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PropertyLaw2007Notes(PartI)

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Property Law 2007 – Outline
Course content
Part 1 (Notes included here.)
Introduction to the concept of ownership
Traditional ideas of ownership
Neighbour/nuisance law
Introduction to environmental laws
Environmental Impact Assessment
Laws relating to the environment
Acquisition of ownership
Sectional title ownership (incl share block, timeshare)
The transition to ownership: passing of risk
Part 2
Ownership
Introduction to the protection of ownership
Protection of ownership
Protection and loss of ownership
Possession/protection of possession
Protection and loss of possession
Servitudes
Revision and exam preparation
[Note: Details of specific dates and lectures will be handed out at the beginning of this
section of the course.]
Ed Couzens
Rm E518
Shepstone Building, Faculty of Law, University of KwaZulu-Natal, Durban,
Email: [email protected]
Property Law 2007 – Case List/reading list
General readings
There is no prescribed textbook.
Recommended readings:
Badenhorst, Pienaar, Mostert Silberberg & Schoeman’s The Law of Property (4/e
LexisNexis Butterworths, 2003)
Chapters:
6:
Ownership: general principles/neighbour relations
11:
Protection and loss of ownership
12:
Possession
13:
Protection and loss of possession
14:
Servitudes
Olivier, Pienaar, Van der Walt Law of Property: Student’s Handbook (Juta: 1989)
Van der Walt, Pienaar
Introduction to the Law of Property
(4/e Juta: 2002)
Van der Merwe
The Law of Things
(Butterworths: 1987)
Carey-Miller
The Acquisition and Protection of Ownership (Juta: 1986)
Van der Walt
Law of Property: Casebook for Students (Juta: 1992)
Introduction to the concept of ownership
Regal v African Superslate
Gien v Gien
Dadoo Ltd v Krugersdorp Mun Cncl
1963(1) SA 102 (A)
1979 (2) SA 1113 (T)
1920 AD 530
Nuisance/neighbour law
Holland v Scott
Mayor of Bradford v Pickles
Regal v African Superslate (Pty) Ltd
Gien v Gien
Bingham v City Council of Jhb
Malherbe v Ceres Municipality
1882 EDC 307 at 332
[1895] AC 587 (HL)
1963(1)SA102(A)
1979(2)SA1113(T)
1934 WLD 180
1951(4)SA510(A)
Vogel v Crewe
2003(4)SA509(T)
Rademeyer v Western Districts Council
1998(3)SA1011(SE)
Harris v Williams
1998(2)SA263(W)
Garden Cities Incorp Assoc Not For Gain v Northpine Islamic Society
1999(2)SA257(C)
Nelson Mandela Metropolitan Municipality v Greyvenouw cc
2004(2)SA81(SE)
Hichange Investments (Pty) Ltd v Cape Produce Co (Pty) Ltd
2004 (2) SA 393 (E)
Minister of Health & Welfare v Woodcarb (Pty) Ltd
1999 (3) SA 155 (N)
Paola v Jeeva NO and others
[2003] JOL 11633 (SCA)
The Trustees of the Brian Lackey Trust v Annandale
Unrep., case nr 3848/02 (C)
Environmental Law
Natal Fresh Produce Growers’ Association v Agroserve
1990 (4) SA 749 (N)
Minister of Health and Welfare v Woodcarb (Pty) Ltd
1996 (3) SA 155 (N)
Director: Mineral Development, Gauteng v Save the Vaal Environment
1999 (2) SA 709 (SCA)
Fuel Retailers Association of Southern Africa v Director-General Environmental
Management, Mpumalanga
Case CCT 67/06
The South African Journal of Environmental Law & Policy (SAJELP) Vol 6 No 1, 1999 –
six articles on NEMA, by: E Bray, E Couzens, M Kidd, F Soltau, J Milton, R Lawrence
E Couzens & M Dent ‘Finding Nema: The National Environmental Management Act, the
De Hoop Dam, Conflict Resolution and Alternative Dispute Resolution in Environmental
Disputes’ Potchefstroom Electronic Law Journal 2006 Vol: 3 (see
http://www.puk.ac.za/fakulteite/regte/per/issue06v3.html)
J Glazewski Environmental Law in South Africa 2/ed LexisNexis, 2005 – esp. Chapter 5:
NEMA.
P Henderson ‘Some Thoughts on Distinctive Principles of South African Environmental
Law’ SAJELP Vol 8 No 2, 2001
M Kidd ‘General Intro – NEMA – ECA’ in LAWSA 2nd Ed Vol: 9; 245-324
M Kidd ‘Greening the Judiciary’ Potchefstroom Electronic Law Journal 2006 Vol: 3 (see
http://www.puk.ac.za/fakulteite/regte/per/issue06v3.html)
The Constitution of the Republic of South Africa Act 108/1996:
The Constitution is the supreme law of the land, and has a number of sections that are
relevant to the environment.
s24 states that:
Everyone has the right (a)
to an environment that is not harmful to their health
or
(b)
well-being; and
to have the environment protected, for the benefit of
present
and future generations, through reasonable
legislative and other measures that (i)
(ii)
(iii)
prevent pollution and ecological
degradation;
promote conservation; and
secure ecologically sustainable
development and use of natural
resources while promoting justifiable
economic and social development.
s24 has two important consequences:
~ It protects our health and well-being.
~ It places a duty on the state, on business, and on all South Africans to prevent
pollution and other damage to the environment, and to promote conservation and
sustainable development. Every government authority (national, provincial or
local) has a duty to take reasonable steps, in its current functions as well as future
plans, to prevent pollution, promote conservation and ensure sustainable
development.
What do the words ‘health and well-being’ mean?
The meaning of these words is not self-evident, and so it will be up to the courts
(and ultimately the Constitutional Court) to decide on their exact meaning. Until
this happens, this is the most likely interpretation:
Protection of our health includes protection from pollution, whether in the
air, water, food or soil. It includes protection from dangers in the
workplace, and from less obvious dangers to health (such as noise).
Protection of our wellbeing is wider than the protection of health. It
includes protection from nuisances and invasions of privacy and dignity.
We might say that something affects our well-being if it affects our ability
to enjoy our life.
Against whom can you enforce your environmental rights?
Against the state, clearly.
s8 of the Constitution says that the Bill of Rights applies to non-state bodies and
individuals, if applicable. The Constitutional Court has still to decide on the full
meaning of ‘if applicable’. In theory, s 8 offers us protection against individuals
and companies who cause pollution or other damage to the environment. In other
words, it is not only the state that must respect our environmental rights.
The National Environmental Management Act 107/1998 (“NEMA”):
NEMA can be regarded as the most important piece of general environmental
legislation. It provides a framework for environmental law reform and covers
three of the areas mentioned above, namely:
~ Land, planning and development.
~ Natural and cultural resources, use and conservation.
~ Pollution control and waste management.
The law is based on the concept of ‘sustainable development’. The object of NEMA is to
provide for cooperative environmental governance through a series of principles relating
to:
~ The procedures for state decision-making on the environment.
~ The institutions of state which make those decisions.
The NEMA principles serve as:
~ A general framework for environmental planning.
~ Guidelines according to which the state must exercise its environmental
functions.
~ A guide to the interpretation of NEMA itself, and of any other law relating to
the environment.
What are the NEMA principles?
Some of the most important are:
~ Environmental management must put people and their needs first.
~ Development must be socially, environmentally and economically sustainable.
~ There should be equal access to environmental resources, benefits and services
to meet
basic human needs.
~ Government should promote public participation when making decisions about
the
environment.
~ Communities must be given environmental education.
~ Workers have the right to refuse to do work that is harmful to their health or to
the
environment.
~ Decisions must be taken in an open and transparent manner and there must be
access to
information.
~ The role of youth and women in environmental management must be
recognised.
~ The person or company who pollutes the environment must pay to clean it up.
~ The environment must be held in trust for the benefit of all South Africans.
~ The utmost caution should be sued when permission for new developments is
granted.
These principles apply to all government officials. NEMA covers the actions of national,
provincial and local government as well as state corporations, like ESKOM.
What is covered by NEMA?
NEMA can only be used for problems that are about to happen, or that occurred after 29
January 1999. It cannot be applied to environmental problems that arose before this date
unless the problem still continues.
When can you use NEMA to make a complaint?
NEMA says you can take legal action to enforce an environmental law or a principle of
NEMA:
~ To protect your own interest.
~ To protect someone else’s interest, who cannot him/herself do so.
~ On behalf of a group of people whose interests are affected.
~ If the legal action is in the public’s interest.
~ If the legal action is in the interest of protecting the environment.
What does NEMA allow you to complain about?
A person can make a complaint or take legal action under NEMA if:
~ Someone, including the government, has broken an environmental law,
including a
principle contained in NEMA.
~ The government has not obeyed a principle of NEMA.
~ The government has given permission for an activity or development that
affects the
environment, without properly checking how it could affect the environment
and
people.
~ Someone, including the government, has caused pollution or damage to the
environment.
~ A person has been punished for refusing to do work that might harm the
environment,
or for reporting on someone who is harming the environment.
~ A major accident (emergency incident) that threatens the public has happened
and there
has not been a proper report about it, nor has there been a clean-up operation.
~ The state has not prosecuted a person for breaking an environmental law and
you
believe that person to be guilty.
The National Environmental Management Act 107/1998
Summary of the principles contained in Chapter 1
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
NEMA
S 1 Definitions
‘environment’
means the surroundings within which humans exist and that are made up of –
(i)
the land, water and atmosphere of the earth;
(ii)
micro-organisms, plant and animal life;
(iii)
any part or combination of (i) and (ii) and the
relationships among and between them; and
(iv)
the physical, chemical, aesthetic and cultural
properties and conditions of the foregoing that
influence human health and well-being.
‘ecosystem’
means a dynamic system of plant, animal and micro-organism communities and
their non-living environment interacting as a functional unit.
NEMA
Ch 1
S 2 Principles
(2)
(a)
(b)
(c)
(d)
(e)
These principles apply in RSA to actions of all organs of state that may
significantly affect the environment and –
apply alongside other appropriate and relevant considerations, incl the
State’s BoR responsibilities;
serve as a general framework for formulation of environmental
management and implementation plans;
serve as guidelines for any organ of state exercising any function (either
ito NEMA or any other statutory provision concerning environmental
protection);
serve as principles to guide a conciliator appointed ito NEMA;
guide the interpretation, administration, implementation of NEMA; and
any other law concerned with protection or management of the
environment.
(3)
Environmental management must place people and their needs at the forefront
of its concern, and serve their physical, psychological, developmental, cultural
and social interests equitably.
(4)
Development must be socially, environmentally and economically sustainable.
(5)
(a) Sustainable development requires
consideration of all relevant factors, incl:
(i)
Disturbance of ecosystems and loss of biodiversity be avoided (or
minimised and remedied where impossible to avoid);
pollution and environmental degradation be avoided (or minimised and
remedied where impossible to avoid);
disturbance of cultural landscapes and sites be avoided (or minimized and
remedied where impossible to avoid);
waste be avoided or (where impossible to avoid) minimized and reused/recycled where possible, and disposed of in a responsible manner;
use and exploitation of non-renewable natural resources be responsible
and equitable, and take consequences of depletion into account;
development, use and exploitation of renewable resources (and their
ecosystems) not exceed the level beyond which their integrity is
jeopardized;
a risk-averse and cautious approach be applied, which takes into account
the limits of current knowledge about consequences;
negative impacts on environment and on people be anticipated and
prevented (or minimised and remedied where unavoidable).
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(b)
Environmental management must be integrated (acknowledging that
all environmental elements are linked and interrelated) and must take
into account effects of decisions on all aspects of the environment and
on all people (by pursuing the selection of the best practicable
environmental option).
(c)
Environmental justice must be pursued – adverse impacts shall not be
distributed so as to discriminate against any person (especially
vulnerable or disadvantaged persons).
(d)
Equitable access to environmental resources, benefits and services (to
meet basic human needs and ensure human well-being) must be
pursued. Special measures may be taken to ensure access for persons
disadvantaged by unfair discrimination.
(e)
Responsibility for environmental health and safety consequences
exists throughout the life cycle (of a policy, programme, project,
product, process, service, or activity).
(f)
There must be promotion of participation by all interested and affected
parties in environmental governance. All people must have the
opportunity to develop understanding, skills and capacity (necessary to
achieve equitable and effective participation). Participation by
vulnerable and disadvantaged persons must be ensured.
(g)
Decisions must take into account the interests, needs and values of all
(interested and affected) parties. This includes recognising all forms of
knowledge, including traditional and ordinary knowledge.
(h)
There must be promotion of community wellbeing and empowerment
(through environmental education, the raising of environmental
awareness, the sharing of knowledge and experience, and other
appropriate means).
(i)
Social, economic and environmental impacts of activities (including
disadvantages and benefits) must be considered, assessed and
evaluated. Decisions must be appropriate in the light of such
consideration and assessment.
(j)
The right must be respected (and protected) of workers to refuse to
perform work (that is harmful to human health or to the environment)
– and their right to be informed of dangers (must also be
respected/protected).
(k)
Decisions must be taken in an open and transparent manner – and
access to information must be provided (in accordance with the law).
(l)
There must be intergovernmental coordination and harmonisation (of
policies, legislation, actions iro the environment).
(m)
Actual or potential conflicts of interest between organs of state should
be resolved through conflict resolution procedures.
(n)
Global and international responsibilities iro the environment must be
discharged in the national interest.
(o)
The environment is held in public trust for the people.
The beneficial use of environmental resources must serve the public
interest.
The environment must be protected as the people’s common heritage.
(p)
Those responsible for harming the environment must pay for the costs
of:
remedying pollution,
remedying environmental degradation,
remedying consequent adverse health effects,
and of:
preventing/controlling/minimising further pollution, or environmental
damage, or adverse health effects.
(q)
The vital role of women and youth in environmental management and
development must be recognised (and their full participation therein
must be promoted).
