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Regulation 41(1)

10 March 2005

Regulation 41(1) of the Deeds Registries Act 47 of 1937 ("the Act") reads as follows:
"Where it is sought to mortgage land held under special conditions limiting the rights of the owner, the Registrar may require those conditions to be set out in the bond or a suitable reference made thereto."

The regulation not being peremptory has been the topic of numerous debates at the conferences of Registrars held. In 1954 the Chief Registrar of Deeds issued a circular (CRC 3 of 1954) providing as follows.

"A practice seems to have grown up with many conveyancers of making a reference to every township condition after the description of land in mortgage bonds on urban properties. As many as sixteen condition headings are set out in some bonds and they include such subjects as building line, building value, corrugated iron and piggery restrictions, maintenance of roads and non-subdivision conditions. Regulation 41(1) is not intended for such purposes, but should be used only for such onerous conditions as mineral reservations, pre-emptive rights, and usufructs. To cover all conditions, the description of the land in a mortgage bond should be followed by a clause reading as follows when such land is subject to real rights:- Subject to the conditions contained in the aforesaid deed of transfer and more particularly to the following:- (then set out any burdensome conditions as reservation of mineral rights, usufruct, etc, that may be applicable). "

In 1958 (see RCR 52 of 1958) the Conference of Registrars held that a general reference to the conditions of the title deed is tantamount to the insertion in the bond and if any office feels that the condition should be specifically cited, it could do so. However, in 1987 (see RCR 5 of 1987) Conference held that for purposes of maintaining uniformity, mortgage bonds must specifically be made subject to pre-emptive rights, rights of reversion or other conditions restricting ownership. Reference was provided to RCR 17 of 1954, RCR 8 of 1955, RCR 14 of 1955, RCR 52 of 1958 and RCR 35 of 1962.

Irrespective of the above quoted Chief Registrars Circular and Conference Rulings, the practice is still not uniform. It is submitted that the above rulings must strictly be adhered to, or the conference must once again be approached to repeal the decisions.

In terms of Chief Registrars Circular 11 of 2004, it is no longer required to make bonds specifically subject to the reservation of mineral rights. However, where same has been done, it should be treated as pro-non scripto.

The whole aspect surrounding Regulation 41(1) is fairly controversial and readers are encouraged to provide their views in this regard.

Republished with permission

Reader Comments: 1
Lizelle Kilbourn 11/03/2005:

Thanks, Allen, for providing informative and useful comments on issues that are often obscure or confusing. Please keep up the good work- I am a fan.

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