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Immovable property and divorce - 2

25 November 2004

By way of introduction refer to Immovable property and divorce - 1 in last week's GhostDigest. We now turn to problems two and three which are a slight restatement of the first problem posed.

PROBLEM 2
A and B where married in community of property. Immovable property, property 1 was registered in favour of the joint estate, hypothecated under a mortgage bond. From the court order of divorce it appears that the said property accrues to the separate estates of both A and B in half undivided shares, to be held in free co-ownership. Unlike in Problem 1 the title deed of the property and the mortgage bond have never been updated with regard to the subdivision of the joint estate subsequent to the divorce order. Five years since the divorce has elapsed, the estate of A is sequestrated. The trustee in the insolvent estate of A has sold A's share in the property to B. The bond has not yet been cancelled and is still encumbering the property.

Question
Which registration procedure should be followed to give effect to the transaction?

Solution
Similar to the solution to problem one last week, the division of the joint estate should first be registered. The provisions of section 45bis(1A)(a) of the Deeds Registries Act 47 of 1937 (hereinafter referred to as "the Act") should be applied. The same procedure as stated in solution one should be applied in respect of the mortgage bond.

The trustee in the insolvent estate of A should transfer by means of a deed of transfer A's share to B. If the bond cannot be cancelled, the question arises whether the bondholder and B may consent in writing to the release of A's share of the property and the person of A? Alternatively, may a substitutution of debtor in terms of section 57 of the Act be registered? Practically B intends to accept full liability as sole mortgagor under the bond.

Due to the provisions of section 56(1) of the Act, the provisions of section 55 of the Act become obsolete when property hypothecated under a mortgage bond is transferred as a result of a sale in insolvency. Thus, whether a bondholder will consent to a release of the insolvent and her/his property as provided for in section 55 of the Act remains to be doubted. Registrars' Conferenced Resolution 13 of 1989 provides that no such release is required. If the bondholder is satisfied to retain only B's half share in the property as security under the bond, it will not be necessary to lodge the bond with the deed of transfer from the trustee in the insolvent estate of A to B.

If, however, the bondholder requires B to hypothecate the whole of the property, subsequent to B's acquisition of A's half share, a substitution of debtor as provided for in section 57 of the Act clearly prohibits a substitution of the debtor in cases where the transferor is the trustee in an insolvent estate. It appears that the only registerable solution in such an instance is for B to cancel the registered mortgage bond and to register another bond over the whole of the property.

PROBLEM 3
In this scenario the spouses were married out of community of property. A and B, the spouses, acquired immovable property in half undivided shares. The marriage was disolved by court order of divorce. According to the settlement agreement, which was made part of the court order of divorce, the whole of the property devolved upon A. The property is not hypothecated. A requires transfer of B's half share in the property, allocated to A in terms of the divorce court order (as set out in the settlement agreement). However, B has disappeared. Despite diligent search for B, s/he remains untraceable.

Question
With B being untraceable, who may pass transfer of B's half share in the property? 1

Solution
Although A already acquired ownership of B's share in the property by virtue of the court order. A must still obtain title for such share in the property. B, as registered owner of a half share in the property, is the only person who may pass transfer. With B being untraceable the only alternative for A is to obtain a court order authorizing registration of the transfer of B's half share in favour of A. Section 33 of the Act prescribes the procedure to be followed if a person who acquired the right to ownership in immovable property is unable to procure registration thereof in her/his name in the usual manner.

Thus, A has to apply to court by petition as prescribed by section 33 of the Act, in order to obtain authorisation for the transfer of B's share in the property in favour of A. Although B's share in the property devolved upon A by virtue of a court order, being the court order of divorce, it is imperative to note that the court order of divorce is not a court order as prescribed by section 33 of the Act. Therefore, the court order of divorce may not be deemed as sufficient authorisation to invoke the provisions of section 33 of the Act. A further court order will be required before registration of the transfer in favour of A will be afforded. Once the court order as contemplated by section 33 of the Act is obtained, the procedure prescribed in section 33 may be followed. 2. Alternatively a conventional deed of transfer 3 with the sheriff as transferor and the causa of the deed reflecting the particulars of the authorizing court order, may be used to pass transfer.

My final thought from a practical perspective: unlike marriage every computer is issued with an instruction manual; there are registerable conveyancing procedures for all types of transactions pertaining to immovable property - one should merely read, interpret and understand the "instruction manuals".

Footnotes:
1The procedure provided for in section 45 of the Act is not to the avail of A here, due thereto that the spouses were married out of community of property - section 45 only applies to marriages in community of property.
2 The deed of transfer must be in prescribed Form H.
3 In prescribed Form E.


Republished with permission

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