Notarial tie-agreements
31 March 2011Introduction
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.
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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.