Introduction
For time immemorial registrars of deeds have been registering notarial tie-agreements which have the status of a personal servitude, and are capable of being registered under the provisions of section 65 of the Deeds Registries Act 47 of 1937.
Format
The notarial tie-agreement must be entered into between the owner or owners of the land being notarially tied and the person enforcing the tie-agreement. The enforcer could be the local authority, bank or any person or entity who would derive benefit from the properties being tied.
Different Owners and/or different Deeds Registries
In terms of RCR 17 of 1961 and confirmed by RCR 1 of 1966 the registrars of deeds resolved that it is possible to tie properties where such properties are held by different owners. It is thus not necessary that the properties being tied have to be owned by the same person.
Where the properties to be notarially tied are situated in jurisdiction areas served by different Deeds Registries, for example Johannesburg and Pretoria, a notarial deed encompassing both properties must be registered in each Deeds Registry on the same day, i.e. simultaneous registration must occur.
Bondholders Consent
Where two or more properties are tied, the bondholder of any bond registered against any of the properties, forming the subject of the agreement, must consent to the registration of the tie agreement, free from the bond (see section 65(3) of the Act).
Subject of Tie-Agreement
In terms of RCR 44 of 2010, it is not permissible to register a notarial tie-agreement in respect of a long term lease agreement and land, in order that the land and the lease agreement cannot be separately be dealt with.
The properties as already mentioned do not have to be owned by the same owner and can be situated in different property registers, administrative districts, Provinces, etc.
Operative Clause of the Agreement
As with all notarially prepared agreements there is no hard and fast rule as to the exact wording, however, the following wording merely serves as a guideline:
"That the owner of the above referred to properties and the City Council of Tshwane hereby agree that the said properties shall be tied together and be regarded as one property for all intents and purposes."
Any ancillary conditions to the agreement must also be contained in the notarial deed.
Rates Clearance Certificates
No rates clearance certificate needs to be lodged.
Adding or Removing of Properties
Should it be required to either release certain properties or add additional properties to a tie agreement, the initial agreement must be cancelled and a new agreement must be entered into. This can be effected, if so required, in one bilateral notarial agreement entered into between the owners of the land and the enforcer of the tie agreement.
Undisclosed Principle
A tie agreement cannot be created as a stipulatio alteri, i.e. in favour of for example a body corporate not in existence at the time of creation of the condition, as there will be nobody to accept the negative personal servitude as required by the last proviso to section 65(1) of the Act.
Certificates of Consolidated Title and Tie Conditions
Where two pieces of land are consolidated and the components are subject to a notarial tie agreement, the condition must be perpetuated in the certificate of consolidated title and the registrar of deeds will endorse the certificate of consolidated title as to the lapsing of the condition. However, the enforcer of the tie condition must lodge a consent to the issuing of the certificate of consolidated title and the lapsing of the tie agreement (see RCR 21 of 2008).
Forced Sales
Where only one of the properties which have been notarially tied is sold in execution or by the trustee of an insolvent person, the agreement will have to be cancelled, prior or simultaneously with the transfer; alternatively both properties will have to be transferred together. The properties cannot be separately dealt with, irrespective of whether it is a forced sale.
Registration of Mortgage Bond
Where two or more properties are notarially tied, the separate entities cannot serve as security under the mortgage bond. All the properties forming the subject of the agreement must serve as security under the bond.
Untying of Properties
Should the enforcer no longer wish to enforce the notarial tie agreement, such agreement can be cancelled by virtue of a bilateral notarial agreement entered into between the owner(s) of the land and the enforcer of the condition, as provided for in section 68(2) of the Act. Alternatively, the enforcer can prove unilaterally the waiver of the condition, in which case the provisions of section 68(1) can be invoked to cancel the condition. For the untying of the properties or cancellation of the tie agreement, no bondholders consent is required.
Allen West
Property Law Specialist
MacRobert Incorporated
Reader Comments:
Can two properties on the opposite side of street be notarially tied - reason - apply for rezoning on one, not sufficient parking available, but property over the street belong to same owner - can we notarially tie in order to provide / meet parking requirements?
There is nothing prohibiting it.
Allen, Thanks for the article. I currently have a simultaneous application for subdivision and a notorial tie and wanted to know if I should request that a notorial tie be finalized first before the subdivision? Who is supposed to sign off the notorial tie agreement, does it have to be registered at the deeds’ office or the municipality (the legal section or planning section) have powers to conclude a notorial tie.
