A fideicommissum is a legal institution, where the owner of a property transfers this property to another person, subject to it being transferred from that person to yet another person at a later stage. Usually, a fideicommissum (condition) is created in a will, according to which property is first bequeathed to the one person and then, subsequently, to someone else, i.e. in such a case, the heir (known as the fiduciarius, that is, the bare dominium owner) inherits the property and it is transferred to him/her, on condition that he/she will transfer it to someone else at a given stage. Later, the proprietary right of the fiduciarius is ended (after the lapse of a stipulated period, or when a condition has been met) and the property is transferred to the fideicommissarius (the sequential owner).
A typical example would be where a testator provides in his will that his farm should go to his son A, on condition that the farm goes to A's son B upon A's death. In this example, the testator, therefore, creates a fideicommissum with regard to his farm; A will then be known as the fiduciarius, while B will be known as the bare dominium owner.
A fideicommissum (condition) does not necessarily only have to be created in a will, but it can also be found where, for example, property is donated.
How is a fideicommissum created and registered?
The fideicommissum (condition) is created in the Power of Attorney and is brought forward in the deed, i.e. the executor in the deceased's estate must transfer the farm to A, subject to the fideicommissum. In other words, the deed is made subject to the fideicommissum.
A is not described as a fiduciarius in the vesting clause. The only way of determining whether the property that was transferred to A is indeed subject to the fideicommissum, is by reading the testamentary condition in the deed.
What happens when A passes away?
When A passes away, his executor will have to transfer the farm to B, in terms of the fideicommissum condition and not according to A's will. The will doesn't even have to be lodged. Because it is transferred according to the fideicommissum condition, reference must also be made to the condition in the causa.
A further example of where a fideicommissum appears as a testamentary condition in a title is:
A husband and his wife are married in community of property and have a mutual will. In the will, the estates are massed. The husband passes away and his wife receives all his farms, subject to a fideicommissum in favour of their son. The wife has adiated (i.e. she has accepted the conditions of the will). In the causa, reference is made to their marital status, estate massing, adiation, etc. The farms are transferred to the wife, subject to a fideicommissum in favour of their son.
After a few years, the wife passes away. How will her estate be administered?
- The estate is administered in accordance with the fideicommissum in the title. (The executor of the wife's estate transfers the farms to the son).
- The will is not submitted.
- In the causa, reference is only made to the fideicommissum.
How is property transferred that is subject to a fideicommissum?
Before this is explained, it must be remembered that the fiduciarius only has a fiduciary right to the land. What is the content of this right? What does this mean?
The fiduciarius is the owner of the land, but this is a limited proprietary right, i.e. he can deal with the property as far as he is permitted by the fideicommissum (condition). This usually means that the fiduciarius may not transfer the land unless subject to the fideicommissum.
There are, however, exceptions to the above rule and the most important from the point of view of the deeds office, is section 69bis(1) of the Deeds Registry Act.
This section stipulates that the fiduciarius and the fideicommissary heir can jointly transfer their rights. The most important limitations of section 69bis(1) are:
- The fideicommissum heir(s) should be determined and proven.
- They should have the contractual capacity to act.
- The Master's approval or court order should be lodged, where necessary.
In the deeds of transfer, the transferors should be described as follows:
* A ... Identity number ... Status ... Fiduciarius
* B ... Identity number ... Status ... Fideicommissary Heir
The fideicommissum is then omitted from the deed. In the instance of the waiver of the fideicommissum condition by the heir, the waiver is filed with the new deed as a document. The transferor then acts alone and the land is transferred free from the fideicommissum.
Mortgaging - Section 69bis (3)
In the following circumstances the fiduciarius may mortgage the property:
- Where the fiduciarius only wants to mortgage his fiduciary right to the land with a bond, unless it is forbidden by the conditions of the fideicommissum. In such a case, the land will be mentioned as security in the bond, subject to the fideicommissum.
Where the fiduciarius mortgages his fiduciary right to the property and the fideicommissary heir simultaneously waives his preference, in favour of the bond.
- The bond must then be made subject to the condition.
- Power of attorney to waive should be submitted by the fideicommissary heir. It is filed with the mortgage as a document.
- The bond endorsement in the title must be qualified.
- When they are determined and competent, fideicommissary heirs can also waive their fideicommissum rights notarially, simultaneously with the registration of the bond. Where the fiduciarius and the fideicommissarius (if he is competent) jointly mortgage their respective rights to the land with the bond (section 69bis (3)).
Fideicommissum Condition in Deed - "Children may be born"
A, as fiduciary owner and B, her son as fideicommmissary heir, transfer property to a CC. The property is subject to the following condition:
The mentioned farm goes to our daughter (A), with the understanding that, in the event of the death of our mentioned daughter, the farm will be transferred in equal shares to the children who are to be born to her, or who may still be born. When A dies and her estate is administered, her children should be proven and the fact that she could not bear more children. To prove that those "children may be born", a court order is necessary to prove that (A) cannot bear children any longer - see RCR 28/87 and Jones 4th edition, p 385 in this regard.
Curator in the insolvent estate
A is the owner of land and the title is subject to a fideicommissum, in favour of the children born from his marriage.
The fideicommissum determines that when the testator has passed away, the property must go to the children born from this marriage. The testator has passed away and the children can, therefore, now be determined. He has three children. One of the children has passed away and is insolvent. How will the property now be transferred?
- If the son has passed away before the fiduciarius (father), his right falls back to his father (because he only has a hope and not a vested right. He can only claim it if he is alive).
- If he passes away after the fiduciarius, it will vest in the curators at insolvency. The deceased's son's children may also not receive it.
For more information you can read Jones 4th edition, Heyl's Grondregistrasie in Suid-Afrika and Die Beredderingsproses by A.P.J Bouwer.
Republished with permission