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Vesting transfers and expropriations

7 February 2013

Generally land ownership is conveyed from one person to the other by way of deed of transfer which is registered in the deeds registry. Transfer of that land is deemed to take place upon the execution of that deed by the Registrar. In terms of section 8 of the Expropriation Act 63 of 1975 (hereinafter referred to as “the Act’) ownership of property passes immediately to the expropriating authority upon service of the expropriation notice on the owner or his/her ex officio representative. This suggests that transfer of ownership is not reliant on execution of a deed of transfer.

It is this legislative principle that needs to be understood in order to grasp the concept of expropriation. From the date of expropriation the expropriator can enter and take possession of the land subject to reasonable arrangements with the previous owner. Up until the expropriator takes possession of the land the previous owner shall remain liable for all the normal rates and taxes applicable to that land as well as the use and enjoyment thereof, despite ownership having passed to the expropriator on service of the expropriation. To his/her protection section 8(5) of the Act grants such owner the right to place the minister of the expropriating authority itself on terms to take possession of the property on a particular date upon which date the owner’s responsibility towards the preservation and upkeep of the land shall cease.

Noting of expropriations on deeds office records
For deeds registry purposes expropriation transactions can take place in the form of the initial expropriation notice served on the Registrar in terms of section 31(6) of the Deeds Registries Act 47 of 1937, whereupon such expropriation interdict shall be noted against the title of such land. Should the expropriating authority be unable to obtain possession of the title to such land or real rights then an affidavit to that effect must be lodged in terms of section 31(2)(b) of Act 47 of 1937. The examiner will then issue the necessary caveat to the effect that only the deeds office copy of the title has been endorsed regarding the expropriation.

The necessary electronic data capture is done and the notice reflects in the deeds data records. If it is only a portion of the land that is sought to be expropriated, then a sketch showing the estimated portion and its extent shall accompany the notice.

Effect of noting of expropriation on property and owners
At this stage both the owner and the expropriator will be prohibited from dealing with the land under certain circumstances. In terms of section 31(5) of Act 47 of 1937 the expropriator must first take transfer of the expropriated land before dealing therewith in the deeds registry, and the owner is prohibited from dealing with land to the extent that it has been expropriated. The effect of this is that the owner will not be able to deal with the land if the whole of it has been expropriated, since ownership of the land was lost when such owner received the notice of expropriation (section 31 (6)(b) of Act 47 of 1937). In the instance where it is only a portion of such land that has been expropriated the owner will be able to deal therewith, subject to the expropriation noted thereon.

In future when the expropriating authority wishes to take separate title for the expropriated land they can lodge the deed of transfer in Form G or cession of the real rights in the prescribed Form RR together with other prescribed documents such as the section 31(4) of Act 47 of 1937 compliance certificate and the diagram, if applicable. At this stage the deeds registry data records will reflect the previous expropriation notice. Where the title of the land was previously not lodged for endorsement regarding the expropriation the examiner can now bring the endorsement onto the client’s title before endorsing the transfer of the expropriated portion. The EX-interdict can then be withdrawn and the caveat purged. The transaction can also take the form of a simultaneous noting of the expropriation notice and the taking of title for the expropriated portion of land or cession of expropriated real rights mentioned therein. In this instance the expropriation notice is no filed at interdict section, but forms part of the supporting documents for the transaction. A diagram of the expropriated land must also be lodged together with the transaction if only a part of the land is being expropriated. Another crucial document to accompany the transaction is the section 31(4) certificate to the effect that any other legal provisions in connection with the change of ownership of the land as a result of expropriation has been complied with. In terms of RCR 5 of 2009 we do not require clearance certificates for all expropriation and vesting transfers. Transfer Duty is also not payable for the transaction. The examiner will then endorse the title of the land to the effect that such land or real rights have been ‘expropriated and transferred or ceded’ as the case may be.  Again should the expropriating authority be unable to obtain possession of the title to such land or real rights then an affidavit to that effect must be lodged in terms of section 31 (2)(b) of Act 47 of 1937. The examiner will then issue the necessary caveat.