(r)
Sensitive, vulnerable, highly dynamic, or stressed ecosystems (such as
coastal shores, estuaries, wetlands, and similar systems) require
specific attention in management and planning procedures (especially
where they are subject to significant human resource usage and
development pressure).
NEMA
S28
Duty of care and remediation of environmental damage (Summary)
(1) Every person who causes, has caused, may cause, significant pollution or
environmental degradation, must take reasonable measures to prevent such pollution
occurring/continuing/recurring; or, where such damage is authorised or cannot reasonably
be avoided/stopped, to minimise and rectify such pollution/damage.
(2) Persons who have a duty, in (1), to take reasonable measures, include an owner of
land/premises, a person in control of land/premises, or a person with the right to use the
land/premises.
(4) The DG or a provincial Head of Dept may direct any person who fails to take proper
measures under (1) to take specific reasonable measures.
(6) If a person required to undertake remedial measures on the land of another is unable
to gain access, the Minister may expropriate the land and vest the expropriated rights in
the person undertaking the work – and may recover the costs of the expropriation from
the person for whose benefit the expropriation was effected.
(7) If a person fails to comply, or to comply adequately, with a directive under (4), the
DG pr pHoD may take reasonable measures to remedy the situation.
(8) All costs incurred under (7) may be recovered from any person responsible for the
pollution/degradation; the owner of the land at the time the pollution/degradation (or the
potential therefore) occurred, or that owner’s successor in title; the person in control of
the land or any person who had a right to use the land at the time; or any person who
negligently failed to prevent the situation.
(9) Recovery may be proportional from any person who benefited from the measures
taken under (7).
(11) If more than one person is liable under s8, liability must be apportioned according to
the degree to which each was responsible for the harm resulting from their respective
failures to take measures required under (1) and (4).
_____________________
S32 Legal standing to enforce environmental laws (Summary)
(1)
Any person/group of persons may seek appropriate relief iro any
breach/threatened breach of any provision of NEMA (incl a principle in Ch 1) or any
other statute (concerned with the protection of the environment or use of natural
resources) (a)
(b)
(c)
(d)
(e)
in that person/group of persons’ own interest;
in the interest of, or on behalf of, a person who is (for practical reasons)
unable to act for him/herself;
in the interest of, or on behalf of, a group/class of persons whose interests
are affected;
in the public interest; and
in the interest of protecting the environment.
(2)
A court may decide not to award costs against a person/group of persons who fails
to secure the relief sought (iro any breach/threatened breach of any provision/principle of
NEMA, or any other statute concerned with protection of the environment or use of
natural resources) … if the court is of the opinion that the person/group of persons acted
reasonably out of a concern for the public interest or in the interest of protecting the
environment and had made due efforts to use other means reasonably available for
obtaining the relief sought.
(3)
Where a person/group of persons secures the relief sought (iro any
breach/threatened breach of any provision/principle of NEMA, or any other statute
concerned with protection of the environment) the court may on application (a)
award costs (on an appropriate scale) to any person/s (entitled to practice
as an advocate/attorney in RSA) who provided free legal assistance/representation to
such person/group in the preparation for/conduct of the proceedings;
(b)
order that the party against whom the relief is granted pay to the
person/group concerned any reasonable costs incurred by such person/group in the
investigation of the matter and its preparation for the proceedings.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Environment Conservation Act:
The Environment Conservation Act is the other law that relates specifically to the
environment. Although most of this Act has been replaced by NEMA, there are still some
important sections that remain in operation. These sections relate to:
~ Protected natural environments.
~ Littering.
~ Special nature reserves.
~ Waste management.
~ Limited development areas.
~ Regulations on noise, vibration and shock.
~ Environmental impact assessment (EIA).
Perhaps the most important sections are the ones that deal with EIA. The government has
made certain Regulations under the EIA sections so that anyone who wants to undertake
a development (eg: erect a hotel, or build a factory) must first put together a report about
how the development will affect the environment. This report is then used by government
to decide whether permission for the development will be granted or not, and whether
there will be any limits placed on the development.
Having dealt with the framework Acts, it is important to look at the specific Acts which
are coordinated under the ‘umbrella’ of the Constitution, NEMA and the ECA. The laws
listed here are only the most important national laws that deal specifically with
environmental issues. We do not cover laws passed by provincial governments. Some
parts of the laws will apply to more than on of the listed categories.
***NOTE:
property.
Your concentration should be on those statutes which affect rights of
NOTE: You may focus on the statutes which have been highlighted in red/bold.
Land, planning and development:
Land reform and agricultural resources:
Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act
36/1947
Agricultural Pests Act 36/1983
Conservation of Agricultural Resources Act 43/1983
Foodstuffs, Cosmetics and Disinfectants Act 54/1972
Upgrading of Land Tenure Rights Act 112/1991
Restitution of Land Rights Act 22/1994
Communal Property Associations Act 28/1996
Extension of Security of Tenure Act 62/1997
Prevention of Illegal Eviction and Unlawful Occupation of Land Act
19/1998
Communal Land Rights Act 11/2004
(Note: when considering land reform legislation, it is the environmental and property
aspects that are relevant – not the political and contractual considerations.)
Planning laws:
Subdivision of Agricultural Land Act 70/1970 (repealed, but not replaced)
National Building Regulations and Building Standards Act 103/1977
Local Government Transition Act 209/1993
Development Facilitation Act 67/1995
Local Government: Municipal Structures Act 117/1998
Environmental assessment:
Environment Conservation Act 73/1989 + Regulations R1182 to
R1184, in Government Gazette No. 18261 of 5 September 1997
Steps of an environmental impact assessment:
~ Application for authorisation
~ Plan of study for scoping
~ Scoping study
~ Scoping report
~ Review of scoping report by authorities and the
public
~ Possible authorisation, if no problems foreseen
~ If problems foreseen, then:
~ Plan of study for EIA
~ Specialist studies and assessment
~ EIA report
~ Review by officials and public
~ Authorisation or refusal
~ Appeal, if refusal
(New) Regulations promulgated under NEMA, effective from 1 July 2006
Guidelines: Notice 657 of 2006
Regulations No. R 385 21 April 2006 (See:
http://www.capegateway.gov.za/eng/yourgovernment/gsc/406/serv
ices/11537/10199)
Also: Listing Notice 1 R 386; and Listing Notice 2 R 387
[Note: the above reference is to the position in the Cape – the position elsewhere in the
country will be similar, with a few minor differences in procedure.)
National Environmental Management Act 107/1998
Mineral and Petroleum Resources Development Act 28/2002
National Environmental Management: Protected Areas Act 57/2003
Biodiversity and genetic modification:
Plant Breeders Rights Act 15/1976
Plant Improvement Act 53/1976
Genetically Modified Organisms Act 15/1997
Animal Improvement Act 62/1998
National Environmental Management: Biodiversity Act 10/2004
The coast:
Seashore Act 21/1935
Maritime Zones Act 15/1994
(Note: there is an Integrated Coastal Management Bill of 2006.)
Protected areas and community-based conservation:
National Parks Act 57/1976 (Repealed)
Environmental Conservation Act 73/1989 (ss 16 and 18)
National Forests Act 84/1998
World Heritage Convention Act 49/1999
National Environmental Management: Protected Areas Act 57/2003
Natural and cultural resource use; conservation:
Animals Protection Act 71/1962
Game Theft Act 105/1991
National Forests Act 84/1998
National Veld and Forest Fire Act 101/1998
National Environmental Management: Biodiversity Act 10/2004
Living marine resources:
Sea Birds and Seals Protection Act 46/1973
Marine Living Resources Act 18/1998
Water resources:
Mountain Catchment Areas Act 63/1970
Water Services Act 108/1997
National Water Act 36/1998
Mining and energy:
Petroleum Products Act 120/1977
Electricity Act 41/1987
Minerals Act 50/1991 (Repealed)
Mine Health and Safety Act 29/1996
Nuclear Energy Act 46/1999
National Nuclear Regulator Act 47/1999
Mineral and Petroleum Resources Development Act 28/2002
Heritage resources:
National Heritage Council Act 11/1999
National Heritage Resources Act 25/1999
World Heritage Convention Act 49/1999
Pollution control and waste management:
Air quality:
Road Traffic Act 29/1989
National Environmental Management: Air Quality Act 39/2004
Noise control:
Aviation Act 74/1962
Road Traffic Act 29/1989
Noise Control Regulations GN R154 in Government Gazette No. 13717 of
10 January 1992 (made in terms of s25 of the Environment Conservation
Act 73/1989)
Fresh water quality:
Health Act 63/1977
Environmental Conservation Act 73/1989
Water Services Act 108/1997
National Water Act 36/1998
National Environmental Management Act 107/1998
Marine water quality:
Merchant Shipping Act 57/1951
Dumping at Sea Control Act 73/1980
Marine Pollution (Control and Civil Liability) Act 6/1981
Marine Pollution (Prevention of Pollution from Ships) Act 2/1986
Marine Pollution (Intervention) Act 64/1987
Maritime Zones Act 15/1994
Wreck and Salvage Act 94/1996
Regulations 86 and 87, R 111 in Government Gazette No. 19205 of 2
September 1998 (promulgated in terms of the Marine Living Resources
Act 18/1998)
Workers’ environmental rights:
Occupational Health and Safety Act 85/1993
Mine Health and Safety Act 29/1996
Acquisition of ownership
See notes provided; and references.
Sectional title (incl share block and timeshare)
See notes provided; and references.
Passing of risk and profit in the res vendita
Van Deventer v Erasmus
Poppe, Schunhoof & Guttery v Mosenthal & Co
Taylor & Company v Mackie, Dunn & Co
De Wet v Zeeman
1960 (4) SA 100 (T)
1879 Buch 91
1879 Buch 166
1989 (2) SA 433 (NC)
Property - ‘Protection of ownership’
Marcus v Stamper and Zoutendijk
1910 AD 58
Commissioner of Customs and Excise v Randles, Brothers and Hudson 1941 AD 369 411
Edward L Bateman Ltd v Liquidator, Eric Reed Ltd
1960(4)151(SR)
Rei vindicatio
Chetty v Naidoo
ABSA Bank v Amod
Bekker v Jika
1974(3)13(A)20B
[1999] 2 All SA 423 (W)
[2001] 4 All SA 563 (LCC)
Nelson Mandela Metropolitan Municipality v Various Occupiers of Stands in Mnyanda
Street, Qaqawuli Phase 2, New Brighton
[2001] 4 All SA 485 (LCC)
Ndlovu v Ngcobo; Bekker v Jika
[2002] 4 All SA 384 (SCA)
Shoprite Checkers (Pty) Ltd v Jardim
2004(1)502(O)
Ross v South Peninsula Municipality
2000 (2) SA 589 (C)
Betta Eiendomme v Ekple-Epoh
2000 (4) SA 468 (W)
Ellis v Viljoen
2001 (5) BCLR 487 (C)
Brisley v Drotsky
2002 (4) SA 1 (SCA)
Baartman and Others v Port Elizabeth Municipality
2004(1)560(SCA)
City of Cape Town v Yawa and Others
[2004] 2 ALL SA 281 (C)
[Note: Not all of the above cases will be covered in class – you will be advised in class
which to concentrate on.]
