- I take this opportunity to comment on the discussion (hereinafter referred to as "the discussion") in the article Home owners associations published in the GhostDigest on 23 March this year.
- The discussion stems from prevailing uncertainty "as to when the consent from the Home Owners Association (HOA) must be lodged where a condition in favour of the HOA is being created in the power of attorney to pass transfer" and, in essence, concludes that a Registrar of Deeds should depart from the "given fact that where the condition is created in the power of attorney, such condition is only operative as from registration", and insist on the lodgement of such consent, where the condition being created reads as follows:
"The erf may not be transferred to any person who has not bound himself to the HOA ……..".
- Further, the conclusion reached in the discussion is influenced by a felt need to possibly prevent a situation in which a township developer/owner does not automatically become a member of a HOA when a township is established or a small-scale sub-division is approved.
- With all due respect to the author of the discussion and for the reasons set out hereunder, I am unable to subscribe to his conclusion and the basis thereof.
- As a matter of trite common law and as clearly contemplated in section 20 of the Deeds Registries Act, 1937, a Power of Attorney, authorising a Conveyancer to act on behalf of an Owner (in this case, a Developer), cannot bring about a state of affairs which would not have resulted had the Owner (Developer) personally executed a deed of transfer in the presence of a Registrar of Deeds, which deed of transfer was witnessed by the Registrar.
- In the result, the requirement to "create a condition in a Power of Attorney" serves no purpose other than to provide written evidence of specific authority granted to a Conveyancer, in his/her capacity as attorney/agent of a Transferor, to actually embody/incorporate the condition in the draft deed of transfer.
- Moreover, if regard is had to the fact that the condition is imposed by the Developer with a view to restrict the right of ownership of the Transferee (and, obviously, not the right of ownership of the Developer himself/itself as Transferor), it becomes abundantly clear that the condition takes effect immediately after registration of transfer of the erf in the name of the Transferee.
- Most interestingly, in my opinion, it could never have been the intention of the Developer that a condition that reads "The erf may not be transferred ………" should take effect from a point in time which is different from that of a condition that reads "The owner of the erf may not transfer …………". It is a case of saying exactly the same thing in different words but with the same effect.
- The Registrar's main duty, in the circumstances, is to consider whether the condition is registrable or not and, if so, to register it and to guard against its violation henceforth.
- The predicament referred to in paragraph 3 hereof can properly be circumvented, among other things, by following the example in Condition 1.14.1 of the Declaration of Montana Extension 99 as Approved Township, published under Local Authority Notice No. 795 on page 5 of the Gauteng Provincial Gazette Extraordinary No. 120 dated 28 March 2006, whereby "The developer is deemed to be a member of the Section 21 Company, with all the rights and obligations of an ordinary member, until the last erf has been transferred".
- In conclusion, I make the observation that, the responsibility to prevent the predicament referred to in paragraph 3 above falls squarely on the shoulders of the Developer and/or the relevant Local Authority and, therefore, outside of the scope of the duties of the Registrar.
THEMBA MABASA ATTORNEYS
30 June 2006