Vesting transfers
Vesting transfers on the other hand occur mainly by legal succession by an authorised authority to assets and liabilities of a previous owner sanctioned by legislation. Depending on Which authority has acquired such land forming part of the assets of the erstwhile owner, section 16 of Act 47 of 1937 may find application. This section can be followed where such authority is the State or Local Authority acquiring “the whole of the land” under a particular registered title. With regard to municipalities, section 16 can only be invoked where a municipality acquires the land as such from another municipality. Transfer is indicated by way of endorsement of the existing title of the land to indicate the acquiring authority as the new owner by expropriation or other causa. Clearance certificate and transfer duty will not be required where the cause for the acquisition is expropriation. The other prescribed documents for the transaction must still be lodged.

In another scenario, a legal entity may by relevant legislation other than Act 47 of 1937 succeed to the assets and liabilities of the previous owner of a piece of land. The enabling legislation usually specifically provides for the manner of noting of such succession. Where the manner of acquisition includes taking of transfer of the acquired land then such acquiring authority can take out a vesting transfer in respect of the land.

Reader Comments: 13
Miss WAR 08/02/2013:

Can you confirm if ALL land that is by the railway line is currently owned by Transnet by virtue of vesting in terms of the Legal Succession Act. Transnet has properties that are still in the name of third parties. These properties were clearly not endorsed at the deeds office. However Can we blanketly confirm that Transnet owns them even though its name doesn't reflect at the deeds office?

MISS DAISY 02/07/2014:

What are the prescribed documents needed for a vesting transfer to be lodged in the Deeds Office? Is the original title deed required as well as bond holders consent?

Marisa 11/07/2014:

I would like to know if I need to lodge a rates clearance certificate on a subdivision vesting transfer.... according to CRC 5/2009 - no Rates Clearance Certificate is required. What would the prescribed documents be that we need to lodge at the deeds office if no rates clearance certificate is required and no transfer duty receipt. Thanks.

Allen West 17/07/2014:

The documents to be lodged with an expropriation/vesting transfer will depend on the circumstances prevailing. Bonds and bondholders consents are not necessary. The title deed must be lodged but if unavailable the certificate as provided for in section 31 must be provided.  A certificate in terms of section 31(2) (a) must be provided If a subdivision is being effected, the diagram must be lodged. The Practitioners Guide to Conveyancing and Notarial Practice by AS West discusses this in more detail.

MOGIE 22/07/2014:

Please kindly advise if I am doing Section 16 and the original title deed has been lost and a VA replaced same and now the VA is also lost - and the title deed from which the property is being transferred just has an endorsement. Do I do the Section 16 on the original lost deed or the new title deed that had just the endorsement. 

Allen West 24/07/2014:

You have to apply for a certified copy of the title for which the VA has been issued. As soon as a VA is issued the original title becomes redundant.

baysie 25/07/2014:

I am doing a transfer and there are pages of the title deed missing.  The bank cannot find the missing pages and this is an urgent transfer. What do I do? Thank you.

Robin Twaddle 01/08/2014:

Baysie, you need to apply for a VA in terms of Reg 68(1).

ANAND 12/08/2014:

I agree with Mr West. Also note that all facts must be stated in the application for a certified copy. i.e you are applying for a certified copy of a copy.

Ebrahim 25/06/2015:

What happens in the event of an expropriation that took place in 1987, but has not been noted on the title deed, though the property changed hands about a dozen times, and now the new owner finds out that a portion of his property was expropriated but never endorsed on the title deed.

Annerike 01/09/2015:

What does the legal position entail of an owner if this procedure has NOT been followed? Meaning that no endorsement has been made in the Deeds Office against the deed of title and does therefore not show anything regarding the expropriation on the system. Did expropriation then not take place?

CORNELIA LEONARD 03/05/2017:

I am transferring a property from a private seller to the municipality. I have done research and cannot find which documents needs to be lodged at the deeds office in Johannesburg in order to transfer the property into the name of the purchaser being the municipality. I am under pressure as want to lodge soonest. This is not your "normal" transfer. It is not expropriation. Many many thanks for helping. I look forward to your response. 

allen west 05/05/2017:

The normal documents required for any sale of land must be lodged:  viz Power of Attorney; Rates Clearance; Title deed; Bonds for disposal. In terms of CRC 12/2004 no TDR is required.

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