Hi the developer has three properties in one street they are all of the same zoning. He wants to build a shoping centre and the zoning allows it but the centre is overlaying all three properties.The advice was to do the consolidation in terms of the KwaZulu Natal Planning and Development Act but he is saying it takes too long, he wants to do a notorial tie. i would like to know if that's allowed?
Can two properties with the same owner, but different zonings, for instance, residential and business, be notarially tied?
I guess so... as the property belongs to the same owner, the business practised there might be different -but the owner is the same.
Can an erf belonging to the Body Corporate of a Sectional Title Scheme be notarially tied with the adjacent erf on which the particular Sectional Title Scheme has already been established, or must the Scheme be extended by the addition of land to the common property?
Is there a deeds registry practice of registering a notarial tie agreement over sections in a sectional title scheme?
Is it possible for erven in an approved township to be tied with a farm portion? It is in different property registers.
Hi. How does one cancel a notarial tie?
Will the bondholders consent to the tie agreement impact negatively the banks security or increase their risk..... I have a bank refusing to consent as they say their security will be affected!!!! Please advise!!!!!!!
Mark, I've a similar situation whereby one piece of land is a freehold and the other is a sectional scheme. I've got all the consents of the Provincial Government and Municipality, diagrams, etc. The Scheme is obtaining vacant piece of land for non-development in terms of a Notarial Tie Agreement and it's been a nightmare in getting the bondholders' consent. Even if you do provide them with all the approval letters, diagrams and details of the transactions to be registered, etc., they still cannot get to grip with the complexities of the transactions to be registered. You'll have to persist and push until you get them to sign off on it. I've for instance given a written undertaking that we'll not proceed unless we provide them with draft consents to be registered and which they'll have to sign. What is quite clear to us that the bank I'm dealing with doesn't have a legal representative in their bond department and therefore they're incapable of understanding these transactions and therefore must rely on their instructing firm to look after their interest. The problem, however, is in getting the bank's co-operation to send the instructions to their attorneys to act on their behalf.
I am dealing with a transfer where the owner is selling her unit (sectional title) and her garage but these 2 properties have remained separate and have been notarially tied. What I need to know now is when I lodge this matter do I lodge 2 transfers (i.e. 2 powers of attorneys and title deeds) as I don't think a notarial deed of cession applies? I just need to know what I need to lodge to have this matter registered? Please help at time of lodgment already.
It is not evident whether the section and the garage are both units which have been notarially tied. Assuming that this is the position the transfer by virtue of two separate deeds must be effected and the condition relating to the notarial tie be contained in both deeds of transfer.
Should the garage be registered as an exclusive use area, the transfer of the section and the cession of the exclusive use area must be effected by a deed of transfer and the bilateral notarial cession respectively. Similarly the condition relating to the notarial tie-agreement must be taken up in the deed of transfer and the notarial deed of cession.
I need to register a Notarial tie agreement where a Developer is adding land to a Scheme before the Body Corporate is registered. In whose favour is the Notarial Tie agreement enforceable?
The agreement will be entered into between the developer and the local authority, the latter being the enforcer of the agreement.
I have to Notarially tie two erfs next to each other, however my conveyancer said that I need to lodge with the local authority's consent. What consents do I need to lodge with my agreement?
No consent is necessary as the agreement will be a bilateral one between the owner and the local authority.
Referring to comments by Mandi Hamman 02/03/2012 - is it possible to tie common property in a ST Scheme to an adjacent Erf (closed road erf) - in terms of conditions imposed by the Council, the Erf (closed road) must be transferred to the NPC AND then be notarially tied to the common property of 3 ST Schemes situated within the development area. Will consent from holders of bonds over Units in the Schemes be required?
If the Bank requires properties to be Notarially Tied as a pre-registration requirement, do we need the Council to be a party to the agreement as well, or just the Bank and the Land Owner?
A notarial tie agreement is nothing other than a type of restraint against alienation. It matters not in whose favour they are registered, as long as they are in favour of some identifiable persona in law capable of exercising the right. They can also be praedial in nature. If the bank requires the tie agreement to be in favour of the council, what will happen if the council declines to accept the benefit of the condition? Simple - it can't be registered. Notarial tie agreements seem to have some aura of mystery about them for some unknown reason. They are really very simple. All they require is a basic understanding of the laws of servitudes, and a little skill and experience in draftsmanship.
