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Notarial tie agreements

31 March 2011

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
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.

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.

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).

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 his waiver of the condition, in which case the provisions of section 68(1) can be invoked to cancel the condition.

Allen West
Deeds Training
Pretoria

Reader Comments: 34
Petrus 27/07/2011:

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?

Allen West 01/08/2011:

There is nothing prohibiting it.

Molatelo 03/01/2012:

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.

Zama 30/01/2012:

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?

Steve Cilliers 24/02/2012:

Can two properties with the same owner, but different zonings, for instance, residential and business, be notarially tied?

Amanda 01/03/2012:

I guess so... as the property belongs to the same owner,  the business practised there might be different -but the owner is the same.

Mandi Hamman 02/03/2012:

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?

Samantha 02/03/2012:

Is there a deeds registry practice of registering a notarial tie agreement over sections in a sectional title scheme?

AElwyn Nortje 17/04/2012:

Is it possible for erven in an approved township to be tied with a farm portion? It is in different property registers.

Sharon 04/05/2012:

Hi. How does one cancel a notarial tie?

Mark Robertson 18/05/2012:

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!!!!!!!

Christina 25/05/2012:

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.

leila 20/08/2012:

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.

Allen West 21/08/2012:

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.

TANIA SCHAEFER 10/06/2013:

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?

Allen West 13/06/2013:

The agreement will be entered into between the developer and the local authority, the latter being the enforcer of the agreement.

Maricha 20/06/2013:

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?

Allen West 20/06/2013:

No consent is necessary as the agreement will be a bilateral one between the owner and the local authority.

Annette Fyfer 04/10/2013:

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?

kerry 19/02/2014:

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?

John Christie 20/02/2014:

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.

Allen West 20/02/2014:

No. There is no reason for them to be a party to the agreement

RIDWAAN 21/02/2014:

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?

tracey 13/06/2014:

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

Allen West 19/06/2014:

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.

Allen West 19/06/2014:

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.

John 20/06/2014:

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.

Herman 25/06/2014:

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?

Debra Gouws 26/06/2014:

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. 

Allen West 27/06/2014:

Herman-- it remains two properties entirely distinct from a consolidation Debra Yes.

Unknown 27/06/2014:

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?

Mariette 07/07/2014:

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?

Allen West 10/07/2014:

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.

Jeanine 09/09/2014:

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?

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