J Smith ‘Impact of recent case law on property law in South Africa’
LexisNexis Butterworths Property Law Digest June 2003 p3
A Costa ‘Landlord and les miserables – Rights of ownership of dwellings’
LexisNexis Butterworths Property Law Digest June 2003 p5
K Hopkins & K Hofmeyr ‘The Constitutional Anomaly created by extending PIE’
LexisNexis Butterworths Property Law Digest June 2003 p11
J Tarica ‘PIE and its application to defaulting tenants and mortgagors’
LexisNexis Butterworths Property Law Digest June 2003 p16
Restrictions on application of rei vindicatio
~ Estoppel
Morum Bros Ltd v Nepgen
United Cape Fisheries (Pty) Ltd v Silverman
Grosvenor Motors (Potchefstroom) Ltd v Douglas
Johaadien v Stanley Porter (Paarl) (Pty) Ltd
Kajee v HM Gough (Edms) Bpk
Electrolux (Pty) Ltd v Khota
Johaadien v Stanley Porter (Paarl) (Pty) Ltd
1916 CPD 393
1951 (2) SA 612 (T)
1956 (3) SA 420 (A)
1970 (1) SA 394 (A)
1971 (3) SA 99 (N)
1961 (4) SA 244 (W)
1970 (1) SA 394 (A)
~ Other restrictions
Woodhead Plant & Co v Gunn
Jubb v Sheriff, Magistrate’s Court, Inanda District
Kotze v Prins
Cohn v Rand Rietfontein Estates Limited
~ Actio ad exhibendum
(1894) 11 SC 4
1999 (4) SA 596 (D)
(1903) 20 SC
1939 TPD 319
Unimark Distributors (Pty) Ltd v Erf 94 Silvertondale (Pty) Ltd
RMS Transport v Psicon Holdings (Pty) Ltd
Alderson & Flitton (Tzaneen(Pty)Ltd v EG Duffey Spares(Pty)Ltd
Gore v Saficon Industrial (Pty) Ltd
Frankel Pollak Vinderine Inc v Stanton
1999 (2) SA 986 (T)
1996 (2) SA 176 (T)
1975 (3)S A 41 (T)
1994 (4) SA 536 (W)
2000 (1) SA 425(W)
~ Condictio furtiva
Minister van Verdediging v Van Wyk
First National Bank of SA Ltd v East Coast Design CC
Clifford v Farinha
1976 (1) SA 397 (T)
2000 (4) SA137 (D)
1988(1)SA315(W)
~ Actio legis Aquiliae
Hefer v Van Greuning
Clifford v Farinha
Philip Robinson Motors (Pty) Ltd v NM Dada (Pty) Ltd
1979(4)SA952(A)
1988 (1) SA 315 (W)
1975 (2) SA 420 (A)
~ Actio negatoria
Moller v SAR&H
1969 (3) SA 374 (N)
Loss of ownership
Abandonment
Salvage Association of London v SA Salvage Syndicate Ltd
Underwater Construction & Salvage Co (Pty) Ltd v Bell
Achterberg v Glenister
(1906) 23 SC 169
1968 (4) SA 190 (C)
1903 TS 330
Possession
Underwater Construction and Salvage Co (Pty) Ltd v Bell
Reck v Mills
Cape Tex Engineering Works (Pty) Ltd v SAB Lines
Cameron v S
Nienaber v Stuckey
Scholtz v Faifer
Rosenbuch v Rosenbuch and Another
Manga v Manga
Ex parte Van der Horst: In re Estate Herold
Marais v Engler Earthworks (Pty) Ltd
Ross v Ross
Nino Bonino v De Lange
Meyer v Glendinning
Magadi v West Rand Administration Board
1968 (4) SA 190 (C)
1990 (1) SA 751 (A)
1968 (2) SA 528 (C)
Case 199/2004 (SCA)
1946 AD 1049
1919 TS 243
1975 (1) SA 181 (W)
1992 (4) SA 502 (ZS)
1978 (1) SA 299 (T)
1998 (2) SA 450 (E)
1994 (1) SA 865 (SE)
1906 TS 120
1939 CPD 84
1981 (2) SA 352 (T)
Du Randt v Du Randt
1995 (1) SA 401 (O)
Wild Animals
Langley v Miller
Richter v Du Plooy
Lamont v Heyns
R v Mafohla
Dunn v Bowyer and another
S v Frost and S v Noah
(CPD)
Mbhele v Natal Parks, Game and Fish Preservation Board
1848 3 Menzies 584
1921 OPD 117
1938 TPD 22
1958 (2)(SA 373 (R)
1926 NPD 516
1974 (3) SA 466
1980 (4) SA 303 (D)
Game Theft Act 105/1991
Protection and loss of possession
Mandament van spolie (spoliation order)
Mopeli v Botha
Elastocrete (Pty) Ltd v Dickens
Rosenbuch v Rosenbuch
Parker v Mobil Oil of Southern Africa (Pty) Ltd
Mbangi v Dobsonville City Council
Kgosana v Otto
Shoprite Checkers Ltd v Pangbourne Properties Ltd
Bon Quelle (Edms) Bpk v Mun. van Otavi
Zulu v Min. of Works, KwaZulu
Plaatjie v Olivier
Tigon v Bestyet Investments (Pty) Ltd
Xsinet (Pty) Ltd v Telkom SA Ltd
Fredericks v Stellenbosch Divisional Council
Rikhotso v Northcliff Ceramics (Pty) Ltd
1931 WLD 63
1953 (2) SA 644 (SR)
1975 (1) SA 181 (W)
1979 (2) SA 250 (NC)
1991 (2) SA 330 (W)
1991 (2) SA 113 (W)
1994 (1) SA 616 (W)
1989 (1) SA 508 (A)
1992 (1) SA 181 (N)
1993 (2) SA 156 (O)
2001 (4) SA 634 (N)
2002 (3) SA 629 (C)
1977 (3) SA 113 (C)
1997 (1) SA 526 (W)
Defences to the mandament van spolie
Jivan v National Housing Commission
Mans v Loxton Municipality
De Beer v Firs Investments Ltd
Bosman NO v Tworeck
Smit v Saipem
Servitudes
1977 (3) SA 890 (W)
1948 (1) SA 966 (C)
1980 (3) SA 1087(W)
2000 (3) SA 590 (C)
1974 (4) SA 918 (A)
Bisschop v Stafford
1974 (3) SA 1 (A)
Stephens v De Wet
1920 OPD 78
Engelbrecht v Brits
1920 TS 274
Eichelgruen v 298 South Ridge Road (Pty) Ltd
1976 (2) SA 678 (D)
Kakamas Bestuursraad v Louw
1960 (2) SA 202 (A)
Pieterse v Du Plessis
1972 (2) SA 597 (A)
Van der Berg v Van Tonder
1963 (3) SA 558 (T)
Ridler v Gartner
1920 TPD 249
Grant v Stonestreet
1968 (4) SA 1 (A)
De Beer v Van der Merwe
1923 AD 378
Van Niekerk v Du Toit
1957 (2) SA 226 (N)
Nesbitt v Clayton
1957 (1) SA 382 (SR)
Trautman NO v Poole
1951 (3) SA 200 (C)
Van Rensburg v Coetzee
1979 (4) SA 655 (A)
Wynne v Pope
1960 (3) SA 37 (C)
Bekker v Van Wyk
1956 (3) SA 13 (T
Alexander v Johns
1912 AD 431
Ex parte Evenwell
1937 WLD 1
Ex parte Millsite
1965 (2) SA 582 (T)
Swiss Hotels v Pedersen
1966 (1) SA 197 (C)
Wahloo Sand BK and others v (the) Trustees, Hambly Park Trust and others
2002 (2) SA 776 (SCA)
Property Law 2007 – Tutorials
Property Law
TUTORIAL 1
Shady Glen Residential Village is a very large residential complex, retirement village and
golf estate situated on the North Coast of KwaZulu-Natal. It has its own shopping
complex, post office, banks and so forth - in some ways it is much like a small town. The
people who live there have generally chosen to do so for its air of tranquillity, and its
sense of being ‘close to nature’.
The affairs and legal matters are handled by a Committee made up of residents elected
for that purpose. The duties of this Committee include the approval of new applications
for residence and purchase of property.
A year ago, however, an application was made to purchase a unit in the complex by the
Shady Glen Islamic Society, for use as a mosque (there are a large number of people
adhering to the Islamic faith in the complex). The Committee was very concerned and
asked whether there would not be a loud ‘call to prayer’ every evening? The Islamic
Society assured the Committee that the call to prayer would be made by way of a light on
top of the building. The Committee then approved the application and allowed the
purchase to go ahead.
However, six months after the purchase, the mosque began to run - and the Society
installed on its roof several large loudspeakers through which the call to prayer was
made. This immediately led to complaints from neighbouring residents, and the
Committee asked the Society to remove the loudspeakers. The Society refused on the
basis that they had a constitutional right to practice their religion. The Committee pointed
out that the Society had agreed at the time of contracting not to use a loudspeaker, but the
Society countered that they had never intended to abide by that clause as it infringed their
freedom of religion. The Committee then offered a compromise, that the call to prayer
could be made by way of the human voice - as long as the loudspeakers were removed.
The Society refused, however, on the basis that the call to prayer needed to be made as
loudly as possible.
The Committee has now sought a court interdict against the Society, requiring that the
Society remove the loudspeakers. You are a single judge sitting in the Durban and Coast
Local Division of the High Court. Give judgment in the matter.
_______________________________________________________________________
Property Law
TUTORIAL 2
The Harddoneby Community lives in a village on the banks of the Muddy River in rural
KwaZulu-Natal. According to archaeological evidence, the village has been situated in
the same place for at least 250 years. The Community has always led a simple existence,
surviving on crops which it grows for itself and irrigates with water from the Muddy
River.
In recent years, however, the Community has struggled with several new problems and it
now consults you for advice.
Two years ago, a company (Industrial Effluents (Pty) Ltd) began building a paint
manufacturing factory upriver from the Community (just below Old McDonald’s farm).
The Community did not become aware of this until six months ago, when the first section
of the factory began to operate. The remaining three sections of the factory are due to
begin operating in the course of the next two years. Due to discharges from the factory,
the Muddy River has now taken on a yellowish colour and become unpleasant to taste.
Industrial Effluents (Pty) Ltd has advised the Community that it undertook a proper
environmental impact assessment and that the scientific consultants which it employed
have advised that the water is not unsafe to drink.
________________________________________________________________________
Property Law
TUTORIAL 3
Buyer and Seller enter into an agreement in terms of which Buyer agrees to buy from
Seller two
racehorses, named “Fortunate Prospect” and “Lucky Chance”. However, the parties are
unable to agree on a price for Fortunate Prospect.
They think that Fortunate Prospect is probably worth in the region of R100 000, but
decide
that they will choose a third party to decide on the price for them. They agree therefore
that
Expert, who is a well-known dealer in racehorses, will determine the price for them.
Before this
happens, however, and before Buyer has taken delivery, Fortunate Prospect is struck by
lightning and killed. The parties did not come to any agreement on variance of the risk,
choosing to leave this to be governed by the common law.
Explain whether Buyer is obliged to pay the R100 000 to Seller or not, in respect of
Fortunate Prospect.
They decide that Buyer will buy Lucky Chance for a sum of R100 000. Buyer agrees that
he will return the next day to fetch Lucky Chance, but demands that Seller bear the risk if
anything should happen to the horse. Two days later, Buyer has still not returned to fetch
the horse. The horse is running free in a field in a light rain, when it is struck by a bolt of
lightning and killed.
Explain whether Buyer is required to pay R100 000 to Seller or not, in respect of
Lucky Chance.
________________________________________________________________________
Property Law
TUTORIAL 4
Themba recently went on a fishing and diving expedition. While he was fishing he
hooked a huge fish, which was eventually weighed in at 100 kilograms. He was unable to
land the fish himself and a neighbouring boat had to assist. They were able to land the
fish together. The neighbouring boat then demanded a share of the fish. Themba wants to
know what the legal position is in regard to the acquisition of ownership and whether he
is obliged to give a share to the others.
Themba also found an old shipwreck on the sea bed. The ship still has four brass
propellers attached to it. Themba cleaned these propellers and engraved his name on them
in large letters with a portable power drill. He then carefully noted the position of the
wreck on his map, intending to return for the propellers. When he returned he found that
the propellers had been cut off by another person, who refused to hand them over. Advise
Themba as to the ownership of the propellers.
(Taken from Chris Schembri Law of Property 2002.)
_______________________________________________________________________
Property Law
TUTORIAL 5
Student is in the market for a good second-hand vehicle. After asking around, he is told
by many people that he should visit Sleazy Transport Dealers (“STD”) in Durban, as they
have a good reputation in dealing with second-hand vehicles. Student duly approaches
STD, and soon finds what he is looking for, a 2001 Toyota Whatsit 1600GX, in very
good condition, for R65 000. Student insists on seeing the logbook for the vehicle, and
STD duly shows this to him. The logbook reveals that the vehicle is currently owned by a
finance house, Dodgy Loans (Pty) Ltd (“DL”), who had financed the purchase of the
vehicle for a client of theirs, Trickster. STD advise Student that they are selling the
vehicle on behalf of Trickster, who has made his last payment to DL. Student is a law
student at the University of KwaZulu-Natal and he has just done a course in the law of
property and he is thus aware of the problems that could potentially crop up in such
situations. Student contacts DL telephonically and asks them to confirm that nothing is
owing on the vehicle. They do this in a fax to Student. Student then purchases the vehicle
and pays cash for it.
A few months later, Student is approached by DL. They inform him that they had made
an error and that the vehicle has still not been paid off by Trickster. They want Student to
return the vehicle to them. Student refuses and they threaten him with legal action unless
he complies with their request. Student approaches STD, only to find that they have been
placed in liquidation.
Student approaches you for advice. Advise him as fully as possible.
(Adapted from Chris Schembri Law of Property 2002.)
_______________________________________________________________________
Property Law
TUTORIAL 6
Landowner recently bought a plot of land. Upon taking possession, he discovered that a
neighbour (adjacent to the plot) was regularly crossing the land to draw water from a
river crossing Landowner’s property. This neighbour informed Landowner that he had a
servitude which entitled him to do this. Landowner does not want the neighbour on the
property, as the neighbour’s incessant footprints have worn a track across the land (which
track Landowner considers to be unsightly).
(a)
(b)
Explain to Landowner how you would verify the neighbour’s claim, and what the
various consequences of this could be.
What would the position be if the neighbour’s property was not directly adjacent
to Landowner’s property, but separated from it by another plot of land?
(c)
What would the position be if the neighbour’s property did not itself have any
water source?
_______________________________________________________________________
Landownership
The basic idea from Roman Law is of land as a unit.
Space above, space below - all space.
The ius abutendi. Absolute ownership.
Grotius:
Ownership is ‘full’ where title and actual use are combined; or ‘incomplete’
where separate.
‘Dominum plenum.’
The English ‘quitrent’ system - like dominum plenum but with rent to be paid. A type of
system sui generis.
The concept of a natural right to landownership came from English law and was
influenced by the Industrial Revolution. The demands of industry led to the idea that the
owner owned all above and all below.
The right to use space upward was regulated only by the law of ‘nuisance.’
The right to use space below? The new principles of mining laws deprived much of this
content.
Pandectists:
idea of ownership as a defence against government. Complete autonomy
of owner became a feature of SA law.
SA Bill of Rights:
s25(1):
No one may be deprived of property ...
Water?
‘Owned’ by the government as res publica.
The English then introduced the idea of the landowner ‘owning’ the water - Courts then
interpreted this as the owner of land having a riparian right to perennial running water and absolute ownership of private water
The English concept of ‘nuisance’ ... but the right to personal welfare and comfort an
incident of landownership.
Regal v African Superslate
1963(1) SA 102 (A)
Held: The English law of nuisance has not been substituted for our law and we must
investigate our own common law sources.
Gien v Gien
1979 (2) SA 1113 (T)
Held: An owner’s right extends only so far as there rests an obligation on his neighbour
to endure the exercise of that right.
In the first half of the 20th C, many rights of ownership were diminished by laws.
Mining laws; town planning legislation; apartheid zoning; bans on subdivision.
Mining Rights Act 20 of 1967
Diamonds Act 56 of 1986
Minerals Act 50 of 1991
Minerals & Petroleum Res Dvpt Act 28 of 2002
Dadoo Ltd v Krugersdorp Mun Cncl
1920 AD 530
Subdivision of Agric Lands Act 70 of 1970
Has legislation so eroded the common law that landownership is no longer consistent
with traditional Roman-Dutch ideas?
‘Nuisance’ is not a very effective remedy.
s25 (1):
No one may be deprived of property except in terms of law of
general application, and no law may permit arbitrary deprivation of
property.
