Transfer of Immovable Property in South Africa

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Table of Contents

Introduction
Evaluative Analysis
Applicants
Similar Cases
Ownership Transfer Problem
Mortgage Bond Problem
Potential Outcomes
Conclusion
Reference List

Introduction

The transfer of ownership is one of the most ambiguous aspects of the law discipline. From this perspective, it is essential to note that most of the juridical decisions are carried out with due regard to the statements of the Roman-Dutch common law that still represents the basic guideline for the decision-making process in the law field.

Thus, for instance, Zimmermann and Visser (1996) point out that the principles of the Roman-Dutch law are still applied by South African judges in the course of considering the cases related to the transfer of ownership despite the expectations that they should have long ago “disappeared from the legal practice of South Africa” (p. 738). As a result, several references will be made to the relevant statements of the Roman-Dutch law in the presented analysis.

The paper at hand is aimed at analyzing Case #: 220082/2013 that is devoted to the consideration of the issue related to the transfer of immovable property. The analysis of the case is performed based on the data provided by the acting judge of the High Court of South Africa, Chonan, and relevant scholarly literature.

Evaluative Analysis

Problem Statement

The key problem considered by the judge resides in the ownership transfer in which a series of parties were necessarily involved. Thus, the first applicant was initially the legal owner of the immovable property. In 2009, this applicant made a series of agreements with the second party. As a result, the property was transferred to the latter that officially registered it under his name.

The second party procured a bank loan and registered a mortgage bond in the bank’s favor. Later on, the obligations were not fulfilled, and the bank placed an order for the execution of the immovable property. In the meantime, the first applicant claimed about the ignorance of the ownership transfer to the second party and placed an order for rescinding the agreement.

From this perspective, it is essential to note that the transfer of ownership in the two cases (from the first applicant to the second party and from the second party to the bank) was carried out on a legal basis by the statement of the Roman-Dutch common law. Thus, the signed papers serve to be the evidence of the fact that all the parties had both the “animus transferred” and the “accipiendi Domini” while participating in the transfer procedure (Sonnekus, 2013).

Applicants

Although there are eight involved parties, the three key applicants are the initial owner of the immovable property, the second party, Kabini, and the bank. The first applicant is the current resident of the immovable property under question. Before making the agreements with the second party, the first applicant had five mortgage bonds associated with this property. In 2009, when the applicant began experiencing financial difficulties, he applied for another bank loan; however, his application was refused. As a result, the applicant was obliged to search for alternative solutions in order to cover the mortgage obligations.

At this point, the second party, Kabini appeared as a representative of Brusson Finance Limited. It is essential to take into account the fact that the first and the second parties would not meet in person – the first applicant signed an agreement with Brusson to receive the essential financial support. According to the agreement’s conditions, the property was supposed to be the security guarantee, whereas the first party knew nothing of Brusson’s plans to transfer the ownership to their representative, Kabini.

As soon as the latter registered the ownership he addressed the third party, the bank, in order to receive a loan. As a result, the mortgage agreement was signed in favor of the bank, and when Kabini stopped fulfilling his obligations, the bank made a demand for the property’s execution.

It is critical to point out the fact that the claims of both the first applicant and the bank are equally justified. Thus, from the legal perspectives, both parties have a right to lay claim to the property as long as they participated in Brusson’s scheme without being aware of all the implications.

Similar Cases

The case under analysis provides a brief overview of similar incidents. Broadly speaking, in most of the relevant cases, the judgment is delivered in favor of the first applicant. In other words, judges would announce the agreement concerning the transfer of ownership unlawful and invalid if the initial owners claimed that they had no intention to sell their property to the second party.

As a consequence, it is reasonable to assume that the judge considering this case relies significantly on the previous precedents, and the character of his final decision is largely determined by the outcomes of the similar incidents, where the judges admitted the illegality of the relevant agreements.

Ownership Transfer Problem

The key problem of this case resides in the applicant’s claim that he had no intention to sell the property to the second party. Moreover, the name of the second party, Kabini, did not initially figure in the agreement that the first applicant signed together with Brusson.

On the face of it, the absence of the intention to transfer ownership is a valid ground for rescinding the agreement. In the meantime, the judge Choanan points out a series of ambiguous aspects related to the instance. Thus, according to Choanan, the applicants could not have avoided signing the transfer documents that enabled the Registrar of Deeds to register their property into the name of the second party, Kabini. Otherwise, the agreement would not have been signed as the company would not receive the relevant guarantees (CASE NO: 220082/2013, 2013). Therefore, even though the first applicant might not have had a desire to sell his property, he still signed the relevant document voluntarily.

Moreover, the judge notes that there are some critical gaps in the available data. Hence, for instance, he points out the absence of the information on the applicants continuing the tax payment for their property after the agreements made between the Brusson and Kabini. The judge assumes that this information could be critical for the instance’s analysis (CASE NO: 220082/2013, 2013).

Mortgage Bond Problem

The key aim of the first applicant is to regain the legal standing of the immovable property. Meanwhile, in case the demand is fulfilled by the juridical decision, the question arises whether any party is to repay the mortgage obligations to the bank. There is one critical aspect that needs to be elucidated in this framework. Thus, according to the Roman-German law, the purchaser of the property essentially obtains the associated risks (Seymour, 2008). Therefore, the first applicant receives all the obligations related to the property along with receiving the legal standing to it.

By this logic, the second party, Kabini, became legally responsible for the five mortgage bonds that the initial owners held to the bank as soon as he registered the property into his name.

Potential Outcomes

First and foremost, the judge insists on the rescission of the agreement between the first applicant and Kabini that was carried out contrary to law – the former was not even aware of the role of the latter. Secondly, the standing to the immovable property will be retained by the first applicant as long as the lack of the intention to sell the property is proved.

Finally, according to the judge, the mortgage obligations to the bank should not be transmitted to the first applicant as he did not take part in agreeing. However, it might be expected that the bank will want to impeach a judgment. In this case, there is a strong possibility that the court will deliver a judgment in the bank’s favor as the property’s owner receives the related risks by the Roman-Dutch system (Sonnekus, 2013).

Conclusion

The analysis of the case under discussion illustrates that the problem of the transfer of ownership implies a series of related issues. Thus, the key question resides in determining the parties responsible for the previously entered agreement. As it might be seen from the example, it is not always clear whether the owner of the immovable property is obliged to repay any mortgage obligations in case his or her ownership rights were transferred with the help of a fraud. From this perspective, even though the Roman-Dutch system serves to be a consistent guideline, it is unable to elucidate all the possible causes.

Reference List

CASE NO: 220082/2013. (2013). Web.

Seymour, A. (2008). The passing of risk in contracts for sale in Roman law and Australian law: a comparative perspective. Web.

Sonnekus, J.C. (2013). The fundamental differences in the principles governing property law and succession. Web.

Zimmermann, R., & Visser, D.P. (1996). Southern Cross: Civil Law and Common Law in South Africa. New York, New York: Clarendon Press.

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