No. There is no reason for them to be a party to the agreement
Hi Allen, many a times when attending to a notarial tie agreement, I encounter the problem of the local authority asking for reason why the properties need to be tied, the local authority almost always suggests that the properties should be consolidated. Is it not the owners decision whether to tie or consolidate?? Any suggestions on the way around this?
Hi Allen, may I ask you to confirm that a rates clearance certificate is not required to be lodged with a notarial tie agreement, but a transfer duty exemption receipt is to be lodged. Is the exemption in terms of the transfer duty act or simply because there is no purchase price there is no duty payable? Your comments would be appreciated
No rates clearance certificate is required, however, as this is deemed to resort under a personal servitude, I will play it safe and lodge a transfer duty exemption certificate.
Ridwaan, remember there must always be somebody to enforce the tie agreement. If it is local government then it is their prerogative to either go the consolidation route.
If the notarial tie condition is in favour of the local authority, then it is not necessary to lodge a transfer duty exemption receipt. See CRC 14 of 2000.
Does one need to construct a single municipal connection for water and sewer once the properties are notarially tied? Or can 2 separate connections still remain?
Hello Allen, May a conventional erf be tied to parking bay sections in an adjacent ST Scheme? The reason is that the owner (who is the same) needs to enter into a notarial tie agreement for parking ratio's to be met in respect of the adjacent erf.
Herman-- it remains two properties entirely distinct from a consolidation Debra Yes.
From the discussion above it seems the only reason for a notarial tie would be that the properties cannot be bonded separately. In what way is it tied if owned by different owners, except for not being able to be bonded separately?
Is it possible to release only one of 5 properties under a notarial tie agreement, if possible what is the procedure. Can 68(1) apply?
Mariette The DRA does not allow for this. You will have to cancel the agreement and re tie the properties intended to be tied. This can be done in one bilateral notarial agreement.
Hi Allen. We are (attempting) to buy a property which consist of two separate stands (next to one another). We are planning on consolidating them as soon as the transfer is through, but have now run into issues with the bond approval, since they are not notarial tied. It seems that we would need to register two separate bonds on the two stands. Would this not complicate consolidating them later on?
Hi Allen. 1. If there are owners of two separate properties inside a Notarial tie and the one does not want the tie removed can I still request it to be removed. 2. If the tie was established by the TV union that no longer exists .. who do I request removal of the Tie through in municipality region of JHB and do I need to do this through a town planner or through a conveyancer attorney ? Thanks
Jeanne Not at all .The condition will be brought forward into the title of your consolidated property and will be endorsed as to the lapsing thereof by the registrar of deeds concerned.
Rowan -- Both properties are tied and the tie condition cannot only be removed from one of the properties so tied . However, if the enforcer of the condition no longer exists , the condition lapses and can be removed from your title deed in terms of section 68 of the Deeds Registries Act. Any act of registration pertaining to a title deed must be effected through the services of a conveyancer
Hi Allen I have a religious organisation that owns two pieces of land with a road running through it, so consolidation is not an option. One property has the church on and the other is used as a parking area. They would like to be exempted from property rates on the "parking area" as well. Will a notarial tie agreement be sufficient for the Local Authority to exempt the second property from rates?
Can a notarial tie be used to ensure access and municipal services connections to a landlocked property (no direct street access)? The property over which the access and services are to be provided belongs to the same owner, therefore registration of a servitude is not an option. The reason for the tie would be for the local authority to ensure that neither of the two properties can be transferred without first untying and registering a normal servitude.
Antoinette, the tie agreement is a mere servitude and I have my reservations if this would allow for exemption of rates. Jack, this will be the prerogative of the local authority, but can never be peremptory. While both properties are held by the same owner it would not be necessary. On transfer the servitude can be created in the new transfer.
Same owner, three different stands, each mortgaged with a different bank. The owner has built a dwelling over two of the stands, but there are no notarial ties, nor are the stands consolidated. The third stand is apart from the other two, with a separate dwelling built on it. Can this separate property then be sold at an auction?
Rikki -- I am not sure how the building plans were approved for the dwelling house which encroaches over the two erven. However, unless there is a restriction in the title of the third property nothing prohibits the dealing with it, provided the bond is dealt with.