(2):
Property may be expropriated only in terms of law of general
application (a)
for a public purpose or in the public interest; and
(b)
subject to compensation, the amount of which
and the time and manner of payment of which have
either been agreed to by those affected or decided
and approved by a court.
(3):
The amount of the compensation ... must be just and equitable ...
(4):
For the purposes of this section (a)
the public interest includes the nation’s
commitment to land reform ...; and
(b)
property is not limited to land.
(7):
A person or community dispossessed ... as a result of past racially
discriminatory laws ... entitled ... restitution ... or equitable redress.
(8):
No provision ... may impede the state from taking ... measures to
achieve land, water ... reform, in order to redress the results of past
racial discrimination ...
In the United States:
The Constitution of the United States: the 5th Amendment:
“Nor shall private property be taken for public use,
compensation.”
without just
The eminent domain power of the states is the power to take private property, pay just
compensation to the owner, and transfer the property to public welfare use.
Thinking?
Supreme Court has ‘noted’ that the government cd not function if it cd not take property
from individuals.
One theory is that sovereign states had original ownership of property, individual
possession derives from grant by the state and is held subject to an implied reservation.
Q1 - Was there a taking of private property?
Q2 - Was the taking for a public use or purpose?
Q3 - Was the compensation just?
Real problems and litigation have arisen not, as one might have expected, over ‘just
compensation’ ... but over ‘regulatory taking’ ...
A permanent physical invasion is clearly a taking ... but what about state actions intended
to regulate, which in fact interfere with property rights?
When state actions intended to regulate private conduct to promote the public welfare
have disproportionate effects on property holders, the ‘taking’ may be a ‘regulatory
taking’.
Mining Rights Act 20 of 1967
s143(1):
... no person shall buy, sell, deal in ... any unwrought
precious metal, unless ...
Diamonds Act 56 of 1986
s18: ... no person shall have any unpolished diamond in his possession
unless - ...
Minerals Act 50 of 1991
s5:
... the holder of the right to any mineral ... shall have the
right to enter upon such land ... and to prospect and mine
for such mineral ... and to dispose thereof.
Minerals & Petroleum Res Dvpt Act 28 of 2002
s2:
The objects of this Act are to (a)
recognise the internationally accepted right of the
State to exercise sovereignty over all the mineral and
petroleum resources within the Republic; ...
(c)
promote equitable access to the nation’s mineral
and petroleum resources to all the people of South Africa;
...
s3(1): Mineral and petroleum resources are the common
heritage of all the people of South Africa and the
State
is the custodian thereof for the
benefit of all
South
Africans.
ACQUISITION OF OWNERSHIP
ORIGINAL MEANS OF ACQUIRING OWNERSHIP
[NOTES on ACQUISITION OF OWNERSHIP based on notes by Mrs J Parker.]
Original v derivative acquisition
Acquisition of ownership is original if not derived from the ownership of a predecessor.
Sometimes a predecessor, as in expropriation; but no transfer of rights by predecessor to
successor. Ownership acquired by new unilateral act, free of obligations and benefits
pertaining to predecessor’s rights. Totally new right created.
Acquisition is derivative if ownership derived from/dependent on ownership of a
previous owner. Bilateral transaction. Acquirer gets benefits but also succeeds to
liabilities.
Original modes
The most important are occupation; discovery of treasure; accession; specification;
mixing of liquids and mingling of solids; acquisition of fruits; prescription; expropriation;
forfeiture to the state; and appropriation of minerals.
Occupatio
Unilateral of res nullius.
(a)
object must be unowned thing (res nullius) capable of being privately owned (res
in commercio);
(b)
acquirer must have animus domini;
(c)
acquirer must exercise the necessary physical control over the thing. Physical
control sufficient to make use of the thing –not merely marking property as
owned.
The physical control need not be lawful. Control might be a crime, but ownership
acquired – eg: some pornography; but some legislation does prevent ownership – eg:
uncut diamonds.
Things res nullius susceptible to occupatio are:
wild animals, products of the sea, things belonging to enemies (res hostiles), and
abandoned things.
ACCESSIO/ACCESSION
Ownership acquired when thing/portion of thing is incorporated (by natural/artificial
means) into another thing. Thing incorporated is the accessory; thing into which it’s
incorporated is the principal thing. Ownership of the accessory is lost; owner of principal
thing becomes owner of new entity.
Various tests to determine which is the principal thing, namely:
~
thing of highest value;
~
thing of greatest bulk;
~
thing without which the accessory cannot exist;
~
thing which belongs to person on whose account the things are joined;
~
thing adorned by the accessory; or
~
thing which gives the final entity its identity, form, name or function. (Probably
the best; where one thing loses identity.)
Depending on the process, there are 3 types of accession:
~ natural
alluvion, avulsion, acquisition of fruits, offspring
~ artificial
human effort – inaedificatio (building on the land of another), specificatio
(creating a new species out of the material of another - welding, weaving
in, painting).
~ mixed
both nature and human labour, acquisition of fruits
Immovables - immovables; movables - movables; movables - immovables.
Movables to immovables (superficies solo cedit)
Anything planted, sown, artificially attached to land becomes part of land and property of
the landowner. Land always the principal thing; movable the accessory. Two forms:
planting and sowing (anything sown/planted in soil accedes as soon as it has taken root);
or attachment of buildings and other structures to land – inaedificatio – (anything built
on/attached to soil forms part of the soil).
Movables belonging to third parties where attached to soil? If accession, things become
immovable and fall into ownership of landowner; if no accession, movables remain
property of original owner. To determine, look at:
(a)
nature/purpose of movable (attached thing)
(movable must in nature be capable of acceding to/being
assimilated into an immovable)
(b)
degree/manner of annexation to soil
(if movable completely incorporated into soil or building, becomes
part of soil or building – must be ‘aard en nagelvast’ Sumatie (Edms) Bpk v Venter1990(1)SA173(T)
Courts seem to require physical integration – not mere functional
or economic integration.
(c)
intention of owner of movable.
Based mainly on American case law.
Intention at time of attachment. The intention of owner of movable
is what counts. Rationale seems that owner of movable should not
lose ownership for mere fact an outsider wants to attach movable
permanently to an immovable. Intention required is intention that
accessory shd remain permanently attached to soil/building.
Standard-Vacuum Refining Co of SA (Pty) Ltd v Durban City Council 1961 (2)
SA 669 (A)
Sumatie (Edms) Bpk v Venter 1990 (1) SA 173 T()
PRESCRIPTION
Original mode of acquisition of ownership. Ownership of a thing acquired by
uninterrupted possession for requisite period of prescription. Two views advocated re:
rationale (justification) for acquisition by prescription. (1) the institution of prescription is
based on omission on part of original owner of thing, who didn’t guard property properly.
As penalty for negligent supervision, property taken from owner and awarded to
possessor. Not convincing, as owner can (in principle) do with his property as he likes, so
entitled to neglect it. Also, negligence has never been required and AD has said that proof
of absence of negligence can never constitute a defence to a claim based on acquisitive
prescription.
(2) is a better justification: that legal rules applicable to prescription aim to continue
factual impression of ownership created by long/uninterrupted period of possession;
which cd otherwise deceive 3rd p’s and create uncertainty. To promote certainty,
prescription has consequence that original owner loses ownership if doesn’t claim
restitution of thing during period of prescription. Emphasis not on negligence of owner;
but on incorrect impression created by his negligence.
Traceable to Roman/Roman-Dutch Law; but only the Prescription Act/1943 supplied a
comprehensive statutory basis.
Act defined ‘acquisitive prescription’ as ‘acquisition of ownership by the possession of
another person’s movable or immovable property continuously for 30 years nec vi nec
clam nec precario’. Stated clearly that possessor automatically became owner of thing
after this period had expired. 1943 Act superseded by Prescription Act/1969, in effect
from 1 Dec 1970.
Requirements for acquisitive prescription virtually same as in 1943 Act, summarised:
‘a person shall by prescription become the owner of a thing which he has
possessed openly and as if he were the owner thereof for an uninterrupted period
of thirty years or for a period which, together with any periods for which such a
thing was so possessed by his predecessors in title, constitutes an uninterrupted
period of thirty years.’
So 1969 Act drops the nec vi element and replaced the nec precario element with the
requirement of possession “as if he were the owner thereof”.
1969 Prescription Act has no retrospective effect, so the Act doesn’t apply where
prescriptive period was completed before the date it came into effect, 1 Dec 1970.
But where prescriptive period began to run before the new Act came into force (but was
only completed afterwards) the 1943 Act applies to former period; and 1969 Act to latter
period. So 1943 Act relevant until 30 November 2000.
(eg: if prescription began to run in 1950 the first period, 1950 - 1 December 1970, is
governed by Prescription Act of 1943; later period, from 1 December 1970 onwards,
regulated by Prescription Act/1969.)
So requirements of both Acts must be kept in mind to determine whether prescription has
occurred in a particular case.
Finally, it should be noted that land reform legislation and the new constitutional
dispensation do not affect acquisition by prescription.
Requirements:
To acquire ownership by prescription, only two requirements must be fulfilled - in terms
of both Prescription Acts,
(a)
(b)
acquirer must have had civil possession of the thing; and
possession must have been for uninterrupted 30 years.
Neither ‘just title’ nor bona fides required for acquisition of ownership by prescription.
Requirement of possession:
1943 Prescription Act: possession must be nec vi nec clam nec precario; supplemented in
case law by additional requirement of “adverse user” or “adverse possession”.
1969 Prescription Act requires only that a person must possess “openly and as if he were
the owner”.
Different concepts, but it seems the two Acts never intended to require greater possession
than the possessio civilis of Roman law – namely, physical control (corpus) of a thing
coupled with the intention to be owner (animus domini).
Qualification nec vi implies retention of possession without force, or peaceably.
Now beyond doubt that a thief or a robber can obtain ownership by prescription, so initial
acquisition of possession may have been by force as long as possession isn’t maintained
only by force.
The nec vi qualification of possession makes sense in forms of prescription which
requires a short period of possession; but is not meaningful where a 30 year period is
required, since it is improbable a thief/robber cd forcibly prevent owner reclaiming
property for 30 years.
Owner free to bring a mandament van spolie or to vindicate his property during the
period in which prescription runs. Deletion of the nec vi requirement in 1969 Act
therefore has no real practical importance, as unlikely anyone wd be able to possess by
force for a long period. Moreover, nothing prevents an owner who is restricted by force
from arguing his right in court.
Nec clam requirement means possessor must not possess secretively; possession must be
patent, visible and manifest.
Requirement confirmed by 1969 Act; which expressly requires that the possessor must
possess openly.
1943 Act required possession to be non-precarious (nec precario). Initially used in the
wide sense of “adverse user” and at other times to mean “without permission” or
“without consent” – ie: not with the permission of the owner. If possesses with original
consent of owner, prescription won’t run; but if initial possession was with consent, and
that consent fell away, then the possession is nec precario and prescription begins to run.
High Court decisions then led to introduction (not in Act) of “adverse possession” or
“adverse user” as requirement for acquisitive prescription – meaning ‘use and enjoyment
of a thing without molestation by, and in conflict with the rights of, the owner thereof’.
(A possessor can’t claim acquisition of ownership by prescription if has even once
recognised the superior rights of the owner.)
Pratt v Lourens
So a lessee or usufructuary can never acquire ownership of the object of the
lease/usufruct by prescription.
Malan v Nabygelegen Estates AD
“In order to create a prescriptive title, such occupation must be a use adverse to
the true owner and not occupation by virtue of some contract or legal
relationship…..which recognises the ownership of another.”
Clear a person who possesses on ground of revocable permission cannot have intention of
an owner (animus domini) and so doesn’t fulfil requirements of possessio civilis; so
elimination of requirement by 1969 Act did not change the legal position after 1970.
“Adverse user” is not an independent requirement but a component of the possessio
civilis that is required for prescription.
Du Toit v Furstenberg
1957 (1) SA 501 (O)
Bisschop v Stafford
AD 1974
So no difference in principle between possession required for prescription before 1970;
and possession required thereafter. The requirement of nec precario and the “additional”
requirement of “adverse user” accommodated within possessio civilis, namely physical
control of an object with the intention of an owner (animus domini). Animus domini
implies an intention to be and not an intention to become owner.
Addition of previous terms of possession
Second requirement for acquisition of ownership by prescription is that possessor must
have possessed the object for an uninterrupted period of 30 years.
A person may add to his period of possession the period of his predecessor/s in title; as
long as that possession also complied with the requirements of possessio civilis.
Continuity of possession
Possession must be uninterrupted for full 30 years. Course of prescription can be
interfered with by interruption or suspension.
With interruption, course of prescription is, subject to certain qualifications, completely
halted. Running of prescription must start again.
Suspension of prescription is a temporary suspension of the course of prescription. Once
circumstances that caused suspension disappear, course of prescription is resumed.
Interruption
Either natural or civil.
Natural interruption: possessor loses possession of thing either voluntarily/involuntarily.
Possession lost voluntarily when possessor voluntarily surrenders thing to true owner or a
third party; or if possessor no longer fulfils the requirements of possessio civilis.
Immaterial whether the possessor dispossessed by stealth or by force; nor does it matter
whether the possessor has been dispossessed by the owner or an outsider or whether he
has been prevented by vis maior from exercising control over thing. Actual dispossession
must occur; a mere protest by true owner is insufficient.
If actual dispossession had taken place the position under both common law and
Prescription Act/1943 was that prescription was interrupted, and had to start de novo.
Prescription Act/1969 introduced a new provision that possession not interrupted if
dispossessed only temporarily by a thief, a robber or even by the owner (who has taken
the law into his own hands). Involuntary loss of possession does not interrupt running of
prescription if possessor regains possession by legal proceedings (within 6 months) or by
any other lawful means (within a year). Only if possessor voluntarily acquiesces in the
dispossession, fails to institute legal proceedings (within 6 months) or is prevented by vis
maior from regaining his possession (within a year), is running of prescription
interrupted.
