Communal property associations

The Communal Property Associations Act, 28 of 1998, allows for communities to form juristic persons called "communal property associations" (CPAs) and to hold and manage immovable property under a written constitution. For example, 120 households on 540 hectares of land, of which the ownership vests in a CPA, should register the CPA at the Department of Land Affairs. Thereafter the CPA should form an internal committee to administer its affairs. The CPA's constitution will, among other things, prescribe how to acquire a household site in communal land held under a CPA; what the procedures for the alienation of the land are; regulate alienation of CPA property to non-members; describe the dissolution and liquidation of the CPA; giving of proxies, etc.

The actual households within such a community will only enjoy land usage rights, which are tantamount to personal rights. In tribal communities the tribal authorities wield executive/political powers with regard to the members in their capacity as citizens, but the CPA is an absolute owner. Tribal officers such as chiefs and headmen can also be members of a CPA.

Land rights
The CPA owns the land and as such it allocates unsurveyed sites to users, hence a beneficiary thereof is not an owner but a user, enjoying merely a personal right. The user may abandon a site and the CPA, as owner, may simply re-allocate it to the next beneficiary. After such site has been re-allocated to the next beneficiary, the previous user may not claim it back unless the CPA decides otherwise. Once a CPA has been formed, common law principles prevail over indigenous law principles. However, if a CPA is formed in respect of state land and such land is under a tribal authority, the CPA must obtain certain consents from the tribal authority, if necessary. Household sites may not be alienated as separate entities.

Where a CPA is registered in terms of section 8(3), it will be issued with a registration number and a certificate of registration. Thereafter the CPA may acquire immovable property, with relative powers to alienate same.

It is also possible to register a provisional CPA, in terms of section 5 of the Act. The latter will also be allocated a registration number, although the certificate that will be issued in this regard is a provisional community property association certificate. It is interesting to note that this type of CPA will not be able to acquire ownership of immovable property until registration has been finalised in terms of section 8. However, it may acquire a 12-month right to occupy and use land, which right shall not be alienated until registration of the CPA has been finalised.

Impact of the Act on deeds registration practice
From the outset it must be mentioned that communities may opt for one of the following communal land dispensation options, namely:

  • A Communal Land Trust;
  • A section 21 company, registered in terms of the Companies Act 61 of 1973;
  • A Less Formal Township Establishment in terms of Act 113 of 1991 for residential areas;
  • A Communal Property Association;
  • A Tribal Settlement with Indigenous Land Tenure Systems (an indigenous community).
Communal land trusts, section 21 companies, tribal communities etc., may all form CPAs, however, the thorny question is whether such formation of a CPA is a mere change of name or an absolute conversion to a different entity, especially if they are already owners of immovable property. If the latter is the case, what procedure should be followed?

Should a communal land trust already own the land, e.g. Ingonyama Trust or any other trust, and the community decides to form a CPA, this invariably leads to a new juristic entity and is not simply a change of name, as it might seem to purport. Therefore, from a deeds registry perspective, a transfer of rights is perceived and deeds cannot be endorsed on lodgement of an application for such conversion, based on the analogy of section 44 of the Companies Act 61 of 1973. This is especially the case where communal land was owned by a section 21 company which has now become a CPA, (yet another juristic person with a different founding constitution!).

The latter cannot be merely seen as a conversion because the registered owner (the trust) will convert and adopt a communal written constitution, with a different mandate, purpose and degree of competence, etc. An absolute change in persona takes place and for that reason it is not a simple change of name, thus a formal transfer must be effected.

In conclusion, practice must be developed to accommodate the above curve balls lobbed by the advent of CPAs.

Readers' views on this will be appreciated - Editor

Republished with permission from SA Deeds Journal

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