Allen, can two properties be notarially tied if the one property is registered as a township and the other is still farmland? The farmland will eventually be registered as a township?
Two Properties different owners. A complex was built and plans passed by council based on the notarial tie agreement. The first property owner encroached by agreement on the second property with council and owners consent. Both owners agreed to house the said properties in a PTY Ltd company with a 60/40 share holding and the company was duly formed on this basis though the properties were not transferred. The notarial tie agreement was not registered at the deeds office because of the council delay and now the second owner(40%) has decided to cancel the notarial agreement . Can he do so?
Hi Allen, can two stands sharing one boundary, same owner, and located in the same township extension, sharing a common practical coherent be notarial tied instead of a consolidation?
Hi I have a transfer whereby 2 separate properties (one being a newly subdivided portion of a portion) and another property ("the Properties") have been sold to same Purchaser under one OTP but they are held under 2 separate deeds. The Properties are Notarially tied (well not the new subdivided portion but portion which is being subdivided).
Seeing that I am transferring to same Purchaser must I cancel existing Notarial Tie agreement and register a new one to tie newly subdivided portion with other property also being transferred. Can I do one transfer (the Properties set out in one deed) or must I do 2 separate deeds & PA's? This obviously affects TD as only one purchase price involved?
Hi, 4 properties, portion 4 were just subdivided and the new portion is now portion 7. The Council has consented to sub-division subject to portions 7, 1 & 2 being notarially tied. So first we'll attend to registration of the sub-division and not.tie. All 3 properties belongs to different owners. BANK 1 has consented to release of port 7 (from bond over port 4) and portions 1 and 2 are bonded by BANK 2. After this registration, then only will the owners sell the relevant portions so that they are in the name of same owner, along with consolidation of the properties.
Will we be able to apply for consolidation while the properties are still in the name of different entities? And then the transfers will be 1st in the batch and the consolidation 2ndly? (taking into account the BC and new B),
One does not have to be a" registered owner" to consolidate properties. If the registration into the name of the one entity is linked in the same batch it can be effected. However, the tie agreements prior to the consolidation is not clear.
Abe-- there is no prohibition to consolidate an erf with a farm.
Dear Allen A client owns 2 stands. One is developed the other not. He wants to notarially tie them as he was advised by the Municipality that it would reduce his rates. Can I do this without an enforcer being Local Authority or Bank. Thanks
Dear Kim One cannot notarially tie two properties without an enforcer of the condition as this will be tantamount to a nudum praeceptum. I, however, presume that the Municipality envisaged the consolidation of the two properties and not a tie agreement.
Can two properties be notarially-tied, although one is zoned Commercial and the other Residential and both properties already bonded one by FNB and the other by ABSA?
Dear Allen, We are sitting with a situation where we have an approved, proclaimed 3 erven township. One erf is a res 3 sectional title erf, the other a private open space (with a clubhouse and restaurant). The conditions of establishment did not provide for a notarial tie. The private open space erf will gain access and services (one bulk water connection, one bulk electrical connection etc) from the residential erf. I agree with out current conveyancer that the erven must be tied as the Deeds Office will request such in terms of the Sectional Titles act (Section 4(2)).
However getting the Local Authority to agree to this without changing the COE and placing a correction notice seems impossible. Do the conditions really have to be amended? Can't we just submit a notarial tie application that states that in terms the Sectional Titles Act (as well as from an access point of view) this must be done and that the agreement must be drafted between the Local Authority and the owner without amending the COE? I look forward to your response. Thank you
The COE need not be amended. The only requirement is the Notarial tie agreement between the owner (developer) and Council.
Dear Allen, Client owns one property zoned for educational purposes, they want to purchase the adjacent property for the same purpose, but it is currently zoned as Residential. Must the zoning of the properties be the same to tie?
Hi Allen, I have two adjoining small holdings which are Notarially Tied. The council want to register a servitude along the adjoining boundary for a sewer servitude. Am I entitled to be compensated for the negative effect that this will have on our property?
Hi Allen. I note from your comments above that an erf can be consolidated with farmland. Therefore, can a piece of land (erf) be consolidated with an Erf on which a Sectional Title Scheme has already been opened? Section 40 of the Deeds Registries Act records that the properties must be in the same property register, therefore I was under the impression that one cannot consolidation conventional land with sectional title land. Please advise.
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