Running of prescription also terminated by judicial interruption. The Prescription
Act/1969 confirms common law rule that prescription interrupted by service of any
process on possessor ito which ownership is claimed.
Institution of process has no interrupting effect if person claiming ownership does not
successfully prosecute claim to final judgment, or if judgment is abandoned by
successful plaintiff, or is subsequently set aside. If running of prescription is interrupted,
it has to start de novo, and only as from the day when final judgment given.
Suspension
Under common law prescription did not run against certain categories of persons (who on
account of incapacity or any other reason were prevented from enforcing their rights).
Act/1943 did not consider, but generally accepted common law wrt acquisitive
prescription remained applicable. Under common law prescription did not run against
(inter alia) minors, insane persons, persons under curatorship, persons absent in the
service of the state or by reason of war, married women were subject to husbands’ marital
power, and certain fideicommissaries. Suspension only led to temporary interruption.
Consequence of suspension was that period of suspension was added on to the period of
prescription.
1969/Act does not allow traditional approach. Instead, suspension only relevant if ground
of suspension exists within 3 years of completion of period of prescription.
Completion of prescription postponed until 3 years have elapsed from time when ground
of suspension ceased to exist.
Owner thus allowed 3 years after ground of suspension has elapsed to enforce his rights.
(To apply rules of suspension only if impediment occurs at completion of period of
prescription makes sense since only at that stage that owner shd have the necessary
capacity or have the opportunity to enforce rights.)
Unlike position under common law, Act/1969 recognises a numerus clausus of grounds
of suspension.
First group of circs relates to the person against whom prescription runs; namely a minor,
an insane person, a woman whose separate property is controlled by her husband by
virtue of his marital power, a person under curatorship or a person who is prevented by
superior force from interrupting the running of prescription.
Second group of circs relates to persons in favour of whom prescription runs; namely a
person outside RSA, a person married to the person against whom prescription is
running, and a person who is a member of the governing body of a juristic person against
whom prescription is running.
Effect:
Once requirements for prescription are complied with, the former owner (though still
registered as owner) loses ownership and possessor becomes new owner. If land acquired
by prescription, he’s entitled to demand registration in his name. (Registration not
necessary for acquisition of ownership, but is advisable.) Registrar of Deeds not entitled
to make the necessary entries without an order of court, and since a court cannot on its
own volition take cognisance of prescription, person who has acquired ownership by
prescription must apply for an order of court compelling Registrar to register the land in
new name. Applicant must prove obop that req’s of prescription complied with.
Various Provincial Ordinances contain provisions which more or less correspond with the
State Land Disposal Act. The effect of these is that land owned by, vested in, held in trust
or under the control of a local authority cannot be acquired by prescription.
DERIVATIVE MODES OF ACQUIRING OWNERSHIP
Most important derivative modes are:
~ delivery in the case of movables; and
~ registration in the case of immovables.
There are three instances where ownership in an estate passes automatically (ie without
delivery or registration), namely on marriage ICOP, on insolvency, and on death.
NOTE: Another way (perhaps simpler to understand) to see this is to see ‘delivery’
as being required for any transfer of ownership – and to see physical delivery (of
movable property), registration (of immovable property) and cession (of incorporeal
property) as being different forms of delivery. In these notes, however, delivery of
incorporeal property is not dealt with; and ‘delivery’ is generally used to mean
‘physical delivery’.
Ownership does not, as in English/French law, pass on mere agreement between the
parties - but only on delivery or registration. In Roman-Dutch/South African law the
agreement giving rise to transfer is strictly separated from the delivery or registration
itself. Agreement creates only personal rights and obligations - an additional transaction
is required for transfer of ownership.
So there are two separate legal acts, each with its own requirements. Also the case when
the two transactions take place simultaneously (as is normal). Always possible to
distinguish between the agreement which gives rise to the personal obligation to transfer,
and the actual transfer of the movable/immovable.
Note in delivery of a movable, factual control as well as ownership are transferred on
delivery; but in case of registration of an immovable (in name of acquirer), ownership is
transferred by registration whereas factual control only passes when the acquirer enters
into possession of the land.
Requirements
For passing of ownership by either delivery/registration:
~ The thing must be a res in commercio.
~ The transferor must be capable of transferring ownership. Nemo plus iuris ad
alium transferre potest, quam ipse haberet.
~ The transferee must be capable of acquiring ownership.
~ At moment of passing of ownership, transferor must have intention of transferring
ownership (animus transferendi dominii) and transferee must have intention of
accepting ownership (animus accipiendi dominii).
~ Iusta causa sometimes required for passing of ownership. Implies transfer must
be based on a cause.
~ In case of sales of movables there’s a special rule according to which ownership,
notwithstanding delivery, does not pass … unless either purchase price is paid or
security or credit is given.
~ Passing of ownership must take a specific form. Ownership of movables is passed
by delivery; whereas ownership of immovables is passed by registration in the
deeds office.
Causal or abstract system
Much debated.
Causal system: passing of ownership dependent on existence/ validity of cause giving rise
to the transfer (iusta causa).
Abstract system: the passing of ownership wholly abstracted from agreement giving rise
to transfer; and is not made dependent on such an agreement.
Emphasis placed on the real agreement which exists independently of the agreement
giving rise to the transfer. The invalidity of the latter agreement has no influence on the
validity of the real agreement. If there is a serious intention to transfer ownership,
ownership passes to the transferee, who can in turn validly pass transfer to a third party.
Abstract system favoured.
Commissioner of Customs and Excise v Randles Bros and Hudson Ltd
Majority seemed to support abstract system of transfer unequivocally.
1941 AD 369
Watermeyer JA: “If the parties desire to transfer
ownership and contemplate that ownership will pass as a result of the
delivery, then they in fact have the necessary intention and the ownership
passes by delivery. It was contended, however, on behalf of the appellant
that delivery accompanied by the necessary intention on the part of the
parties to the delivery is not enough to pass ownership; that some
recognised form of contract (a causa habilis . . .) is required in addition . .
. I do not agree with that contention. The habilis causa referred to by Voet
means merely . . . an appropriate reason for the transfer or a serious and
deliberate agreement showing an intention to transfer.”
Trust Bank van Afrika Bpk v Western Bank Bpk 1978(4)SA281(A)
In an abstract system ownership passes to the transferee despite the absence of a valid
causa. Consequently, third parties relying in good faith on the data in the deeds office
will not be prejudiced.
The main reason for applying an abstract system of transfer is the legal certainty it brings
about in commercial dealings.
Real agreement: under the abstract system a real agreement, namely an agreement to
transfer and accept ownership, is required for the transfer of ownership. In every instance
it must consequently be determined factually whether a real agreement has indeed been
reached.
Summary: So normally three juristic acts involved in the passing of ownership:
The obligationary (contractual) agreement; the real agreement to transfer/receive
ownership; and the actual transfer of the property (by delivery for movables; registration
for land).
Delivery
General
Ownership in a movable corporeal thing is transferred by delivery (transfer of
possession). Originally, delivery required literal handover to transferee (traditio vera).
Later accepted it was sufficient if transferee placed in position to exercise physical
control over the thing whenever he liked (traditio ficta); now called ‘constructive
delivery’.
Forms of constructive delivery:
~ clavium traditio
Contents of a box, cupboard, room, warehouse are transferred by handing
over the keys thereof. This form of delivery is often referred to as
‘symbolic delivery’ (traditio symbolica). Handing over of a mere symbol
is not sufficient to effect transfer.
The parties must have the intention to resort to this form of
delivery;
keys must be delivered with intention that contents of the
warehouse be thereby transferred; and
keys must supply transferee with exclusive control over the
contents of the warehouse.
Closely analogous to clavium traditio and also called ‘symbolic delivery’
is the case where goods are transferred by delivery of documents of title,
bills of lading, warehouse receipts.
~ traditio longa manu
Delivery occurs by thing being pointed out (‘with the long hand’) by
transferor. Usually employed when the size, inconvenient. No change of
possession, so strict requirements:
~
~
~
~
parties must have intention to use this form of delivery;
thing must be clearly pointed out by transferor to transferee;
after thing pointed out, transferee must be capable of exercising physical
control and transferee must have intention to be owner of the thing; and
thing must be clearly identified. Because of the opportunity for fraud, the
courts have been reluctant to extend the scope of this form of delivery to
things which can be easily handled.
~ traditio brevi manu
‘With the short hand’ occurs where person to whom thing is transferred is
already in possession of the thing but on a basis other than ownership.
Ownership passes as soon as the parties have the requisite intention to
transfer and acquire ownership. No further overt act is required.
Meintjes v Wilson
~ constitutum possessorium
In a sense the reverse of traditio brevi manu. Transferor retains physical
control of thing to be transferred, but acknowledges the transferee
henceforth owns the thing and that he retains it on behalf of the latter.
Transfer effected primarily on basis of intention and occurs despite fact
that external circumstances under which thing is held do not support the
change of ownership.
Since no publicity, obviously open for fraud. Constitutum possessorium is
never presumed. Party alleging it must prove that following requirements:
~
transferor must be owner and possessor of
thing at moment of transfer;
~
transferor must cease to possess the thing for himself and
begin to hold the thing for transferee;
~
transferee must consent that detention be retained by
transferor; and
~
must be a clearly proved causa detentionis in form of a
clear contractual relationship ito which transferor becomes
detentor for transferee.
Causa detentionis can either be an express agreement or a tacit
agreement deduced from the surrounding circumstances.
Finally, bona fides of parties must be beyond doubt. It must be
proved that the parties had the genuine intention to transfer and
accept ownership.
~ attornment
Method of delivery developed in English law and taken into South African
law. Thing to be transferred is in physical control of a third party who
holds it on behalf of the owner. Transferor, transferee and holder enter into
a tripartite agreement to the effect that holder (party attorning) henceforth
holds thing on behalf of the transferee.
Requirements for valid attornment:
~
must be a tripartite agreement or mental concurrence on part of all
3 parties that holder will henceforth hold thing on behalf of
transferee, not on behalf of transferor; and
~
holder must exercise factual control over thing
or at least have right of control at moment when he consents to
hold it in future on behalf of transferee.
~ cession of the right of vindication
REGISTRATION
General registration in Deeds Registry is the mode ito which immovable property is
transferred.
Deeds Registries Act 47/1937 establishes a uniform system of land registration for whole
of South Africa. Main aim of a registration system is ‘to compile a complete register of
all land public as well as private, showing the ownership of every parcel and any
limitation or restriction to which that ownership may be subject’. Publicity with regard to
ownership and lesser real rights in land shd help to avoid double sales and protect
creditors and proposed holders of security rights in land.
Procedure: Registration of transfer occurs in the nine Deeds Offices throughout the
country. Each registration office has a Registrar of Deeds and several officials. Each plot
clearly identified with maps and diagrams drawn by Surveyor-General.
Effect: Being registered owner is, with a few exceptions, considered proof of ownership
not only as far as the registered owner is concerned, but also wrt a 3rd party relying on
the deeds registry. Though Deeds Registry is public, it doesn’t necessarily follow that
every member of the public has constructive knowledge of every real right registered in
respect of a particular plot of land.
Positive or negative system:
South Africa adopted a modified negative system of registration. Registration is based on
the real agreement or actual intention of the transferor and transferee to transfer and
acquire ownership. Because of this the accuracy of the information in the deeds office is
nowhere expressly guaranteed. In support of this, the Deeds Registries Act expressly
excludes the liability of the state and registration officials for incorrect entries in the
deeds registry.
Property Law 2007: LLB
Lecturer: Mr Dave Holness
SECTIONAL TITLES
Recommended reading
1.
:
Sectional Titles Share blocks and Time-sharing Van
der Merwe and Butler
South African Property Practice and The Law
Chapter 8 Delport.
Silberberg and Schoeman’s The Law of Property
Kleyn and Boraine 3rd Ed Chapter 15. Butterworths
Introduction to the Law of Property AJ van der
Walt and G J Pienaar 2nd Ed Chapter 6. Juta
Ownership of immovable property and the maxim superficies solo cedit
Silberberg and Schoeman1 define the law of property as “the sum total of the
various legal norms which regulate the legal relationships between persons
and things, and in this regard also the legal relationships between legal
subjects inter se.”
In this part of our commercial law course we are concerned only with certain
statutes which regulate that branch of the law of property which deals with
legal relationships between legal subjects in regard to a particular
classification of “thing”, that is, immovable property
1
The Law of Property 3rd Ed. Kleyn and Boraine at page 2
Immovable property consists of land and anything which becomes a part of
the land and certain rights which by virtue of their attachment to land are also
regarded as immovable.
The maxim superficies solo cedit, roughly translated means “buildings
become a part of the land”. This maxim conveys the traditional approach of
Roman law, adopted by our common law, that where structures are attached to
the land by their owner with the intention that they be permanently annexed to
the land these structures lose their separate identity as “things” capable of
separate ownership and become part of the land and thus the property of the
owner of that land.
For these reasons it is not possible under the common law to won such
structures separately from the land on which they are erected. It is therefore
not possible to own a flat in a building owned by another. Nor is it possible
under the common law to own a house on the land of another.
Where there is more than one house on a piece of land registered as an erf, for
example, it is not possible for the owner to sell one of the houses as a separate
unit. If he wished to transfer ownership to another in respect of that house he
would have to allow that other to become a co-owner of all the land and both
of its houses. Each would have what is described as an undivided share in the
land with all its annexations. This is not a satisfactory form of ownership for
either of the two parties concerned. For this and other reasons set out under
paragraph 3 below it became necessary to find a way whereby individual
ownership of buildings and parts of buildings could be separated from the
ownership of the land on which they were erected. The change came in the
form of the Sectional Titles Act 1971.
2.
The Sectional Titles Act
The Act has been amended from time to time. The latest consolidated Act
which repeals the earlier Acts is Act 95 of 1986 which came into operation in
June 1988. There have been small amendments since then the latest being Act
44 of 1997 which amended the Act fairly extensively. The broad effect of the
Act is set out under paragraph 4 below.
3.
