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Does a promise automatically translate into ownership?

by Michelle Fiorentinos

You are in a loving relationship that is going to last forever. So when your partner promises you a house, it doesn’t occur to you to insist that it be transferred into your name.

Years later, the happy relationship is no more and the house that was promised to you has been sold to someone else.

You are left thinking that your house has been sold! The (un)fortunate truth is that a promise does not translate into ownership.

A recent case illustrates this: Mr F and Ms S are in a relationship. As a gesture, Mr F promises to transfer the property she lives in into her name.

For this purpose, Mr F enters into an Agreement of Sale, where Gifprops (Ms S is the sole director and shareholder) buys the property from Zelpy, the current owner (“the first agreement”). Registration of transfer does not take place, and the Sale Agreement lapses due to non-fulfilment of a suspensive condition.

Subsequently, Mr F becomes involved with Ms R, whom he marries. Mr F enters into another agreement for the purchase of the property where Ms S still lived. He entered into this agreement (“the second agreement”) in his personal capacity and this time transfer takes place.

Mr F bequeaths the property to Ms R. Ms S approaches the court arguing that Gifprops was the owner of the property as it was always Mr F’s intention to transfer the property to it.

The court held that:

  • For ownership in immovable property to pass from one person to another, it is necessary, amongst other things, that registration of transfer by the seller, who has both the capacity and intention to pass transfer, takes place. Provided registration has taken place, non-compliance with substantive laws, will not result in the transfer not having taken place.
  • In South Africa, the validity of registration of transfer of ownership is not dependent on the underlying causa (in this case the sale agreement), provided there was an intention to pass transfer by the seller and an intention to receive transfer by the purchaser.
  • Applying the above principles, it was clear that when Mr F passed transfer in terms of the second agreement, he had every intention of doing so. He entered into the second agreement, signed the transfer documents and accepted transfer into his name. Had Mr F intended to transfer the property to Gifprops, he would have done so and would not have entered into a second agreement to transfer the property into his own name.

Ms S’s claim was accordingly dismissed.

31 October, 2014

**Please note that these comments are summarised, may not be applicable to your particular situation and do not constitute legal advice. Please consult your legal professional should you wish to obtain a formal legal opinion.**