Introduction
In the past I have shared with you many articles on properties including on conveyancing, capital gains tax, due diligence on properties before purchase, fraud involving property transfers and deeds, agreements of sale, funding to acquire properties and many other issues.
Many times, for reasons I really appreciate, I have been asked by clients and readers for advice on whether some uncompleted transfers of properties can be skipped in the event that the property was eventually sold. In some situations, which are quite common, I have been asked to comment on what happens in the event that a beneficiary of a deceased estate, for example a spouse, dies before the estate of the spouse who died first (pre-deceased spouse) is finalised. In this article I look at the Deeds Registries Act (Chapter 20:05) or “Deeds Registries Act” as it applies to such situations.
Deeds Registries Act (Chapter 20:05)
This is an important Act which provides for the establishment of a deeds registries and for the appointment of registrars of, deeds and to make further and different provision, for the registration of deeds and conventional hypothecations, and to make provision for other maters incidental thereto.
Deeds to follow sequence of their relative causes
According to section 11(1)(a) of the Deeds Registries Act, save (except) as otherwise provided for in this Act or as directed by court, transfers of land and cession of real rights therein shall follow the sequence of the successive transactions in pursuance of which they are made, and if made in pursuance of testamentary disposition or intestate succession they shall follow the sequence in which the right to ownership or other real right in the land accrued to the persons successively becoming vested with such right.
The above provision is quite long and possibly confusing to a lay person. I will try to break it down for you.
General sequence of transfers and cession of real rights
According to the above provision in section 11(1)(a) of the Deeds Registries Act, transfers and cession of real rights in properties ought to be registered in the sequential order in which the successive transactions are made. In other words, effect should be given to transfers or cession of rights following the sequential order the transactions took place. In between transactions should not be skipped.
I will give you a hypothetical example. A is the registered owner of a property X held under a Deed of Transfer. He sells it to B. Before transfer from A to B, B experiences serious financial problems and sells the property to C. C may ask for a direct transfer from A to C. According to the law explained above, transfer has to be done from A to B and then from B to C.
According to the same provision, section 11(1)(a), transfer of land or cession of real rights therein in terms of estate administration, described as testamentary disposition (through a will) or intestate succession (where there is no will), such transfers or cessions shall follow the sequence in which the right to ownership or other real right in the land accrued to the persons successively becoming vested with such right.
I will give you a simplified hypothetical example. Mr A dies before (pre-deceases) his wife Mrs A. Through a will Mrs A is to benefit solely from the property owned by Mr A. Before completion of Mr A’s estate Mrs A sadly passes on.
In the above situation, section 11(1)(a) requires that the estate of Mr. A be finalized first, the property be passed on to Mrs A’s estate and then beneficiaries of Mrs A’s estate can benefit from the property.
Unlawful
According to section 11(1)(b) it shall be unlawful to depart from any such sequence in recording in any deeds registry any change in the ownership in such land or of such real right unless the registrar is satisfied that the circumstances are exceptional and has consented to such departure.
Exceptions
Section 11(1) above has some exceptions to the general requirement to follow the sequence of the transactions.
Payment of stamp duty, estate duty and other duties
According to section 11(2) of the Deeds Registries Act, prior to the registration of any transfer or cession in terms of section 11(1)(b) of and the provisos to section 11(1), there shall be paid the stamp duty, estate duty and any other such duty which would have been payable had the land been transferred or the real rights been ceded to each person successively becoming entitled thereto.
Conclusion
It is important to understand that that transfers of properties or cession of real rights therein have to be registered in terms of the sequential order of transactions giving rise to those transactions. Conveyancers may take advantage of what is known as simultaneous registration of outstanding transfers of the same properties, where for example outstanding transfers from A to B and from B to C are lodged and effected at the same time in the Deeds Registry.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deals and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He writes in his personal capacity. He can be contacted on +263 772 246 900 or ghofisi@hofisilaw.com or gohofisi@gmail.com. Visit www//:hofisilaw.com for more articles. He writes weekly articles in the newspaper since 2020.
