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Vesting property in SANRAL

6 February 2014

Before the South African National Roads Agency (SANRAL) came into existence, the South African Roads Board (SARB) was responsible for enhancing your travel experience as well as improving and maintaining the national road network for the social development and economic growth of South Africa. The SARB was part of the department of transport and was mandated to perform its functions in terms of the previous National Roads Act of 1971. The South African National Roads Agency Limited (hereinafter referred to as SANRAL) and was established In terms of the National Roads Act 7 of 1998 (hereinafter referred to as NRA) as a corporatized successor to the SARB and was registered as a public limited company on 19 May 1998.

Consequently, land and any real rights in land previously belonging to the disbanded SARB vest in SANRAL. Section 7 of the NRA specifically entitles the Agency as successor to certain property, assets and liabilities. Without doubt, this is where the Registrar of Deeds plays a very significant role of ensuring that such land, servitudes or any other registered real rights in respect of land previously held by SARB is vested officially in the name of SANRAL and that the respective Deeds Registry records are updated to indicate the current position.

This has, however, not come easily. There have been several challenges, disagreements and irregularities, in bringing the provisions of section 7 read with section 41 to reality. Several Registrars’ circulars and RCR’s were passed and withdrawn all in an attempt to create a practical, favourable as well as legally sound disposition. This work primarily focuses on CRC 1 of 2002 and the related CRC 9 of 2011. It is noteworthy that these two CRC’s are interdependent only to the extent of section 40 of the NRA. CRC 1 of 2002 however includes other matters not relevant to CRC 9 of 2011.

This work is targeted at junior examiners who find it challenging to deal with vesting transfers relating to SANRAL and endeavours to elucidate on these CRC’s. Although the Deeds Practice Manual currently does not have an elaborate discussion on SANRAL, there are CRC’s and undoubtedly RCR’s intended to offer as much guidelines as possible on the issue. In essence, this CRC give guidelines on how to endorse deeds in terms of the provisions of SANRAL and NRA, 1998 (Act 7 of 1998). It is also purposed at addressing the issue relating to payment of fees as well as other registration matters that were not addressed in CRC I of 1999.

An expropriation is an instance where the state acquires land belonging to a private person for public use subject to powers emanating from a legislative enactment. A vesting is an ex lege instance by which an organ of state takes over property registered in the name of another organ of state. Section 31 of the Deeds Registries Act deals win born instances. Since SANRAL is an Agency created by statute to take over the former SARB; it is indisputable that both vestings and expropriations will be done in its favour. Essentially, CRC 1 of 2002 deals with five major topics being:

Passing to and vesting in SANRAL of land in terms of section 7(2) of the NRA
By operation of law, all land that belonged to the SARB and any servitude thereon as well as land or any servitudes/real right in land acquired by SARB in terms of the 1971 Act (previous National Roads Act) in connection with National Roads and/or any State land on which a national road / servitude / real right is situated, vest in SANRAL. This includes any right to use land temporarily which may have been acquired by SARB. It also extends to any State land on which a national road is situated, or any servitude or other real right with regard to land held by the State. This vesting is noted on the relevant title in terms of section 31 of the Deeds Registries Act in respect of land and section 32 of the said Act in respect of servitudes.

As is the case with any vesting transfer done under the said provision, no notice is required. All that is essential here is that once an application is lodged for the noting of the vesting in the deeds registry records, an examiner must disclose on the relevant title that the “within mentioned property/ies now vest in SANRAL” and provide space for numbering to disclose the “BC” number. This application does not attract fees - A vesting of this nature is not in any way unique from the ordinary vesting transactions that have existed since time immemorial.

Minister of Transport may declare any State land as having passed to and vested in SANRAL in terms of section 7(4) of the NRA
If anything unique exists in as far as vesting on SANRAL is concerned, then it is probably this second aspect addressed by the CRC. Any State land not mentioned in section 7(2) may be declared by the Minister of Transport to have vested in SANRAL. In this particular case, Notice must be published in the Gazette and a copy thereof must be lodged with the application. The publishing of a Notice in the Gazette does not by any means render this to be an expropriation if regard is given to the definition of the word. It remains a vesting because it is done on state land. The notice itself is not an expropriation notice and it is conceived that it will not be couched as such in the Gazette. There will therefore be no noting of disclosing of the “EX” code on the title deed. The application gets a “T” code and attracts no fees. The title deed will be endorsed with the endorsement disclosed on CRC 1 of 2002 upon written application by the Minister of Transport. This practice is to be applied only if all the land held by the respective title deed vest in SANRAL otherwise section 31/32 of Deeds Registries Act, 47 of 1937 must apply.

Declaration of National Roads or withdrawal of such declaration. Section 40(1) of the NRA
In terms of section 40(1) of the NRA, the Minister of Transport has the power to declare any road to be a national road. Jointly with this, the Minister also has the power to withdraw or amend such declaration (section 40(4) of the Act). Consequently, this means that not all declarations so made will remain permanent. The CRC therefore provided guidelines as to what to do in instances where a declaration is made and what to do should it be withdrawn or amended as the case may be. In this particular instance, the Minister will publish the declaration in the Gazette. An application will be brought by the Agency accompanied by the relevant title deeds. The application gets a BC code and the title deeds are endorsed in a manner disclosed in CRC 1 of 2002.

