National Treasury Budget: briefing by Director General and Minister

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Finance Standing Committee

22 May 2005
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Meeting report

AGRICULTURE AND LAND AFFAIRS PORTFOLIO COMMITTEE
23 May 2006
DEEDS REGISTRIES AMENDMENT BILL: BRIEFINGS

Chairperson:

Ms D G Nhlengethwa (ANC)

Documents handed out:

Deeds Registries Amendment Bill

SUMMARY
The Committee was briefed on the Deeds Registries Amendment Bill, 2006. The Bill aims to provide for the continued registration of rights, which had been acquired in terms of the Black Administration Act, 1927. The latter Act is being repealed with effect 31 July and if the Amendment Bill did not provide for a transitional arrangement to register existing rights, transactions involving such rights would not be registrable on 1 August.

Members were mostly concerned about the effects of the Bill on communal land rights. They were assured that the Bill would have no effect on communal land.

MINUTES
Department of Land Affairs presentation

Mr Colin Brocker, a legal specialist in the Department of Land Affairs, said that the principal source of land registration is the Deeds Registries Act of 1937. The proclamations of the Black Administration Act created certain rights, including two important pieces of subordinate legislation, which included proclamation R293 and R188. The latter two created certain rights to be granted to black people and a system for the granting of those rights and a system of registration of those rights. The repeal of certain remaining provisions of the Black Administration Act is to occur on 31 July 2006. This includes the repeal of the principle act and the subordinate legislation. The Registrar will not be able after 31 July to continue to register transactions that emanate from rights that have already been granted under the subordinate legislation and will not be able to authorise further rights under those proclamations to be granted.

Existing rights in terms of the old Act will seriously be affected if registration cannot be affected after 31 July 2006. Two examples of such consequences were given: such as where a person had registered a deed of grant. If such person is to die during August the subsequent transfer of that right to that person’s heir will not be able to be registered with the Deeds Office without this Bill. Therefore there is a potential prejudice to the holders of existing rights and security of tenure will be affected.

The first Clause of the Amendment Bill amends Section 3 of the Deeds Registries Act. This Section lists the registration duties, and seeks to include paragraph the following section: "p(bis) despite the appeal of regulations and proclamations made under Section 25 (1) , 30 (2) and 30 A (1) of the Black Administration Act by the repeal of the Amendment of Black Administration Act and Amendment of Certain Laws Act 2005". In terms of this, the Registrar must continue to register any registrable transactions concerning a right originally acquired under the Black Administration Act. In terms of subparagraph two the Registrar must continue to exercise all other powers and perform all the other duties vested in or imposed upon a Chief Commissioner or registration officer in terms of the Black Administration Act.

Paragraph p(bis) refers to the Chief Commissioner and regulation officer. This had been included because the subordinate legislation referred to had created a registration system. The old system referred to these two officials and this would allow people to enjoy their rights until their rights are upgraded to freehold title. The purpose of this bill is to allow people to continue to enjoy the benefits of the rights already granted to them until those rights are upgraded into freehold title.

The second Clause did precisely the same thing to Section 16 of the Act. Section 16 prescribes how real rights are transferred. It is substantially the same in terms of content to Clause 1. Clause 2 of the Amendment Bill proposes a new Section 16D to be inserted. Despite the repeal it provides that rights that have originally been acquired under the Black Administration Act shall be transferred in accordance with the legislation which created that right. It was stressed that a new registration system was not being created. The Registrar of Deeds would be allowed to register transactions relating to existing granted rights. This is in essence what the Bill seeks to achieve.

Discussion
Mr S Abraham (ANC) asked whether the proposed legislation aimed to fulfil a certain gap and what the foreseeable and unintended consequences would be.

Mr Brocker replied that the Bill was a transitional measure to breach a gap between rights which exist today in terms of rights granted historically. These were second class rights and government’s intention is to upgrade the rights. The old PTO (permission to occupy) for instance will be extinguished. The right holder of these rights will eventually become freehold owners when these rights are fully upgraded. The old subordinate legislation recognised deeds of grants, leaseholds and permissions to occupy. These will all disappear and the right holders of these will eventually become full freehold title owners in terms of the Deeds Registries Act. Therefore it is a transitional measure from 31 July until such time that in each case the particular right is upgraded to full title. When this occurs this measure will no longer be applicable.

Mr Brocker added that when legislation is repealed there are always consequences. One of the undesirable consequences in this case is if the department did not do anything, a gap would have been created and people with existing rights would have been left behind and the Deeds Registries Act would no longer be able to deal with their rights. The Department spent three months interrogating the consequences of the repeal. The Department has submitted a substantial report, which outlines the research on this matter to the Portfolio Committee on Justice and Constitutional Development and copies to the secretariat of the Select Committee on Land Affairs. It had been fully supported by the latter and was confirmed to have met government’s constitutional duties. Every consequence of the repeal of the Black Administration Act is fully supported by the department. In the opinion of the department, it is fully constitutional and meets government’s constitutional obligations, except for the current instance when the Black Administration Act was repealed. Therefore this was the only Bill which was needed to fill the gap in the Black Administration Act.

