Sectional Titles

Section 13

Subsection (2) of Section 13 of the Sectional Titles Act, 95 of 1986 ('the Act') provides as follows:
'(2) A sectional plan, together with the schedule of servitudes and conditions referred to in Section 11(3)(b), shall upon the registration of such plan be deemed to be part of the sectional title deed. …'

In terms of Section 3(1)(b) of the Deeds Registries Act, the Registrar of Deeds is enjoined to examine all deeds submitted to him for execution or registration, and, after examination, to rejectregistration of which any other valid objection exists.

It stands to reason, in the process of examining a deed, that the existing title must be examined for the verification of existing conditions of title. It is unquestionable that Section 13 of the Act finds application in the process.

On examination of a third sectional bond purporting to hypothecate a section in a scheme, I found that the relevant Section 11(3)(b) schedule contained the following condition:
'C The property in paragraph 2A above, shall not be alienated, transferred, leased or otherwise dealt with without prior written consent of NBS Bank Limited No. 87/01384/06, by virtue of a notarial deed still to be registered.'

A notarial deed containing this condition was duly registered and the opening of the relevant scheme duly noted thereon.

I rejected the bond on the basis that the registration of the said bond constituted an alienation that is prohibited by the above mentioned condition and therefore consent by NBS had to be lodged. The conveyancer concerned raised an argument that states that this restriction was only applicable in relation to the developer of the scheme and not to subsequent purchasers of the relevant sections.

I did not concur with the argument of the conveyancer as the wording on the condition does not support the conveyancer's argument. It is noteworthy to mention that the registration of the second bond was previously rejected for the same reason. The consent of NBS was eventually lodged and the bond duly registered.

It is, however, possible that the intention of the parties was to have the condition applying in respect of the developer only, but unfortunately such intention does not appear in the condition. It is humbly submitted that for as long as the said condition is contained in the Section 11(3)(b) schedule of conditions, the deeds office has no option but to insist on compliance because the condition constitutes a valid objection as contemplated in Section 3(1)(b) of the Deeds Registries Act. Readers are implored to share their views in this matter for the purpose of correcting me, should my understanding be way off the mark.

The checking of the schedule of conditions for any restriction on alienation when examining any act of registration is imperative - Editor

Reader Comments:

Lizelle Kilbourn 15/08/2005:

If I understand the issue correctly, the question is if the term "alienate" also includes "mortgage". 'You may not alienate' would then automatically also mean 'you may not mortgage'.

With respect, I disagree with that wide an interpretation of the term alienate. Why else would one in agreements generally have reference to alienate, mortgage, encumber... etc if the term alienate was to be given such a wide field of application?

LX 23/08/2005:

In the initial article the challenged condition was quoted. In the article the word "alienated" was underlined (emphasized) and most probably that triggered Ms Kilbourn's comment. However, cognizance should be taken of the whole of the quoted condition in the specific scenario. It also included the words ".. or otherwise dealt with without prior written consent ...". Surely in the specific instance there cannot be any doubt of the correctness of the viewpoint of the deeds registry? The mere wording of the condition itself is conclusive proof that the deeds registry acted correctly in declining registration without the required consent.

It is, however, cautiously suggested that Ms Kilbourn perhaps did not understand the issue quite correctly. The question was not about the interpretation of the concept "alienate". Without repeating the whole of the initial article here, it is respectfully submitted that the article was about restrictive conditions being registered and noted against the section 11(3)(b)-schedule of conditions; binding all the sectional title property comprised in the scheme, thus also the units, even subsequent to the transfer of such units to individual sectional owners, while the intention perhaps could be to bind only the initial developer.

With regard to Ms Kilbourn's concern pertaining to the interpretation of the concept "alienate" when used as a restriction in a condition, the reader's attention is drawn to Registrars'' Conference Resolution 25 of 2003. The conference was approached with the question whether the prohibition on an alienation condition in a deed also included mortgage. Conference resolved that it did include mortgage and reference was made to "Jones 4th Edition, page 450". The correctness of the conference resolution not only can be questioned it OUGHT to be questioned. Hopefully Ms Kilbourn will consult Nel, HS, Jones Conveyancing in South Africa, 4th edition, but not only page 450 as referred to by RCR25/2003. Ms Kilbourn is hereby requested to peruse the said registrars' resolution; to consult the said publication referred to in the resolution; and then to approach the chief registrar of deeds, either personally or in writing, challenging the correctness of the said resolution.

Until the resolution is withdrawn, either by another resolution or a circular from the chief registrar of deeds, conveyancers and deeds office personnel will have to bear with the frustration of the concept "alienate" incorrectly interpreted as including mortgage. In preparation for the fight to freedom from the oppression of "alienate" Ms Kilbourn is advised to not only consult the said page 450, but also page 240, paragraph (d) of the same publication. On page 240 Ms Kilbourn ought to find sufficient ammunition to blast the misconception cast in writing in the form of the said resolution into unrecognizable pieces of embarrassment that will rain down upon the members of the conference who created the alien(ate) monster.

And, just to ensure the final killing of the daunting alien(ate) monster, Ms Killbourn is advised to emphasize the misinterpretation by the conference of the author's words on the said page 450 the words on which the resolution was based. It is trusted that Ms Kilbourn is the one individual who has all the characteristics to become the conveyancing fraternities idol in being the driving force behind the killing of the alien(ate) monster and born of the new, correct interpretation of the concept (nothing personal intended or implied!).

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