In the case where the title deed is not lodged with the application the office copy must be lodged and a caveat must be noted for future endorsing of the client’s copy. Remember that should the withdrawal or amendment of such declaration be lodged, the same procedure will be followed subject to rephrasing of the endorsement. An endorsement in terms of section 40(4) is merely a factual endorsement and attracts no office fees regardless of the typographical error on the CRC. It is noteworthy that his procedure can only be followed if all land in the title deed has been declared as a national road. If this is not the case, then such land must be subdivided and the portion so declared should be transferred to SANRAL.

It is this particular aspect of the CRC that brought about the necessity for the issue of a further CRC 9 of 2011. The powers afforded to the Minister in terms of the said section 40(1)(a) might result In certain land having to be subdivided. Seeing as this is primarily land that was previously a public road, it is inevitable that this may result in contravention of the Advertising on Roads and Ribbon Development Act, 21 of 1940. One of the conditions imposed by this Act is that land (usually along public roads) may not be subdivided without the consent of the Premier.

However, this Act applies to public roads in this case; we have a former public road now having been declared to be a National road. Consequently, the Premier cannot give consent on grounds that once a declaration has been made; such road is for all intents and purposes deemed to be a national road. The power to consent to anything in respect of a national road vests in SANRAL. In this case, we have a situation of a transferee also being the authorizing authority for the consent. This is because a subdivision needs to be done on the property so that such portion of land can be transferred to SANRAL and the relevant body to consent to the subdivision is SANRAL seeing as such land has been declared to be a national road.

As a result, CRC 9 of 2011 was issued to the effect that consent where land that has been declared as a national road is being subdivided and transferred to SANRAL, no consent should be sought. Furthermore, the CRC guides that in such subdivision, all conditions in relation to Act 21 of 1940 should be brought forward into the deed of transfer. The title deed of the land must contain a condition or endorsement regarding the declaration of national road as envisaged in CRC 1 of 2002. The deed of transfer (sub-divisional transfer) must refer to the declaration and transfer of the national road to SANRAL.

ProhibItIon of constructIon of structures on national roads In terms of section 48(1) of the NRA
In terms of the above statutory provision, the Agency must approve all constructions and establishment of structures on over or below the surface of a national road. This is a requirement even where structures are to be constructed on land in a building restriction area or if alterations are to be made on any structure of such nature. The approval must be done in writing and may result in the imposition of further conditions having to be noted on the title deed (sectlon 48(3)(a)(iii)).

Section 48(4)(a) provides that where the agency has imposed an obligation on the owner of the land to remove a structure or other thing from the land in question then such obligation must be noted as a condition on the title deed of the land affected. An application in this regard will be brought by the agency, accompanied by the title deed of the land. The application will get a “BC” code and title deed will be endorsed as stated in the CRC.

Subdivision and consolidation of certain land in terms of section 49(1)
Similar to section 48 of the NRA, section 49 also places restrictions on the subdivision as well as consolidation of land in building restriction area. Approval must first be sought from the Agency evidencing the necessary permission to subdivide or consolidate as the case may be. CRC 1 of 2002 states that the Deeds Office need to require the lodgement of a document of approval as it would have been lodged with the Surveyor General’s office before diagrams are approved.

What I fail to understand though is how is the Deeds Office to know which conditions (if any) must be brought forward. In terms of section 49(3) the approval to subdivide/consolidate may contain further conditions imposed by the Agency which conditions would have to be inserted in the deed of transfer upon transfer of such land (section 49(5)(a)(i)). It is opined that the examiner should at the least require some confirmation from the Surveyor General stating that there are no conditions to be imposed or disclosing what (if any) conditions should be disclosed. However, despite the absence of an express provision in the CRC, the examiner is in a position to ask for a copy of such document to be lodged when dealing with the transaction in the deeds registry in terms of section 4(1)(a).

Where such conditions are imposed on the remainder of the subdivided properly then the title deed of the remainder must be endorsed to note such conditions (section 49(5)(a)(ii)). In a case where conditions imposed in terms of section 49(3) apply to land that is being consolidated with other land, the Agency may stipulate that the conditions apply to the whole of the land so consolidated. It is arguable through that word “may” in the CRC implies that the Agency may as well stipulate that the condition remains applicable only to the initial portion to which such conditions applied in which case plotting will have to be done to ring the conditions forth and the consolidation diagram would have to indicate such.

Since the NRA makes no provision for the insertion of conditions on Certificates of Registered titles, a notarial deed of creation of the conditions imposed by the Agency will have to be lodged whenever a Certificate of Registered Title is taken. The basic rule that no new conditions may be inserted in a Certificate of Registered Title if not authorized by statute applies here. However, in the case of consolidations, the insertion of conditions is provided for in section 49(5)(a)(iii). Therefore, it shall not be required for a notarial deed to be lodged for creation of conditions imposed in terms of section 48(3) or section 49(3) as they will be inserted in the Certificate of Consolidated Title.

The owner of property upon which conditions have been imposed in terms of section 48(3) or section 49(3) may subject to written approval of the Agency apply to the Registrar of Deeds for the cancellation of such conditions. The application for cancellation in terms hereof shall be lodged in a coloured cover and get a “BC” code. It should be accompanied by proof that mortgagees (if any) have been notified about the cancellation. The cancellation of conditions imposed in terms of section 49(3) is exempt from the office fees (section 49(5)(c)), but the cancellation of conditions imposed in terms of section 48(3) is not exempt from office fees (section 48(4)(a)).

It is sincerely hoped that this work will provided clarity on issues of uncertainty or ambiguity.

Khumo Makallane
Assistant Law Lecturer, Deeds Training
Pretoria

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