FILTERS:

When to reject

16 June 2011

This article is a concentrated endeavour by the author to provide basic guidelines for both seasoned and rookie examiners who perform second level examination on when to reject or query a deed.

Let us firstly demystify some second level jargon before we delve into the skein of concepts surrounding second examination:

Note: means a simple remark for the conveyancer's attention to a simple error that can be fixed by him in the deeds office without having to withdrew the deed to his offices.

Query: means a material remark  by an examiner that invariably leads to a rejection of a deed if that fault is not remedied.

Rejection: means the process of rasing a query and marking a queried deed with an "R" (Queried) endorsement.  These deeds are tossed back into the conveyancer's locker in the preparation room.

Pigeon-hole: a small locker for deeds allocated per conveyancer over a query.

Counter-query:  a reply or a counter-note by a conveyancer over a query.

Passing:  The process of approving deeds and letting them go through the system by marking them with a "passed" stamp so they may be processed into execution.

Material faults in deeds may emanate from various areas of Deeds Registration Law.  However, as already stated above, an endeavour is only made to scale the topic down to queries.  The following are notorious areas from which different queries emanate, namely:

  • Unregistered conveyancer/preparer
  • Violation of an interdict
  • Preparation clause unsigned
  • Lack of capacity with regard to the person transacting
  • Statutory infringements e.g. failure to dispose of an active bond on transfer and failure of surviving spouse to join executor in a deceased joint estate transaction.
  • Eligibility of a particular property (tenure concerns) to be dealt with in a particulary manner of land use e.g. sectional or township settlement
  • Inserviceability of a holding title
  • Wrong format/form of a deed (prescribed forms are in the regulations of the Deeds Act)
  • Broken batching/linking
  • Non lodgement of holding title or deed
  • Unpaid service fees e.g. for filing of title
  • Unpaid accounts
  • Double registrations
  • Non lodgement of poof of payment of taxes, diagrams for new sub-divisions, consolidations, partitions, general plans and sectional plans and other indispensible supporting documents e .g. deceased estate documents (see regulations 49 and 51 of the Deeds Registries Act)

So basically one of the above or a combination thereof is invariably a valid ground for the rejection of deeds.

The foregoing is only but a broad list of variables or areas for the potential rejection of deeds.  Examiners are advised to apply the following table in order to determine with pin-point accuracy if a fault is a valid rejection or not.

No. Type of fault Action
 

LACK OF CAPACITY

 
1 Person dealing is not the owner (see definition of owner in seciton 102 of the Deeds Act). Query and reject
2 Person dealing has not been authorised. Query and reject
3 Person dealing has not obtained the necessary consent. Query and reject
4 Beneficiary acting prematurely or prior to lapse of condition.  The latter is discernible in cases where e.g. an under-aged beneficiary transfers property despite its vesting in a testamentary trust in conflict with the section 40 (1)(b) Act 66/65 endorsement. Query and reject
5 Sequestered person dealing. Query and reject
6 Liquidated person dealing. Query and reject 
7

Person with limited capacity or without capacity dealing.

Query and reject
 

NON-ELIGIBLITY OF THE PROPERTY OR INCOMPATABILITY OF THE PROPERTY

 
1 Type of land not suited for transaction, e.g. leasing of un-alienated state land without preceding it with a certificate of registered state title or sectional title scheme or township on agricultural land without consent. Query and reject
2 Property is attached Query and reject
3 Property description is wrong. Query and reject
4 New land parcel lacks cadastral data (general plan or diagram). Query and reject
5 Incompatible tenure, e.g. bond on P.T.O. land.

Query and reject

 

LAW INFRINGEMENTS

 
1 Incorrect applicatio of legal concepts e.g. fideicommissum mistaken for a usufruct and a deed is drawn according to the misconception, or passing a notarial bond over immovable property. Query and reject
2 Non-payment of transfer duty and rates. Query and reject
3 Non-compliance with specific provisions of the Act. Query and reject
4

Document/instrument not duly authenticated.

Query and reject 
     
 

INTERDICTS

 
1 Alientation of property contrary to an interdict. Query and reject
2 Alienation by sequestrated owner. Query and reject
3 Alientation of property which is subject to a land claim. Query and reject
4 Alienation of property by an owner who is under liquidation. Query and reject
5 Alienation of expropriated property by the owner. Query and reject
 

STATUS OF DEED

 
1 Torn deed Query and reject
2 Pages missing from deed/title Query and reject
3 Spillages of deed or title Query and reject
4 Wrong format/form Query and reject
5 Deed endorsed outside deeds office Query and reject
6 Deed pre-executed (except sectional bonds and notarial deeds) Query and reject
7 Non lodgement of the examiners note sheet Query and reject
8 Holding title not lodged Query and reject
9 Preparation clause missing Query and reject
10 Preparation clause unsigned

Query and reject

11 Preparation clause not counter signed (especially when prepared by an attorney). Query and reject
12 Sectional Title bond un-executed Query and reject
13 Non-lodgement of annexure to a Sectional Bond Query and reject
14

Examiner's note requiring a mere certificate by the examiner.

Do not reject
 

FEES

 
1 Account in arrears Query and reject
2 Fee for permanent filing of title unpaid Query and reject

The above guidelines should be used in conjunction with CRC 1 of 1961 which deals with this matter as well as the respective office's in-house circulars.

Examiners should feel free to elaborate on the above list - Editor.

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