The reason for sectional title legislation
One of the greatest problems faced by many South African cities and towns
has been the migration into these cities and tows from outlying rural areas,
which, coupled with the annual increase in population and general economic
development, has led to very serious housing shortages.
Dwellings first occupied before the 21st October 1949 and in certain cases
dwellings first occupied prior to 1st June 1966 were generally subject to rent
control prior to the gradual phasing out of the scope of the Rent Control Act.
There is little doubt that owners of properties subject to rent control are
disadvantaged and, if their tenants take advantage of the Act, will not realize a
fair return on their investment. It is not surprising therefore that these older
buildings which usually occupy prime positions in the centre of the cities were
becoming neglected and run down with little incentive for their owners to
improve them. It is also not surprising that at the time the possibility of
legislation in respect of sectional title ownership was first mooted when most
properties were subject to rent control there was as a result little incentive for
developers to build blocks of flats. These factors all contributed to the
housing shortage.
From the point of view of the city planners one of the best ways of alleviating
the housing shortage would be to make the best possible use of the land
available and this meant more apartment type buildings.
There were also pressing sociological reasons why the old traditions should be
changed and sectional ownership permitted. It was recognized that from a
psychological point of view it is far more rewarding for a person to be the
owner of his home than merely the tenant. Those people who were tenants
were generally in that category because they could not afford to buy their own
house. Sectional ownership would permit more people in lower income
brackets to become owners. It would also offer to these people an opportunity
of investing their capital as a hedge against inflation instead of spending it on
rentals.
Furthermore community housing offers the advantages of security, shared and
thus cheaper amenities and a closer social involvement than does separate
housing. Society in South Africa like its counterparts in other parts of the
world had outgrown the maxim superficies solo cedit and the legislature had
to overcome its limitations.
4.
The broad effect of the Act
(a) “To provide for the division of buildings into sections and common
property and for the acquisition of separate ownership in sections coupled
with joint ownership in common property.” These words are taken from
the preamble to the 1986 Act. What they mean is perhaps best illustrated
by an example:
Prior to the Act if a piece of land had twenty flats on it together with a
communal garden, drive, and perhaps a swimming pool, the only way the
20 flat dwellers could own their flats would be by becoming joint owners
of the land on which the complex was situated. That would have
presented tremendous problems.
Under the Act if the complex is converted by its owner to a sectional title
scheme each can become the owner of his separate flat which is called a
“section” and a co-owner of the common property, the lawn, roof, etc.
(b) To provide the necessary legislative machinery for such change; for
example:
i)
provision for the approval of development schemes by local
authorities;
ii)
the requirement for plans setting out the sections and the
common property
iii)
the opening of a Sectional Titles Register and the regulation
of the transfer of ownership and other real rights in units
transferred (a unit comprising the individual ownership of a
section coupled with the ownership in undivided shares of the
common property2)
iv)
provisions dealing with the common
subdivision and extensions of sections,
v)
provisions setting out rights of exclusive use of certain parts
of the common property
vi)
and provisions for quotas and levies
property
and
(c) To protect purchasers and tenants from developers.
(d) To provide a framework for management of the jointly owned property
and rules regulating the rights of the owners of units in relation to the use
of their own sections.
5.
How a sectional title scheme works in outline
(a) The property
2
The component parts of a unit are not divisible. If a section is sold the joint ownership of the
common property goes with it.
A scheme may begin with a piece of land on which buildings are then
erected or it may involve the conversion of existing buildings currently
owned by the developer under the maxim superficies solo cedit.
If the building is to be a new building then obviously it must confirm to
any regulations which would normally apply and be approved by the local
authority concerned.
(b) An architect or land surveyor acting on behalf of the developer must
inspect the property and certify it complies with any operative Town
Planning Scheme, Statutory Plan or conditions subject to which a
development was approved in terms of any law. If there is noncompliance condonation must be obtained from the local authority.
(c) Draft Plans (Section 4)
A Sectional Plan and a block plan must now be prepared. A land surveyor
must prepare the block plans which concern the land and its measurement.
He may also do the plans of the section but an Architect would normally
be employed for this. (A developer who intends to establish a scheme
shall cause a draft Sectional Plan to be submitted to the Surveyor General
in terms of Section 7).
(d) Notification to tenants
If the building is an existing building then in terms of Section 4(3)(a) the
developer is required to notify every lessee who is leasing a portion of the
premises. The developer must give 14 days notice calling a meeting at
which:i)
ii)
details of the scheme are given, and
information regarding tenants rights in terms of Section 10
are given
Provided that the developer need not comply if the lessee in writing says
that he is aware of his rights and he has not intention of purchasing his
unit.
(e) Surveyor General and Registrar of Deeds
The draft Sectional Plans completed in terms of Section 4 are then
submitted to the Surveyor General for approval of the Plan and then to the
Registrar of Deeds for the registration of the sectional plan and for the
opening of the Sectional Title Register in terms of Section 11 3. The
Registrar will then, when the requirements of the Act and any other
Only a “developer” may apply for the approval of a scheme and a developer must by definition be
the registered owner of the land
3
relevant law have been complied with, register the Sectional Plan and
open the register in terms of Section 12 of the Act.
(f) Tenant Protection
Where a developer is converting a building which has tenants in
occupation the Act offers these tenants a measure of protection from
sudden ejectment by virtue of the provisions of Section 10 which also
gives the tenants a right of first refusal in respect of the purchase of those
sections which they are leasing. (The developer must offer the unit to a
tenant and sit the guaranteed period of 90 days and not evict the tenant for
a further 180 days (unless the tenant refuses to pay his rent or causes a
nuisance)).
(g) Sale of units
Once registration has been effected the way is now open for the developer
to transfer his ownership in the various sections to purchasers.
Assuming that the developer has no difficulties in relation to tenants he
will sell his units to purchasers who will acquire ownership of the units by
endorsement on the sectional title deed signed by the Registrar. Coupled
with the ownership of the separate section the purchaser also becomes a
co-owner of the common property in undivided shares. Transfer is
effected by a conveyancer.
(h) Creation of the body corporate
Now there are several owners who each have separate ownership of their
sections and ownership of the common property in undivided shares. Who
makes the decisions regarding upkeep of the common property; for
example, roofs, plumbing, exterior walls, gardens etc.? Are there any
controls in relation to exercise by the various owners of their rights in
relation to their own sections and in relation to the common property?
Obviously someone has to be in control and there must be some control
over the power which he exercises on behalf of all of them. The Act deals
with these problems by the creation of a body corporate of which each
owner automatically becomes a member upon acquisition of ownership of
his section.
(i) Direction of the body corporate
The body corporate functions according to the provisions of the Act and
Regulations and certain rules in much the same way as a company. The
value of the vote attached to membership depends upon the participation
quota allotted to each section according to a formula for calculation set out
in the Act which is based on size of the section. The participation quota
must be set out in the schedule to the sectional plan which is registered.
The participation quota is also used to determine the proportional share of
the individual owner in the common property, the amount of the
contribution he must make towards the expenses of the body corporate and
his proportional liability for its debts. There is a procedure whereby the
members can make rules to alter the value of the vote accorded to a quota
but time does not permit us to examine this now.
The board of trustees exercise the management function of the body
corporate subject to restrictions set out in the act or the rules or in a
resolution of the members in general meeting.
The rules are divided into two groups, management rules and conduct
rules.
They are set out in GN R664 GG11245 dated 8th April 1988 and have
been amended by several further Government Notices. The former apply
automatically but there is provision for the developer to “substitute”
management rules when he applies for the opening of a sectional title
register to the extent prescribed in the regulations. These rules can be
amended by the body corporate, also “as prescribed by regulation”. The
latter also apply automatically but the developer seems to have a freer
hand to alter these when he applies for the opening of the sectional title
register provided that as altered they are not in conflict with any
management rules. The body corporate has the same power by special
resolution.
The management rules deal with such matters as trustees, improvements,
finances, managing agents and meetings of members. The conduct rules
are more related to the use and care of the sections and common property.
The body corporate consists of two organs, the board of trustees who, like
the board of directors of a company, are elected in terms of the rules by
the members in general meeting and they constitute the other organ.
6.
Rights and duties of section owners
Ownership has been described as a “bundle of rights”. Silberberg and Schoeman
describe ownership as “the real right that potentially confers the most complete or
comprehensive control over a thing, which means that the right of ownership
empowers the owner to do with his thing as he deems fit, subject to the limitations
imposed by public and private law.4 It includes, inter alia the right to possess
property, to use and enjoy it, to take any fruits which it may produce both natural
or civil, to destroy it or change it, to exclude others from any of these rights in
relation to it and the right to alienate it or grant to others limited real rights in it.5
4
5
At Page 161
For example, lease, mortgage and servitude
The owner of a section has all these rights. The subject matter of his ownership, a
unit, is deemed by the Act to be land so he is in much the same position as any
other land owner.
But he is an owner of a section which is part of a group of sections and which
involves a common ownership of the remainder of the property. This sort of
sectional ownership could not operate to the satisfaction of all without a body of
rules which to some extent have to make inroads upon the owners usual rights as
a landowner. These inroads are created by:
a)
The concurrent rights of all owners. They cannot exercise their rights in
such a way as to deny to others their rights. Some adjustment has to be
made in the exercise by an owner of his right of use and enjoyment; for
example;
Undue noise, unhygienic behaviour, and undue use or misuse of shared
facilities could all amount to an infringement of the rights of others and
therefore would not be within the rights of the owner.
b)
The title deeds. There by be restrictions registered on the title deeds such
as servitudes over the common property in favour of particular sections;
for example, exclusive personal use reserved to individual owners of
separate garages forming part of the common property.
c)
The Act restricts the freedom of the owner to use his thing as he pleases.
Have a look at the duties imposed on an owner in terms of section 44 of
the Act. Duties of owners in terms of section 44 include a duty to allow
reasonable access to duly authorized persons for the purposes of
inspection and maintenance, to carry out certain work if required to by a
competent authority, to pay all charges etc. in relation to his section, to
keep his section in good order and repair, not to interfere with or cause a
nuisance to other occupants, to keep the body corporate informed of any
change of real rights in his section and, if a purpose is specially registered
on the plan to use his section for that purpose only.
d)
The rules, particularly the conduct rules, also restrict the owner. There are
provisions relating to the keeping of animals and birds, refuse disposal, the
parking of vehicles upon the common property, damage to the common
property, the external appearance of the section, signs and notices,
littering, laundry and washing lines, letting of units and pest control.
e)
In addition to these restrictions the members themselves can make new
rules or resolutions which, provided they are not inconsistent with the Act
or unreasonable, may restrict the owners freedom in respect of his
property.
f)
There is a further restriction on the right of the owner in respect of the
alienation of this section. Section 15B(3)(a) prevents an owner from
selling his unit unless ad until he has paid all his dues to the corporate
body or made satisfactory arrangements to have these paid because before
the transfer can be registered in the name of the purchaser the conveyancer
has to certify to that this has been done.
In summary therefore an owner has the usual rights flowing from
individual ownership of immovable property but subject to certain
restrictions necessarily imposed for the common good or as a prerequisite
for the granting of approval of a plan by the municipal body concerned.
SHARE BLOCKS
Recommended reading
sharing
:
Law
Property
16.
der
1.)
Sectional Titles Share Blocks and TimeVan der Merwe and Butler
South African Property Practice and The
Chapter 9 Delport
Silerberg and Schoeman’s The Law of
Kleyn and Boraine 3rd Ed Chapter
Butterworths.
Introduction to the Law of Property AJ van
Walt and G J Pienaar 2nd Ed Chapter 6. Juta
The essence of a share block scheme
A share block scheme is one in which a company which has real rights to a
property allocates it to its shareholders a right to use and enjoy a portion or the
whole of that property for a particular period. The share does not pay a dividend.
The use and enjoyment of the property is the holder’s only economic benefit
while the company is in operation. It differs from sectional title in that the
shareholder in terms of a share block scheme is not an owner of that portion of the
property allocated for his use. The Company is the owner or holder of the real
rights in the property.
2.)
The necessary ingredients
The components of such a scheme are :
a)
The promoter (developer)
He is the person who initiates the scheme. His motive is usually to make a
profit either from the property if he owns it or from the shares which he
offers. His position is regulated by the Act which defines him as a “share
block developer” which in turn is defined as:
“any person by whom, on whose behalf or for whose behalf more
than 50 percent of the share block company are held or controlled
and, where two or more persons by whom, on whose behalf or for
whose benefit more than 50 percent of the shares of such a
company are jointly held or controlled, act in concert in relation to
or are jointly connected with the business of the company, each of
such persons;”
In effect this means that the promoter will initially be a developer but later
will drop out as he sheds his shares and a shareholder may become a
developer if he ends up holding more than 50% of the shares of the
company.
b)
The share block company
The promoter forms a new company or adapts an existing one. He would
go about this in the normal way. It is a normal company in many respects
and is registered under the Companies Act 1973. It may be a public or a
private company. The distinguishing features of the share block company
are attributed to it by the Share blocks Control Act 59 of 1980. If the
company already exists then its memorandum and articles will have to be
adapted. Note that no extra fees are required for this or for the change of
name required by section 9(1)6. The more important distinctions are as
follows:
6
i)
There is no danger of the company being wound up just because
the number of members is below the minimums of the Companies
Act7.
ii)
The name share block company must feature in the name.8
iii)
A share block company may provide it its articles for compulsory
loans by members to the company9
iv)
Every share must carry an equal vote and must confer a right in the
shareholder to the use of immovable property10
v)
The share capital clause of the memorandum would set out the
number and value of the shares which are allocated to a share
block. The shares of the company are blocked in proportion to the
number value and size of the accommodation units; for example, a
single bedroom unit might have 50 shares allocated to it. This is
the share block. Each of these shares may have a value of R2000.
Such a share block will cost R100,000. A two-bedroom sea facing
Sections 2(2) and 9(2)
Section 3(1)(a)(ii)
8
Section 9(1)
9
Section 3(1)(c)
10
Section 3(1)(b) and 10. Although paragraphs (a) and (b) of section 10 are separated by the word
“or” it seems that the intention of the section is that both should apply.
