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Section 4(1)(b) applied - II

24 August 2006

This is a response to Application of section 4(1)(b) which was published on Thursday 17 last week in the General category of the GhostDigest.

Since applications for the rectification of errors in terms of the section 4(1)(b) of the Deeds Registries Act 47 of 1937 ("the Act") arise from errors and (such applications) are necessary, and since, almost invariably, an application to rectify Conveyancer A's error is attended to by Conveyancer B, or another remote conveyancer, without any liaison with Conveyancer A, I have, with all due respect, misgivings about Allen West's submission "that the provisions of section 4(1)(b) of the Deeds Registries Act, 47 of 1937 are being misused and abused", certainly to the extent that the words "misused and abused" may imply a wrongful intention on the part of anybody. Moreover, in the rare event that Conveyancer A would have the opportunity to attend to a rectification of his/her own previous error, he/she would, under normal circumstances, bear all the costs of such rectification, which action signifies the absence of an intention to misuse and abuse.

It would seem to me that the problem highlighted by Allen West, regarding unnecessary costs incurred by a registered owner of immovable property, is by and large attributable to ignorance and/or negligence on the part of a conveyancer who commits an error. This would seem to be so irrespective of the number of errors committed by the conveyancer.

As shown above, there can be no problem with Conveyancer A's attention to the rectification of his/her errors free of charge. However, I submit that Conveyancer B cannot be expected to attend to the rectification of Conveyancer A's errors free of charge.

Further, the inconvenience of, and expense to, Conveyancer B, if he/she were to alert Conveyancer A to the latter's errors and the consequences thereof, discourages such course of action.

Section 15A(1) read with Regulation 44A of the Act also serves, to a fair extent, as a guarantee that a party to a transaction, who/which becomes adversely financially affected by a conveyancer's error, would be compensated by that conveyancer for losses incurred by such party, which losses result from such error. Practical considerations, such as the costs of a guarantee and the period of validity thereof, in relation to when, more or less, the error would be discovered, make the provision of a financial guarantee a very remote option in the circumstances. In any event, I do not think that it would be necessary to give a financial guarantee because, in my opinion, the affected conveyancer would not only be willing but would also be in a position to pay for the losses. However, should it be strongly felt that some financial guarantee is necessary, it could be worthwhile to make special provision for it in the fidelity insurance cover in respect of every conveyancer.

In view of the unnecessary hardships caused to innocent consumers by the problem raised by Allen West, I would recommend preventive action as part of a solution to the problem: that is, notwithstanding the relief that section 15A(1) read with Regulation 44A of the Act was intended to give to Deeds Registries, reasonable and practicable steps ought to be taken by Deeds Registries to prevent, or considerably reduce, the registration of documents containing errors. In the result, almost all errors committed by a conveyancer should result in a rejection of his/her documents there and then, and, thereupon, give him/her the opportunity to attend to the rectification of his/her own errors free of charge. To this end, the enforcement of section 4 (1) (a) of the Act, as suggested by Allen West, would, amongst other things, be a step in the right direction.

Thabo Nqhome
21 August 2006

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