified in section 10 of the Act.  These regulations only take effect when approved by the Minister and published in the Gazette at least  one month before the date specified in the relevant notice as the date of commencement thereof) (the regulations). The Act is procedural in nature and a registrar of deeds has only such power as prescribed in the Act.  The registrar is a creature of statute and is only authorized to do what particular legislation empowers him/her to do — either expressly or by necessary implication.

In terms of section 3(1)(a) of the Act a registrar of deeds must take charge of and preserve all records pertaining to land transactions and aspects relating thereto.  The deeds registry thus serves as an archive of land transactions and it is the duty of the registrar to preserve all such records.

Section 3(1)(b) of the Act places a duty on the registrar to examine all deeds or documents submitted to him/her for execution or registration and after examination to either execute or register such deed, or to reject any such deed or document the execution or registration of which is not permitted by the Act or any other law, or to the execution or registration of which any valid objection exists.  It is also the duty of the registrar of deeds to register or attest a number of other deeds, documents or acts of registration; to endorse certain deeds and documents; to record all notices, returns, statements or orders of court lodged with him/her in terms of any law; and to keep various records, as set out in section 3(l) of the Act,

In the execution of the duties set out in section 3 of the Act the Registrar is required to act in accordance with the provisions of a vast body of statute law (approximately 390 Acts, Ordinances, Provincial Acts and other legislative provisions) as well as the common law.  An important part of his or her work involves the interpretation of legislation and applying that interpretation to the process of examination, endorsement, registration, execution or attestation of deeds and other documents.  Case law, the resolution of Registrar’s Conferences, Chief Registrar’s Circulars and circulars and other instructions by the Registrar him/herself, as well as the manuals on deeds registration law, are amongst the tools used by conveyances and registrar personnel in the determination of a correct interpretation of the various statutory provisions.

The registrar’s duties insofar as the examination and rejection of deeds are concerned are usually exercised through the examiners.  However, the ultimate responsibility remains that of the registrar.

In terms of section 99 of the Act, no act or omission of any registrar or of any officer employed in a deeds registry render the Government or such registrar or officer liable for damage sustained by any person in consequence of that act or omission.  However, if an act or omission is male fide or if the registrar or officer has not exercised reasonable care and diligence in carrying out his/her duties in connection with such act or omission, the Government is liable for the damage and the registrar or officer guilty of such act or omission is liable to make good any loss or damage resulting there from to the Government if such act or omission was mala fide.  Where deeds are passed illegally and in clear contravention of the relevant statutory requirements, the officers concerned render the government liable for damages to injured parties.

Examiners in deeds registries must be legally qualified persons.  This means they must have at least an LLB degree or an equivalent qualification.

By the time someone has attained the level of senior examiner, he/she will generally have been in the service of the deeds registry for at least five years and will, at the minimum, have attended and passed training courses at levels one to six.  He/she will know and have available all the training manuals, registrar's conference resolutions, all the chief registrar’s circulars and registrar's circulars pertaining to deeds office practice, in addition to any other instructions given by the registrar.

It should also be mentioned that in the 1980s the Deeds Registries Act 47 of 1937 was amended to remove the tariff of fees to be charged by conveyancers from the regulations and to remove the power of Registrars to act as “taxing masters”.  This regulatory manner of prescribing fees and monitoring the accounts was a sound system and worked well, and which should perhaps be reintroduced to ensure uniformity of costs and create certainty in the property market.

The role of conveyancers and notaries
A duly admitted conveyancer is also a practising attorney and therefore an officer of the court, and as such owes a duty to the court, as well as to his/her client.  The professional independence of the conveyancer in private practice ensures full protection for members of the public.  A conveyancer owes a duty of care to all the parties involved in a transaction. The problem of a conveyancer being employed by, for example a bank to work solely for them was commented on by Innes J in an Appeal case dated as far back as 1921 as follows: “he automatically parts with his independence by engaging to practice his profession for the benefit and at the behest of his employer.”  In another Appeal Court case in Zimbabwe in 1988 the judge held: ”that any non registered person who takes in his employ a registered legal practitioner in order that he may practice the profession of law on his behalf, poses a potential threat to the professional independence of the practitioner.  The mere fact that the practitioner subordinates himself as servant puts his independence in the practice of his profession in jeopardy.”