7
unit might have 75 shares allocated to it also priced at R2000 each.
This will cost the shareholder 150,000. The price of the shares will
be determined by the promoter who will build in all his costs and
his profit.
vi)
The main object of a share block company “shall be to operate a
share block scheme in respect of immovable property owned or
leased by it.”11
The Act restricts the company to the pursuit of only its main and
ancillary objects and restricts its powers to only those powers
necessary for it to achieve these objects. Any act ultra vires these
objects or powers will be void. Furthermore the company is
prohibited from alienating or ceding its rights to the immovable
property of the scheme without a special resolution of the
members.12
c)
vii)
The articles of the company must set out the entitlement of a
member to the use of a portion of the immovable property on the
terms set out in the use agreement between the member and the
company.13
viii)
Before this use agreement is entered into a copy of it must be
lodged with the Registrar.14
The property to be used
The promoter has a number of options. He may buy the land himself,
erect the buildings and then sell or lease them to the company or buy
existing buildings and sell or lease them to the company or arrange for the
sale or lease of existing buildings directly to the company. As the
company has no money at first it will be loaned to the company either by
the promoter or a third party. The company’s loan obligation will then be
transferred to the shareholders when they purchase their shares from the
promoter. The shareholder will be purchasing two separate items, the
share at its market price and the loan account which will represent the total
loan obligation of the company divided between all the shareholders. This
is credited to the member as he contributes.
11
Section 7(1)
Section 8
13
Section 7(2)
14
Section 7(5)
12
d)
The share block owners
At first all the shares will be registered in the name of the promoter.
Gradually he will sell these off and a body of independent members will
be formed. These people are shareholders but shareholders whose interest
is in the use of a portion of the immovable property as opposed to
financial rewards in the form of dividends. At the time of purchase of
their shares they will enter into a use agreement with the company which,
as we saw above is enshrined in the articles. This will set out the terms
and conditions of their use of the unit and of the complex as a whole. This
use can be very specific, for example, the exclusive use of apartment 294
for 25 years or for so long as the company remains in operation, or it can
be flexible as to the nature of the accommodation and the period of use.15
The shareholders finance the scheme by purchasing the shares and by
contributing to the company’s loan obligation, usually in instalments, and
by paying into a maintenance levy.
The members gradually take control of the company and manage its
business through the directors whom they appoint who are usually
required to abide by the set of management rules.
3.)
The broad effect of the Act
Share block schemes were in operation long before the Act came into being. It
was introduced for the purpose of controlling these schemes with a view to
consumer protection, protection of existing tenants and for the purpose of
providing an option of conversion to a sectional title scheme. A company is
presumed to operate a share block scheme and is therefore subject to the
provisions of the Act if any share of the company accords to the shareholder a
right or interest in the use of immovable property.16
The Act attempts to achieve these aims in the following way:
a)
The sale of share blocks
i)
15
16
Tenant protection
For example a time-share may be based upon a share block scheme. See next lecture
Section 4
We saw that a developer in a sectional title scheme has to inform
tenants of the scheme and that they have a right of first refusal and
a
period in which to make up their minds. Much the
same applies in a share block scheme.
ii)
Written contract required
A written contract must be entered into between the seller and the
share block purchaser.17 Failure to comply with this renders the
contract void with much the same provisions as are to be found in
the Alienation of Land Act. A copy of this contract and the
documents required to accompany it must be handed to the
purchaser within 14 days of the conclusion of the contract.18
iii)
The contract must contain specified information and must be
accompanied by certain documents.19
17
Section 16
See next paragraph
19
Section 17 as read with the second schedule to the Act.
18
The information which the contract must contain includes the following:
The name and address of the share block company
The name, addresses and occupations of the directors, their terms of office, their
remuneration and particulars of those who have a right to appoint them.
Whether and by whom the scheme is managed and whether or not funds are entrusted to
such manager.
Information as to the borrowing powers of the company.
The names and addresses of the auditor and secretary of the company and the
professional qualifications of the secretary
A description of the scheme property and its extent and the portion to be used by the
purchaser, and if the property is not owned by the company, particulars as to the terms of
its lease.
Particulars as to the terms of any of any mortgage of the scheme property.
When the purchaser can take occupation.
If it is known that a sectional title cannot be registered that fact must be set out.
The names and addresses of the parties.
A description of the share, the name of the current registered shareholder if such person is
not the seller and if the seller is a developer how many shares he has and how many are
The aim of these two requirements is to inform the purchaser of all
that he needs to know concerning the shares he is purchasing.
iv)
Much the same restrictions as to the receipt of consideration as
apply under the Alienation of the Land Act apply similarly to a
share block scheme except that the condition precedent is the
incorporation of the share block company instead of the
registrability of the Land20
b)
A purchaser cannot waive his rights21 and in terms of section 17 (2) any
forfeiture clause will be subject to the Conventional Penalties Act 1962
and its effect therefore subject to amelioration by the court.
c)
The ultra vires doctrine has full effect.22
d)
The company cannot increase its loan obligation or encumber it’s assets
held by others.
The purchase price and how and where it is payable, a breakdown of any amounts
payable in excess of the purchase price and the interest payable.
The amount of the levy payable.
The amount of the company’s total loan obligation, the terms of redemption, the interest
payable on the loan and the rights ceded by the seller regarding his loan contributions and
the amount still payable by the purchaser on the loan obligation.
Details of any know special resolution to increase the company’s loan obligation.
Particulars of the insurance of the property or that it has not been insured
The documents which must accompany the contract are as follows:
A copy of the use agreement and a statement if it differs as to how it differs from other
shares in the same category if this is known by the seller.
A statement showing the share allocation per share block and the amount payable
towards the company’s loan obligation in respect of the share block.
A copy of the latest audited annual financial statements of the company and a statement
as to any material changes since they were issued if this is known by the seller or, if the
A.F.S. are not available, a statement to that effect.
If application has been or is to be made for the approval of a sectional plan, a statement
as to when and where such plan may be inspected.
20
Section 5A
Section 22
22
See 2 (b)(vi)above
21
unless it secures the vote of at least 75% of the members excluding the
developer’s votes.23
As we saw above24 the company is also prohibited from alienating or
ceding its rights to the immovable property of the scheme without a
special resolution of the members.
4.)
e)
The members have the right to appoint one director once there are less
than …. Members and two once they have 10 or more members. These
directors cannot be removed by the developers votes.25
f)
The company must insure that immovable property subject to the scheme
and the directors who knew of or could have prevented the failure will be
jointly and severally liable for damage suffered by the company or
member26.
g)
There are certain financial controls imposed by the Act with regard to the
employment of the company’s levy fund and member’s loan contributions.
These must also be banked and accounted for separately.27
h)
If a share block company wishes to convert to sectional title, special
provisions are set out in sections 8 and 8A and in the first schedule to the
Act.28
The rights of a share block owner
Most of the rights will be set out in the use agreement which are enshrined in the
articles. The contents of the use agreement, save that it must grant a right of user
of the company’s immovable property to the holder of the share block, are not
prescribed. They would usually include the following rights and restrictions on
rights:
a)
23
The right to exclusive use of the accommodation unit. But this may be
modified if the scheme is intended to allow flexible use as for example in
a time-share scheme.
Section 14(1)
See 2(b)(vi) above
25
Section 12
26
Section 19
27
Section 13 and 15.
28
Section 8(2) and (3), section 8A and schedule 1.
24
5.)
b)
A right to use the common property.
c)
The right to alienate, lease or cede rights in the member’s accommodation
unit and loan account or delegate his loan obligations.
d)
Restrictions on the right of a holder to alter his unit.
e)
Voting rights if not set out elsewhere and the holder’s rights to assets upon
a winding-up.
The obligations of a share block owner
The main obligations will be payment of the member’s levy and loan allocation
and to attend to the interior maintenance of the unit. But in a flexible system, for
example a time-share scheme, this latter obligation will usually be undertaken by
the company.
6.)
The advantages and disadvantages of share block compared with sectional
title schemes
a)
A sectional title scheme offers the purchaser exclusive ownership of the
section and co-ownership of the common property. The share block offers
only a personal right against the company to the use and enjoyment of the
property.
b)
In a sectional title scheme the developer must initially own the land. In a
share block scheme he merely has to arrange for the company to acquire a
lease or ownership of the land
c)
A share block scheme is much quicker and simpler to launch. There is no
need for sectional and block plans to be prepared or for local authority
approval (other than that normally required for a development of property)
or for the approval of the Surveyor General or for registration of the
sectional plan. The developer can begin selling units as soon as the share
block company is incorporated.
d)
A share block scheme has the added advantage of being converted fairly
simply into a sectional title scheme. The reverse would be more complex
e)
You will see from the next lecture (on time-sharing) that both a sectional
title and a share block scheme can be utilized as the basic legal structure
for the operation of a time-share scheme.
TIME SHARE
Recommended reading
sharing
1.
:
Sectional Titles Share Blocks and TimeVan der Merwe and Butler
South African Property Practice and The
Law Chapter 10 Delport
Silerberg and Schoeman’s The Law of
Property Kleyn and Boraine 3rd Ed Chapter
16.
Butterworths.
Introduction to the Law of Property AJ van
der Walt and G J Pienaar 2nd Ed Chapter 6.
Juta
The essence of a time-share scheme
Time-sharing has been around for some time now and considerably longer than
the Property Time-Sharing Control Act of 1983. It is just another means devised
by the business world of providing a commodity which can be shared by many
users at affordable rates for short periods of time. The whole of the property may
be shared on a consecutive time basis, for example, X has the exclusive use of a
house for the first quarter of the year; or the exclusive use right may relate to only
a portion of the property for a certain period together with a shared right to the
non-exclusive portions for the same period. Time-sharing schemes are not
necessarily recurrent or annual or restricted to immovable property. The idea
could, for example, be used to share such facilities as computers and yachts for
once only periods or for periods recurring at intervals of two years or more. The
point is that the idea is a creature of commerce and not the law.
The most common form of time-sharing is the scheme in which the holder of the
time-sharing right is granted the use and enjoyment of a certain piece of
immovable property, normally a flat or apartment in a holiday complex, for a
certain period each year. Some of these schemes are far more flexible and will
allow a time-sharing owner to holiday once a year at destinations all over the
world.
2.
The elements of a time-sharing scheme
The components are:
a)
The promoter of the scheme
He is the person who initiates the scheme. His motive is usually to make a
profit by selling the rights to the use of the property concerned to members
of the public.
b)
The property to be used
The promoter has a number of options. He may initially own a complex
himself which is ready to use or he may buy land and erect the building and
then, depending upon the legal basis of the scheme29, sell units to the public
or sell or lease the complex to a company or club. The property may
already be the property of the members of a sectional title scheme or of a
company in a share block scheme and the scheme is adapted from that base.
c)
The legal structure or base upon which the scheme is founded
Such structures fall into two categories which are further categorized. The
two main categories are schemes wherein the right of use and enjoyment
flows from ownership of the property and those where this right is a
personal right against the owner of the property or a real right less than
ownership30
i) Ownership based schemes
aa)
Common law co-ownership of the property
If four people buy a house at the coast and agree that each shall
have the exclusive use of the house for a quarter of the year this is
a time-sharing scheme based upon their co-ownership of the house.
This is different from the situation where several co-owners each
have a concurrent exclusive right to the use of separate portions of
the property and a shared right to the use of the common property.
Here there is no separation of common and exclusive ownership.
The whole property is used exclusively but consecutively. As the
parties are not sharing the accommodation at the same time there is
less need for rules and regulations concerning their conduct.
29
See next section
You will remember that a lessee in occupation has a real right. See below – Schemes based upon
lease
30
The owners would have to waive their rights to a partition31 for the
duration of the scheme and they would also have to agree that
noco-owner could dispose of his undivided share without binding
his successor to the waiver and the time-sharing agreement and a
similar restriction on alienation.
A variation of this scheme might entail a small number of persons
sharing accommodation concurrently where this can be done
conveniently for example in a small block of flats or a large house.
The bigger the group however, the more difficult it is to control the
scheme for the benefit of all.
What is often categorized as a club scheme could also be operated
on the basis of co-ownership. All the members of the club or
association would be o-owners of the whole property and they
would all agree inter se to pool their use rights and to allocate the
exclusive use of portions of the property to individual members on
a periodic basis with the right to use the common property tied to
the same period. The scheme would also have to provide by
agreement for the termination and or transfer of membership.
Shared obligations in relation to the maintenance of the property
and the administration of the scheme would be a necessary feature
of any of the above schemes. The members as owners of the
property would also share any liability arising from the operation
of the scheme.
bb) Co-ownership of a sectional title unit.
A sectional title unit would be co-owned by all the users of that
unit for the year. This might involve something like 50 timesharing units of a week each or 25 of 2 weeks each. Each holder of
a unit would be a co-owner of the apartment.
There would have to be exclusive use agreements entered into by
all of the co-owners of the section giving them exclusive use for
31
Where property is co-owned the owners have a right to demand a partition or division of the
property between them. Some property is not, however, physically divisible; for example, a house.
Some property is also not divisible according to the laws of the land; for example, agricultural land
in terms of section 3 of the Subdivision of Agricultural Land Act 70 of 1970. In these
circumstances the demand can be for a sale of the property and a sharing of the proceeds.
their time period only and the agreements would also have to limit
their rights to use the common property to these periods.
The same requirements as above with regard to waiver of rights to
a partition of the unit and binding successors to the scheme and the
waiver would have to be met. This would probably be easier to
control through the medium of the corporate body and its rules.
There is already a restriction on sectional title owners in relation to
alienation of their units and this could be adapted to meet these
additional requirements.
ii) Schemes where the time-sharers are not co-owners of the property.
aa)
The share block scheme
This is merely an adaptation of a share block scheme. Instead of
the share holder having an exclusive right to an accommodation
unit and shared ownership of the common property for the duration
of the scheme he will have these rights intermittently usually for a
week or two once a year. These rights will be built into the use
agreement incorporated in the articles.
bb) The club scheme
This will differ from the club scheme mentioned in (i)(aa) above in that
the club or trustees32 will be the owner of the property33. The members
would all contribute subscriptions or entrance fees to the club which
would pay for its acquisition of the property. Their rights would be
determined by agreement between themselves and the club.
