Why do I need a title deed when I already have an agreement of sale?
- Introduction
“The authorities are clear that the signing of an agreement does not automatically translate to the transfer of property ……..”
Van Brooker v Mudhanda & Another AND Pierce v Mudhanda & Another SC 5/18
Most people make a general assumption that once they conclude an agreement of sale of land/property, they would have obtained title to the property/land in question. In effect, they believe they will legally be the owners. There are many cases involving people who buy land/property, conclude an agreement of sale and that seller dies or sells to a third party, before transfer. If an agreement of sale is the only thing that was concluded before the seller died, then that property will remain in the estate of the deceased and the buyer becomes a creditor of the estate. The buyer will have to lodge their claim with the master, which may be accepted or declined. This is just but an example in which the question of whether or not an agreement of sale is proof of ownership of land arises.
An agreement of sale is a contract between the seller and the buyer which creates enforceable rights but does not transfer ownership. It creates personal rights. It cannot be enforced against anyone else with whom the buyer did not contract with. Relating it to our example of a seller who dies before transfer, the agreement can only be enforced against the deceased person’s estate and not any surviving relative or spouse.
- What is Ownership?
Ownership is the most comprehensive real right a person can have over a thing. A real right in a property gives a person the right to use, acquire, enjoy and dispose a property to the exclusion of others. In terms of the Deeds Registries Act [Chapter 20:05], a real right means a right that becomes real upon registration in the Deeds office in which the land is situate. In principle, it allows one to do whatever they deem fit as the owner of a particular thing.
- How does one get title to land?
A person can only acquire real rights upon registration of title in the deeds registry office. If A is the owner of land which he sells to B, then the real right of ownership vests in A until the land has been transferred to B. The agreement of sale gives B a personal right to demand the transfer of the real right of ownership and imposes a corresponding personal obligation on A to transfer the property. When transfer takes place, B’s personal right and A’s obligation are extinguished.” (Silberberg & Schoeman, Law of Property, 3rd Edition). Section 14 of the Deeds Registries Act [Chapter 20:05] confirms this example and defines the manner in which real rights shall be transferred as follows:
“Subject to this Act or any other law:
a)The ownership of land may be conveyed from one person to another only by means of a deed of transfer executed or attested by the Registrar…..”
The registration of rights in immovable property in terms of the Deeds Registry Act is not a mere matter of form. It is a matter of substance: It conveys real right upon those in whose name the property is registered. (Goncalves v Rodrigues HH 197/03). Theoretically the act of registration is regarded as notice to the world of the ownership of the real right which is registered. That means the person in whose name a real right is registered can only prove his ownership by producing the registered deed.
- Conclusion
An agreement of sale, while an important document in the process of land/property acquisition, does not in itself constitute proof of ownership of land. Until the buyer is registered as the new owner, the agreement of sale remains a contractual obligation rather than conclusive evidence of ownership.
Disclaimer: The information and opinions contained above are for general information purposes only. They do not constitute legal opinion or other professional advice. For comprehensive legal advice, get in touch with us.
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