Ms R Ntuli (ANC) questioned how the Bill was going to affect people on communal land.

Mr Brocker said Proclamation R293 related to townships, and Proclamation R188 included permission to occupy that was principally related to rural land. The Communal Land Rights Act (CLRA) provides for a mechanism where government is able to go into rural areas and communal land areas and assess the situation on ground to determine what rights had been granted. A Land Rights Inquirer is to be appointed by the Minister. This will be a team of people who will determine who has been given PTO on what land etc. Therefore this is an interrogation process. This was meant to unscramble the "old apartheid egg" to come up with a well planned design on what can be done with people on a particular piece of communal land.

Mr Brocker added that the Minister would make a determination to give legal status to the design that has evolved from the process. If the individual has a PTO on a piece of communal land, the CLRA provides 3 scenarios. Either the right can be confirmed, converted into full ownership or converted into a Deed of Communal Land Right. Therefore it will either be a full title in individualised land or converted to a members’ right. The Communal Land Rights Act provides that a right may be cancelled with a court order or a holder of rights’ consent. The Minister does not have any discretion here. With a PTO it is likely to either be converted into a freehold title or a new order right as a member of the community.

A Member of the Committee said that the Communal Land Rights Act would attempt to upgrade PTO. Will this allow the doors to be opened for the granting of loans and security?

Ms Ntuli questioned how the bill would assist with developmental issues. How was it going to assist to develop the area?

Mr Brocker said that people would not lose out on their rights such as PTOs. Rights such as PTOs may not be taken away from people. In terms of IPILRA, certain informal rights were protected and a holding mechanism was created. People who hold those rights may only be deprived of those rights with written consent. If rights were derived from Communal Rights and if an individual is deprived of its rights in terms of customary law they would have to be compensated. The Inquirer process will determine who holds rights; people would not have to re-apply. .

Mr Brocker proudly commented that the Deed of Communal Land Tenure Right has officially been classified as a title deed and was not equivalent to a PTO, as such it would be registered in the Deeds Office. He went on to state the two principal differences between a PTO and the new title deed. The first one concerns the registration system where the new order rights will be registered under one system. The second difference, between a new order right and a full title, is a communal right. Individual rights will be subject to the law of general application; however if it is a communal right, being part of a community, it will in addition be subject to the rules of the community, which an individual is not. If restrictions are placed on the use of your site in a piece of communal land those restrictions will be replaced by the rules of the community and not by government or the CLRA. Therefore Section 6 makes a provision for the conversion when people became the new registered title holders. The individual member can apply to the community in order that their rights should be excluded from that of the community and it could then become freehold rights. In this event it will be possible for an individual member to apply to the community to have his or her member rights excluded from the community into freehold title, if the community agrees to it. The Communal Land Rights Act does not prescribe who will have what rights. This is left to the community to decide.

Mr Brocker added that during the formulation of the CLRA, the Department had a meeting with the Banking Council and assurance was given that the deed of communal land right was a title deed which would be registered in the deed registry and would be treated like other title deeds of titles, and would therefore be a bankable instrument.

Mr Brocker said regarding development issues in communal land, that development issues would be subject to the community rules, which would further be directed by the proposed plans, which the community might have for a particular area of the communal land. Therefore it was said that in this example registering a long-term lease would not be contrary to the plans of the community. The development by an individual of the community cannot be contrary to that of the community. Financial institutions will recognise this new title. There will be multiple options. There is a perception that Traditional Leadership was going to govern communal land. However, the municipality has certain functions and has a duty to the community to provide services and facilitate development. The CLRA did not prevent this. It requires co-operation in developing communal land.

Mr Brocker said there had been disagreement whether this Bill should be referred to the National House of Traditional Leaders. The Department did not think it should be referred. The State Law Advisor disagreed. The Department felt it should not be referred as it did not pertain to customary law and the customs of traditional communities. This is not such a bill. It pertained to deeds legislation and did not impact on the content of the rights; it only dealt with the registration of rights. These rights do not derive from customary law or any customs of traditional communities. The registration of these rights was opposite to customary law. Therefore in essence Section 18 did not apply.

A Member of the Committee commented with concern that she hoped that the rules of the community would not stand in the way of individual rights.

The Chief Registrar of Deeds said that communal land rights are a separate debate. This Bill extends the life of the rights in terms of the Black Administration Act. When the act is repealed, there will be no mechanism in terms of the Deeds Registries Act by which to register rights. This was an interim measure until rights were upgraded.

Mr A Nel (DA) agreed that the Bill should be approved and further suggested that the Department at a later stage discuss the Communal Land Rights Act as it was a very important Act in this country.

The Department delegation responded that in terms of the latter Act, the Department has devised a National Implementation Framework.

The Chairperson stated that there would be further discussions on the Bill during the course of tomorrow’s meeting and it will then also be discussed when the Bill would be finalised.

Meeting adjourned.

 

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