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The difference between a consolidation and a notarial tie-agreement with regards to immovable property

by Michelle Fiorentinos

Owners of immovable property will sometimes find it necessary or be compelled to consolidate or notarially tie their property. Understanding the difference between the two procedures and when it becomes applicable is therefore necessary.

Consolidation

A consolidation is done by way of an application, by the owner/s of the properties, for the issue of a certificate of consolidated title in terms of Section 40 of the Deeds Registries Act 47 of 1937 (hereinafter referred to as “the Act”). One of the prerequisites for the issue of such a certificate is that a diagram must be prepared of the portions of land that are to be consolidated into a single unit of land. The aforementioned diagram must be approved by the Surveyor-General. Once the diagram has been obtained by the client a Conveyancer can be instructed to assist with an application for the issue of a certificate of consolidated title at the Deeds Office.

Documents for lodgement and registration at the Deeds Office, on behalf of the client, by the Conveyancer will therefore include the application for a certificate of consolidated title; the draft certificate of consolidated title; the relevant title deeds and the approved consolidation diagram.

If one bond is registered over the properties being consolidated, the bank will have to consent to the consolidation. Should there however be different bonds, each registered over a property, the bonds will have to be cancelled and a new bond must be registered over the consolidated property.

Once the properties have been consolidated it can only be dealt with again separately if a subdivision thereof is applied for.

Notarial tie-agreement

A notarial tie of two properties on the other hand is done by way of a notarial tie-agreement under the provisions of Section 65 of the Act. A notarial tie-agreement is signed, in front of a Notary, by the relevant owner/s of the land being notarially tied and the person enforcing the tie-agreement. The enforcer could be the local authority, bank or any person or entity who would derive benefit from the properties being tied. The notarial tie-agreement is thereafter lodged and registered at the Deeds Office.

Documents for lodgement and registration at the Deeds Office, on behalf of the client, by the Notary will therefore include the notarial tie agreement and relevant title deeds.

Should there be a bond registered against any of the properties the bondholder must consent that the registration of the notarial tie-agreement is free from the bond.

A notarial tie-agreement can be cancelled by way of a bilateral notarial agreement entered into between the owners/s of the land and the enforcer in terms of Sec 68(2) of the Act or unilaterally by the enforcer in terms of Section 68(1) of the Act.

Certificate of consolidated title and tie conditions

Where properties, that are notarially tied, are being consolidated the Registrar of Deeds will on registration of the consolidation endorse the certificate of consolidated title as to the lapsing of the tie condition. The enforcer of the notarial tie-agreement will have to consent to the consolidation and the lapsing of the tie agreement.

Conclusion

To establish which procedures to follow will depend on the facts and the involvement of a qualified Conveyancer and/or Notary in whole process is therefore essential.

Written by Driske Olivier

11 October, 2012

**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.**