FILTERS:

Vesting of a property in a trust

4 October 2012

The vesting of a property (especially immovable property) in a Trust has always been a bone of contention in the legal fraternity.  The controversy stems from the unique position of the trustee, vis-a-vis third party interest to ascertain the correct ownership of every property registered in a deeds registry.  The matter was really brought into the limelight when the court in the case of Joubert and Others v Van Rensburgh and Others 2001 (1) SA 753 commented in passing that there is no justification in the Deeds Registries Act 47 of 1937 (the Act) for the Registrar to register trust property in the name of "trustees from time to time of a Trust".  This stemmed from the fact that section 16 of the Act referred to the transfer of property to another "person" and a trust is not generally recognised as such.  On the other hand, section 11 of the Trust Property Control Act, 57 of 1988 implores the Registrar to ensure that trust property must be recognised in such a way that is clearly identifiable as such.

The continued practice of registering trust property in the "trustees of the trust" was an attempt by the Registrar to comply with that provision despite the legal position of a trust under the Act.   Because a trust or other voluntary associations not having own separate legal personality, it became the Registrar's duty to ensure that where a trust or an association acquired property, its founding document provided for such.  In respect of "inter vivos" trusts the matter is covered by the responsibility of the preparer of the document and where the trust is created in a Will, the Will must be perused to make sure that the transaction is covered therein.

In reaction to the judge's obiter dictum in the above mentioned case, the Chief Registrar initiated the amendment of the Deeds Registries Act (see Act 9 of 2003) to include a trust in the definition of "person".  To the Chief Registrar's admission such and amendment ended up causing even more confusion than clarity as it seemed to exclude movable trust property from the extended definition of "person".  Would the deeds registry be able to register a notarial bond over movable property in the name of a trust?  CRC 6 of 2004 only raises this dilemma, but falls short in addressing it in the end.  Is it therefore so that the specific mention of immovable property in the definition of "person" in the Act was deliberately meant to exclude movables.  Except for CRC 6 of 2004, the writer is not aware of any other avenue utilised to circumvent this lacuna.  It therefore appears that section 102 of the Act will not be available as authority for the Registrar to register bonds over movable property, in the name of a trust. 

With the repeal of the Communal Property Act, 11 of 2010 it also appears that the deeds registry will, from the date of the repeal of the Act, (unless otherwise directed) be unable to register property in the name of a "community" since the amendment of the definition of "person" in the Act was occasioned by the coming into effect of the Communal Property Act.  Examiners are implored to be vigilant in this regard. 

Instead reliance was put on the Communal Land Rights Act to somehow remedy the situation.  Now it is common knowledge that the Communal Land Rights Act has come and gone and so did the cover that is supposedly offered to the deeds registries to continue registering property in the name of a trust.

We seem to be back to the pre Act 9 of 2003 position. 

Sydney Mekwe 
Deeds Training 
Pretoria

Reader's views will be appreciated - Editor

Reader Comments: 2
Ken Mustard 18/10/2012:

The Deeds Registries Act was amended in 2003 to include a trust in the definition of person for the purposes of registration of immovable trust property. See section 2 of Act 9 of 2003.

Ken Mustard 19/10/2012:

Sorry, my previous comment went off incomplete. The deeds office only registers ownership in immovable property. Had the word immovable not been used it may have implied that the deeds office could register moveable property!  A notarial bond records a charge over moveables. Unlike a mortgage bond, the deeds office does not record ownership of the mortgaged moveable property.  Remember section 15A does not apply to notarial bonds.  The notarial bond is executed before a notary and registered (recorded) by the registrar.  I do not think the the registrar should decline to register a notarial bond that has been executed before a notary by "the trustees for the time being" of a particular trust.

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