32
See next paragraph.
The word ‘company’ is not defined in the Share-Blocks Control Act. But assuming it means a
company registered in terms of the Companies Act then any such company which operates a timeshare scheme will necessarily be a share-block company in terms of the definitions of ‘share’,
‘share block company’ and ‘share block scheme’ in that Act. The club we are looking at, therefore,
if it is not a registered company, could only have corporate personality under the common law.
This would mean that it could not be a club which carried on business for the gain of itself or its
members in terms of Section 31 of the Companies Act. Is the operation of a share-block scheme for
members carrying on business for gain? If the answer is “yes” there can be no such club based
scheme.
33
The club scheme might be further varied by the creation of a trust. The
club would transfer the ownership of the property to trustees who would
administer it on behalf of the club. The use agreements would then be
between the members and the trustees. The club might remain as the
ultimate beneficiary of the trust property with the members having rights
against the assets upon termination.
A trust might also precede a club or association. The promoter could
transfer the property he owns to a trust or transfer capital to a trust for
the purchase of property. Independent trustees would be appointed to
administer the scheme on behalf of unnamed beneficiaries who would
have an intermittent right to the use and enjoyment of the property once
they had paid for their share and an ultimate right to a share of the trust
assets upon termination of the trust. It could be argued that a club or
association would be formed automatically by virtue of the fact that the
beneficiaries would be associated through their common rights and
obligations with regard to the use and ultimate ownership of the
property.
cc)
The lease scheme
The idea here is for the initiator of the scheme to either own the
property or have a long lease of it. He would in turn lease portions
of the property, for example, apartments, to individual lessees on a
long term but intermittent basis, for example, H hires for the first
week in June every year for twenty years.
The agreement would be a lease in the true sense of the word. The
lessor would be responsible for providing the undisturbed use and
enjoyment and all maintenance and the lessee for rental and proper
care during his user and prompt restoration of the property in fit
condition upon termination of each lease period. There would also
have to be special terms relative to conduct and use of the common
property as there would with any lease of apartments in a complex.
d)
The time-sharing owners.
The time-sharing holders finance the scheme by purchasing the shares and
by contributing to the company’s loan obligation, it is a share block
scheme, and by paying into a maintenance levy.
The interests of the members are protected by the legislation applicable to
the scheme. If it is a share block or sectional title scheme the respective
controls are built into the two Acts. If it is any other type of scheme and
the Property Time-Sharing Control Act34 applies to it then special controls
are provided by the Act.
NB. If it could be argued that the time-sharing holders associated in a
non-corporate scheme constituted an “association” for the purposes of
section 30 of the Companies Act 1973, they would nonetheless not be hit
by the section as they would not be associated for the purpose of carrying
on business.
3.)
Act
The purpose behind the introduction of the Property Time-Sharing Control
75 of 1983
The main purpose of the Act is to control time-sharing schemes for the protection
of the consumer. The Act attempts to achieve this aim directly and through
Regulations published under the Act in Government Notice R327 of 24th February
1984. There are also sanctions for non-compliance. This aim is achieved by the
following provisions:
a)
Time-sharing schemes are broadly targeted by the Act.
Certain definitions are relevant:
“1
Definitions
‘property time-sharing scheme’ means :-
34
35
aa)
Any scheme, arrangement or undertaking in terms of which
time-sharing interests are offered for alienation or are
alienated35 and the utilization of such interests is regulated
and controlled, whether such scheme arrangement or
undertaking is operated pursuant to a share block scheme,
any scheme under which time-sharing interests connected
with rights to membership of or participation in any club
are granted, any time-sharing development scheme based
on the alienation of undivided shares in a unit as defined in
section 1 of the Sectional titles Act, 1971 (Act 66 of 1971),
or otherwise; or
bb)
Any scheme, arrangement or undertaking declared a
See below
The italics are my own
property time-sharing scheme by the Minister by notice in
the Gazette for the purposes of this act, in terms of which
interests in the use or occupation of immovable property, or
any portion or part thereof, defined in the notice, are sold or
leased;
[It is submitted that the words after ‘controlled’ are merely
examples of the wide definition which precedes them.]
‘alienate’, in relation to a time-sharing interest, means sell or let
for utilization over a prescribed period of at least three years,
whether such sale or lease is subject to a suspensive or resolutive
condition; and ‘alienation’ has a corresponding meaning.
‘time-sharing interest’, in relation to a property time-sharing
scheme, means any right to or interest in the exclusive use or
occupation, during determined or determinable periods during any
year, of accommodation.
It seems arguable that a small group of people who buy a house for the
purpose of sharing its use on a periodic basis are not ‘alienating’ any
interests and therefore would not be hit by the Act. Similarly if club
members buy property as a club and agree between them as to how it is to
be shared there does not seem to be an alienation as between the members.
On the other hand where the club as a corporate body alienates it’s sharing
interests to its members the Act will clearly apply.36 So will the Act apply
when the club members acquire their interests from trustees who are the
owners of the property.
Where a lease underpins the scheme the Act will apply because “alienate”
includes to let for three years or longer.
b)
Written contract containing prescribed information
A written contract signed by the parties or their agents authorised in
writing is again required and the choice of language is with the
purchaser.37 Failure to comply results in the contract being void with
similar consequences to those set out in the Alienation of Land Act. 38 The
36
But see footnote 48 above
Section 2(1) and 3
38
Section 9(2)
37
contract must contain a long list of specified information39 designed to
place the purchaser in possession of all the information he needs in order
to assess the true value of what he is buying and any risks involved.
Failure to include this information will afford the purchaser certain relief40
if he can prove prejudice and if proceedings are instituted in a court
having jurisdiction41 within two years from the date of the contract. The
relief a court may grant includes :
i)
A reduction in the interest rate payable
ii)
Rectification of the contract
iii)
A declaration that the contract is void
iv)
Any alternative relief the court may deem fit
An omission pointed out by Van der Merwe and Butler42 is that the seller
is not required to give the purchaser a copy of the contract.
c)
Invalidity of certain clauses and amelioration of forfeiture clause.
The Act43 invalidates certain clauses which a seller may include in the
contract. These are :
i) any provision which deems the seller’s agent to be the purchaser’s
agent.
ii) any provision exempting the seller from liability for his agent’s acts,
representations or omissions.
iii) Any clause removing or restricting the seller’s liability under his
warranty against eviction.
iv) Any clause whereby the purchaser binds himself in advance to agree to
the seller delegating his duties
39
Section 4(1)
Section 8(1)
41
Section 8(2)
42
Sectional Titles, Share Blocks and Time-sharing 507-508
43
Section 5(1)
40
It also provides44 much the same stipulation as appears in section 17(2) of
the Share Blocks Control Act with regard to the application of the
Conventional Penalties Act to forfeiture clauses.
d)
Prescribed contents for time-sharing advertisements
An advertisement for the sale of a time-sharing unit must include
information as to the name and location of the scheme, the nature of the
accommodation unit, the legal base for the scheme, the duration of the
time-sharing and when it will be ready for occupation.45 The section
creates an offence carrying a penalty of a fine of R1000 or imprisonment
for a year or both.
e)
Restrictions on receipt of consideration
Section 7 provides much the same restriction as applies in section 26 of
the Alienation of Land Act but here the condition precedent is the
furnishing of an architect’s certificate to the purchaser. This certifies that
the completed accommodation complies substantially with the relevant
building plans, town planning scheme and local authority by-laws, and is
“sufficiently complete for the purposes of utilization”. A contravention of
the section is an offence and carries the same penalty as in paragraph (c)
above.
f)
Documents which must be available at place of sale
The developer46 must have certain documents and information available at
the place where the time-shares are being sold.47
There is a long list of the information required, much of it will be repeated
in the contract. The documents include plans and a copy of any
management agreement48. Failure to comply would also open the door to
the relief set out in 3(a) above.
g)
Restrictions on hybrid schemes
The sale of time-sharing interests unless all the accommodation units of
the property subject to the scheme are in the same scheme is prohibited.49
44
Section 5(2)
Section 6 of the Act as read with Regulation 3.
46
This person is not defined in the Act but is defined in Regulation 1 and basically means the
promoter selling time-shares in his own scheme or his agent.
47
Regulation 4
48
See 4(b)(ii)(aa) below
49
Regulation 5(a)
45
Thus it would not be possible to have time-sharing holders occupying
certain apartments in the complex and tenants occupying the other
apartments other than in terms of a lease arising out of a time-sharing
interest.
Some protection is also afforded to owners in a sectional title scheme and
share-holders scheme against their will. 75% of owners or shareholders,
as the case may be, would be required to give their written approval of
such a change before it could be effected.50
NB. Where a time-sharing scheme is operated under a share block scheme, many
of the requirements of the Property Time-Sharing Control Act are already
required by the Share Blocks Control Act. Section 10 of the former Act excepts
the duplicating provisions of that Act in relation to time-sharing schemes based
upon share block schemes.
1.)
Management of the scheme
a)
Share block and sectional title based schemes
Where a time-sharing scheme is operated on the structure of a share block
or sectional title scheme then there is a management structure already in
existence in terms of those Acts. No management rules are therefore
prescribed for these schemes.
b)
Other schemes
i)
Where the Act applies
We have already seen that the Act will apply to leasing schemes
and to club schemes when the club or trustees own the assets.
ii)
How it applies
aa) Appointment of managing agent by developer
Before selling any time-sharing interest a developer51 is
required to appoint a managing agent. This person must be
appointed in a written contract in which his fee is specified.
He may be removed by majority vote of those having interests
50
51
Regulation 5(b)
See footnote 61 above
in time ‘modules’52 in the scheme. Until a management
association is in place the manageing agent is responsible to the
developer. Thereafter he is responsible to the management
association who might terminate his services or retain them.53
bb) Establishment of management association
Rather like the creation of the corporate body in the sectional
title scheme this association is an automatic creation which
takes place as soon as a person other than the developer
acquires a time-sharing interest in the scheme. While the
association does have power to sue for levy contributions it
does not appear to be a corporate body in the true sense. It
does however have specific powers and duties set out in the
regulations which relate generally to the efficient operation of
the scheme. Each holder of an interest in the scheme will have
a vote. Until he has sold half of the time-sharing modules the
developer will in effect be able to control the managing agent
through the management association.
EXCURSUS
For an interesting case where the purchaser was entitled to opt
out of the contract on the grounds of reasonable mistake have a
look at Goldberg and Another v Carstens 1997 (2) SA 854 (C)
(Not examinable)
End of this section on selected property law statutes.
Notes drafted by
Dave Holness BA LLB LLM PGDHE- UKZN Law Lecturer (Attorney).
September 2007
52
Van der Merwe and Butler point out at page 525 and the pages which follow that the regulations
in relation to the managing agent and management association indicate “hasty draftsmanship”. It is
not clear how or if this term differs from a time-share interest.
53
Regulation 11
Juta’s Law Reports
NOTE: The point of this extract is that you should consider how the case
might have an effect on Tutorial 1 – dealing with the Garden Cities case.
October’s issue of the Advance Notification of Juta’s
SA Law Reports and SA Criminal Law Reports
touches on a case that deals with that enemy of
economic freedom (Barkhuizen v Napier), the massproduced commercial contract. In Barkhuizen the
Constitutional Court finds, in dealing with a timelimitation clause in an insurance contract, that the
hitherto sacrosanct doctrine of pacta sunt servanda
must yield to inherently nebulous public policy notions
of fairness, justice and reasonableness, as duly
underpinned by the Constitution. Barkhuizen will have
a marked impact on SA commercial law, which is
postulated on at least the supposition of contractual
autonomy. Heady stuff indeed. See Barkhuizen v
Napier 2007 (5) SA 323 (CC).
– Read more
From Legalbrief 1 October 2007
NOTE: The point of this extract is to draw a comparison between PIE in
South African and English Law.
JA Pye (Oxford) Ltd and Another v United
Kingdom (Application No 44302/02): Provisions of
English law allowing squatters to obtain after 12 years
of adverse possession the right to title of the land,
without liability to compensation, was not an intrusion
into the applicant companies’ rights to the ownership
of their property – the Grand Chamber of the
European Court of Human Rights held, by 10 votes to
7, overturning a four-three judgment of a Chamber
that the squatters had not violated the applicants’ right
to peaceful enjoyment of their possessions as
guaranteed by article 1 of Protocol No 1 to the
European Convention on Human Rights.
-- The Times
From Legalbrief 1 October 2007
The transition to ownership: Passing of risk and profit in the res vendita
~
Generally, the owner bears the loss if a thing is damaged without the fault of
another.
~
But where the property is sold, the rule is that the risk passes on conclusion of the
agreement – even if delivery has not yet taken place.
~
The issue risk will not apply where there is supervening impossibility of
performance.
~
Benefits or profits in the res vendita follow the risk; unless the benefit is personal
to the seller.
Van Deventer v Erasmus
1960 TPD
Qualifications to the rule on passing of risk:
~
If the seller is late delivering the res, he bears the risk during the delay unless
damage wd have occurred anyway.
~
The risk only passes when the sale is perfecta:
~
~
~
The price must be fixed (not just ascertainable);
The subject matter must be fixed (not just ascertainable)
Poppe, Schunhoof & Guttery v Mosenthal 1879 Buch.
Taylor & Co v Mackie, Dunn & Co
1879 Buch.
Any suspensive condition to which the sale is subject must have been fulfilled.
~
~
~
Note that an agreement to take delivery is highly unlikely to be a
suspensive condition.
Note that once a suspensive condition is fulfilled, the risk becomes the
purchaser’s from the sale date.
De Wet v Zeeman
1989 NPD
Note that parties may vary the incidence of risk by agreement, and this is
common practice to protect the purchaser.