An onerous title deed condition that isn’t discovered in time could delay or prevent the progress of a property development – with serious cost implications. Alternatively, such an omission could be costly when buying or selling property.

Given this truism, the purpose of this article is to sensitise the reader to some pitfalls when dealing with title deeds.

The deeds registration offices had a system whereby deeds were lodged in duplicate and the Deeds Office would endorse changes of ownership, caveats, interdicts, mortgage bonds, and servitudes against the title deeds. They would keep one copy for records purposes and the other copy would be given back to the client.

It was not practice, nor prescribed in any Act, that conditions be carried forward from deed to deed. In the Deeds Registries in the former Cape Province the so-called pivot deed system had existed prior to 1937. The pivot deed system is unique to the Cape Town deeds registry.  In terms of this system, no conditions were carried forward in a title deed. The title deed conditions would simply state:

“Subject to the conditions as contained in Deed of Transfer No … [with reference to the prior
title deed]”.

When searching the above pivot deed, one would find that these deeds in turn make reference to earlier title deeds.

It is only since 1937 that title deed conditions have been carried forward in each new title deed. Thus, to determine all the possible conditions against and in favour of a property, proper research must be done and all previous title deeds must be checked, from the day when the first Government Grant or Crown Grant was issued up to 1937.

The practical way would be to employ a conveyancing attorney, skilled in these matters, to conduct the research and prepare a Conveyancer’s Certificate to certify that

* the Conveyancer did a search behind the pivot deed and
* found no onerous conditions relevant to the proposed nature of the transaction or development, etc.

Developments since the 1980s

The Deeds Registration offices introduced a micro filming system, and since then all title deeds lodged are microfilmed. In addition, a scanning system was introduced in 2007/ 2008. Thus, Deeds Office records are now kept on both microfilm and in digital format, while the original title deeds are sent back to the attorneys for delivery to the new owner or bank(s). Title deeds are endorsed with changes in ownership, mortgage bonds and all other propertyrelated transactions. This of course depends on the instruction the deeds office had received on lodgement from the conveyancing firm.

The Deeds Offices continually update their records and one can obtain a “Deeds Office printout” to view the most current information listed against the property, viz.:

• Interdicts and caveats (examples are court orders, insolvency and rehabilitation notices, sequestration orders, liquidation orders, notices from the Surveyor General’s office, and expropriation notices).

• Sectional title information, such as 

•  Exclusive use areas. 
•  Rights of further extension reserved by the developer (section 25).
•  Servitudes on common property.

• Notarial servitudes

• Mortgage bonds

It is, however, also important to note that updated information pertaining to property transactions can take, from date of registration, as long as 5-8 working days to appear on the system of the Deeds Offices. Sectional-title transactions can take up to 10 days and other transactions that involve cross-writing in title deeds filed in counter cover can take up to three weeks.

(Cross-writing is the updating of all relevant and related information in documents filed at Deeds Registration offices. The counter-cover system applies where 20 or more properties are held under one title deed, and where the client requests the Deeds Office to keep the original title deed in its records.)

Some advice

In sum, to protect one’s interests, it is a good idea to appoint a conveyancing attorney to conduct a search at the Deeds Office and peruse or verify the following information that might be applicable to the subject property:

• Conditions in the current title deed

• Conditions behind the pivot deed

• Information on the Deeds Office printouts, such as:  

•   Caveats.  
    Servitudes. 
    Interdicts.

And, lastly, if you are a developer, remember to appoint a town planner to assist with the restrictions imposed by the local authority and, if applicable, zoning requirements.

A home is usually the biggest asset a consumer will ever acquire in his or her lifetime, but the stringent implementation of the National Credit Act by financial institutions is making it more difficult for potential home owners to enter the market.

First time buyers and the self-employed are particularly affected.  Nearly 50% of employed bond applicants are declined every month, while almost 58% of self-employed applicants cannot secure home loans (source: www.ooba.co.za).

Rent2Buy, a new concept for the South African property market, gives potential buyers and property owners an alternative way to buy and sell properties.

“We negotiate agreements between potential buyers and sellers whereby the buyer concludes a rental agreement with a seller with an option to purchase the property by a certain date and at an agreed price,” explains Meyer de Waal, the founder of Rent2Buy, and a practicing attorney and conveyancing lawyer.

The seller is assured of a selling price for his property in the future, while the buyer pays rent approximately equal to the buyer’s future bond repayment.  The buyer is able to take immediate ownership of the property, and takes over the responsibility of the property, including all rates, taxes, levies and maintenance which would apply if he or she were the home owner.

“The idea is that the buyer uses the option period of the contract to prove his affordability and creditworthiness to the bank,” explains De Waal.  “This way the buyer can eventually secure a loan to purchase the property.  In addition to using the time to save for a deposit, he also shows he can afford the property and be disciplined by paying rent regularly and on time.”

De Waal adds that the three main reasons why bonds are not being granted are:
•    The absence of a deposit. Although some banks advertise that 100 percent bonds are being granted again, the success rate of these applications is low.
•    Affordability is the second reason. A bank would rather decline a loan than take the risk that the client will not be able to service the loan. This causes a major problem for self-employed applicants in particular.
•    The third reason for declining credit has to do with the applicant’s credit history. Many applicants are not aware of the banks' sophisticated credit search engines. A judgment against their name or a late payment of an account stops their application. Banks can easily trace this information.

With this in mind, Rent2Buy launched a home owner education programme designed to train and mentor bond applicants to increase their success rate of securing a home loan in association with Setsmol Training, managed by Solly Molefe.  The My Budget Fitness programme looks at improving an applicant’s credit rating and affordability, and essentially puts the applicant on the path to become financially fit for a home loan.

The programme is unique as it assigns personal [or budget] financial trainers to applicants, and uses innovative software to help home loan applicants track their progress and reach a financially fit state.  Through mentorship, education and month-by-month guidance, home loan applicants reach affordability and clear their credit record as required under the National Credit Act.

The programme is available to anyone looking to secure a home loan, and not only for customers of Rent2Buy.

“The aim of My Budget Fitness is to help home loan applicants build up and reach a financially fit state, and to remain that way once they’ve secured their bond,” says De Waal.

Solly Molefe adds that potential buyers who start with the My Budget Fitness programme 6 to 24 months before applying for a loan will enhance their ability to secure home loans through the education process. The group aims to ensure that each bond application submitted for a client with a financially fit budget is approved.

For more information visit www.irent2buy.co.za or send an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it