The conveyancer is also a member of a Statutory Law Society which lays down and maintains standards of academic and practical training and of professional conduct for its members.  The disciplinary rules of the society provide members of the public with expected standards of performance.  Conveyancers who fail to adhere to those standards are disciplined by the Statutory Law Society or by a court of law.  Deeds and other documents requiring lodgement or registration in a deeds registry must be prepared and lodged by conveyancers, who must be practicing attorneys who are specially qualified and have been admitted by the high court to practice as conveyancers and notaries.

 A conveyancer is a practicing attorney who has specialized in the preparation of deeds and documents which by law or custom are registerable in a deeds registry.  Section 15A(I) of the Act provides that certain deeds and documents must be prepared and signed by a conveyancer  who accepts responsibility for the correctness and accuracy of certain facts set out in such deeds or documents.  These facts are listed In Regulation 44A of Regulations.  Section 15A and Regulation A then, place a responsibility on the conveyancer for the accuracy of these facts.  The registrar relies on the accuracy of the documents prepared by the conveyancer and the facts contained therein, and although Section 4(1)(a) of the Act empowers the registrar, during the examination of the deed or document, to call for the production or proof upon affidavit or otherwise of any fact necessary to be established, he will not call for any further proof of facts for which the preparer has accepted responsibility under his/her signature, unless the document is prima facie incorrect.  Where a conveyancer knowingly signs a deed or document which is not registerable or certifies as factual matters which he knows not to be correct, such a conveyancer is guilty of fraud.

Similarly to examiners in the deeds registries, conveyancers must also have proper knowledge of the more than 390 pieces of legislation governing land registration as well as the common law, conference resolutions, dating back as far as 1938 and all relevant Chief Registrar’s Circulars.

It can without fear of contradiction be said that a conveyancer is a specialist in the field of conveyancing and must so specialize in order to maintain the integrity of our land registration system, inclusive of protecting the rights of third parties in the form of mortgage bonds, servitudes and other real rights in land.

Certain documents can by law only be drawn and attested by a notary public.  Examples of such documents are antenuptial contracts, notarial bonds, certain contracts pertaining to immovable property and leases to be registered in terms of section 77 of the Act.  Certain other documents may also be drawn by a notary even though this is not a legal requirement.  This holds certain advantages to the parties having the document so drawn, such as the fact that when a document is executed before a notary there is a presumption that every statement in the document is true and understood by the parties thereto, and that all the proper solemnities have been observed by the notary public, which presumption can only be rebutted by clear proof to the contrary.

A high responsibility rest upon conveyancers and notaries to ensure the correctness and accuracy of deeds and documents they prepare and sign.  It is this very responsibility, coupled with the responsibility of the registrar referred to above, that accounts for the high regard in which the South African Deeds Registry is held internationally.   Deeds and documents registered or executed within the deeds registries of South Africa reflect financial transactions worth many billions of Rands annually.  Enormous sums of money are paid by purchasers to sellers, by lenders to borrowers and by lessees to lessors on the strength of registration and/or execution of deeds by conveyancers before the registrars in the deeds registry.  Financial institutions rely entirely on the certificates confirming registration provided by and information received from the conveyancer, before any financial payments are made.

The responsibility of the conveyancer does not only relate to the preparation and lodgment of deeds and documents, but such official must also manage the finances of the transaction being registered which could amount to millions of rends.

