In South Africa, every subdivision of land and section of a building that is privately owned is depicted in a diagram or general plan of the land. These diagrams and general plans are precisely measured and drawn up by land surveyors and approved by the Surveyor-General.
The details of every subdivision and section is recorded in a document called a "title deed", which is registered in one of the deeds registries in South Africa. The title deed is registered in the specific deeds registry that has jurisdiction over the area where the property is located.
Public Record
Any member of the public is entitled to inspect the title registers and other records in the deeds registry. A member of the public is allowed to obtain copies of the records and extracts from the title registers, but only qualified conveyancers and notaries public are allowed to lodge (submit for approval) title deeds or other real rights with the deeds registry.
Electronic Title Deeds
The various deeds registries in South Africa are linked via a computer network, which is also accessible to the general public. So, if you pay the prescribed fee for searching the deeds registry, you can find information on any registered immovable property in South Africa from the comfort of your home or office, by using the Internet.
Where is the Title Deed?
The owner of immovable property could have the title deed to his property in his possession, in the form of the deed of transfer. But often the mortgage bondholder holds the title deed to a property over which it has a registered mortgage, until the mortgage is fully paid.
The title deed is an important document, containing information about the property. The information contained in the title deed includes the names of the previous and existing owners of the property, a description of the property, the extent of the property, the purchase price paid by the current owner of the property, conditions and restriction for the use and sale of the property, and any limited real rights that have been registered in respect to the property.
Inspecting the Title Deed
A buyer of a property does not have to get to see the title deed before buying the property. The seller of the property has to answer the buyer's questions about the title conditions and restrictions truthfully, and as long as the new owner uses the property in the same way as the current owner, there shouldn't be any problems.
But it would be wise to inspect the title deed of a property before committing to purchasing the property if the buyer intends to make any alterations or extensions to the improvements on the property, or if the buyer intends to use it in a way other than the current use of the property.
The title deed might hold some unwelcome surprises for the buyer. So, it may be wise to include a clause in the contract of sale that allows the buyer to cancel the sale if the title deed contains conditions or restrictions that are unacceptable. But such clauses are not "standard" in widely used sale documents and offer to purchase documents in South Africa.
Title Deed Contingency Clause
Here is an example of a title deed contingency clause:
The Buyer will inspect the title deed of the Property for conditions, restrictions and servitudes registered or notarised over the property, and has the right to cancel this agreement within 7 (seven) days, at his sole discretion, if the title deed contains any rights or restrictions that the buyer deems unacceptable.
This is one of those contract clauses that sellers and real estate agents don't like. It is solely intended for the buyer's benefit and can result in the sale of a property to "fall through". So, the seller might end up still stuck with the property in 7 days' time, and the real estate agent might be out of his/her commission.
But if the real estate agent is truly protecting the interests of the buyer, this clause should actually be standard in the offer to purchase document, don't you think?
Servitude Surprise
Servitudes give persons other than the legal owner of the property real rights over the immovable property. And servitudes remain in effect after immovable property has been alienated or sold, irrespective if the buyer knew about the existence of the servitudes or not! So, inspecting the title deed can be a must in some circumstances, especially if the buyer or real estate agent has any reason to believe that there is a servitude registered over the property.
Title Deeds
It would be best to consult with a conveyancer to determine the conditions and restrictions registered against a title deed. Sometimes the meaning of stuff in the title deed can be a little hard to understand, for us ordinary folk, or often we don't know how to go about inspecting the title deed for conditions and restrictions. So, to be sure, I say leave the title deed to the conveyancer.