In preparing the deeds to be lodged for registration  as well as the documentation for payment of transfer duty or municipal rates and taxes, and for registration of any mortgage bonds (including the loan agreements, suretyships, guarantees, and any other documents required by the financial Institutions), conveyancers are normally assisted by conveyancing secretaries or paralegals, who are people specifically trained by conveyancers and by software service providers to obtain the relevant information from the parties to the transaction, to record the data into the relevant computer documents and so report to the parties, banks and estate agents as to the progress of the transactions.  Although they must have some basic knowledge of conveyancing, they are not trained or qualified to deal with all the intricacies of the actual registration process, nor do they carry any responsibility with regard to the process as is done by conveyancers, as was explained before.  They are only employees and as such also bear no liability or responsibility towards the parties to the transaction or to the financial institutions involved.  These persons merely create the basic deed or document (which is then perused. approved or corrected, and then signed by the conveyancer), and are not responsible for the analysis of the legality of the deed of sale, court order, will, or other document giving rise to the causa for the transaction.  Ultimately it is the conveyancer who must take cognizance of the legal aspects governing the transaction and determine the legality thereof. Conveyancing typists cannot differentiate between the subtle nuances of a fideicommissum residui or usufruct, or deal with matters such as township development or opening of sectional title registers, just to refer to a few isolated examples.

There is a perception that conveyancing is merely the completing of forms and that the registration of deeds can be equated with the registering a motor vehicle, and that secretaries and paralegals are quite capable of doing conveyancing.  It is submitted that this perception is a myth, and that conveyancing is a highly specialized profession.  Countrywide the average rejection figure for deeds lodged for registration is 27%.  In Umtata where attorneys, not qualified as conveyancers, are allowed to perform conveyancing, due to the Statutory provision contained in the definition of conveyancer in section 102 of the Deeds Registries Act 47 of 1937 (which is only applicable to attorneys who qualified in the former Transkei prior to 1992), the rejection figure is 68%, almost two and a half times as much as in the rest of the country. This tends to show that the skills required to successfully attend to conveyancing work, is much higher than even that of the avenge attorney, let alone the secretary or paralegal.

In the new Electronic Deeds Registration Bill, even greater responsibilities will be placed on the conveyancer.  It will not be possible to lodge paper documents in an electronic system, the Bill makes provision for these documents to be scanned and for the paper documents to be filed ii a protocol to be kept by the conveyancer, like with a notary public.

In an electronic environment it will not be possible for the conveyancer to physically appear and execute the deeds before the Registrar and therefore the Bill makes provision for the transferor and transferee to execute the deed in the presence of a conveyancer who must attest the deed.  The Electronic Deeds Registration System will therefore place even more responsibility on the conveyancer.  It will be a very sad day in the history of our land registration system if this relationship between the public sector and private sector, guaranteeing ownership is jeopardized by allowing non professional individuals to perform the functions of conveyancing.  Should this ever occur, title insurance will be the only option to safeguard ownership.  This in itself would be a travesty of justice in that the previously disadvantaged will now not have the opportunity to benefit from the secure land registration system which was afforded to the privileged few that could previously own land In South Africa.

The Chief Registrar in writing commented on this issue as follows and I quote “if they want to open the conveyancing profession for secretaries and paralegals, we have to resist it with all the might that we can muster.  It is also of great concern that the Competition commission did not consult with the Department of Rural Development and Land Reform, more especially the office of the Chief Registrar of Deeds, before taking this gigantic leap.  According to Hernando De Soto in his internationally acclaimed work on land administration, Mystery of Capital, a country’s economy needs a solid land administration system for it to grow.  We have a strong land registration system in South Africa and we must nurture and grow it!  Allowing secretaries and paralegals to do conveyancing work would not only destroy our land registration system but also have deleterious effects on our economy as well as security of title”

Lastly it must be stated that during the 1980’s the then existing Competition Board made a thorough investigation of the Attorneys Act of 1979 and the Regulations and Rules thereunder.  One of the issues was whether the statutory preservation of conveyancing for members of the legal profession was “still justified in the public interest.”  During March 1988 and after a thorough investigation, the Director of the then Competition Board wrote to the Council of the Association of Law Societies (as it then was) and advised that the Competition Board had concluded that “the statutory reservation of conveyancing for members of your profession was indeed justified in the public interest, a view which remains unchanged’.

It is trusted that sanity will once again prevail.

Allen West
Deeds Training

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