Good intentions but with dire results

Posted 01 February 2020

Jodie van Broekhuizen

The facts before the High Court of South Africa, Gauteng Division, Pretoria were, in short:

Matshabelle Mary Rahube (MR) and Hendsrine Rahube (HR) are siblings who, with other members of their family, moved into a property known as Erf 2328 Mabopane-B. Matshabelle moved out of the property in 1973 to live with her husband but moved back in 1977 after her marriage was dissolved. She has been living there since.

In 1987, Hendsrine was issued a Permission to Occupy and, in 1980, a Deed of Grant was issued by the relevant Provincial Department of Housing in terms of Proclamation 293 of 1962 - the Regulations for the Administration and Control of Townships in Black Areas. The Deed of Grant was 'upgraded' to full ownership in 1991 in terms of s2(1) ULTRA.

In August 2009, HR instituted eviction proceedings against his sister and all other occupants of the property. It was also during this time that MR allegedly first became aware of the fact that her brother was the (only) registered owner of the property; the right having been bestowed on him by s2(1) ULTRA. She posed the question as to whether s2(1) and the fact that it provides for an automatic 'upgrade' from grant rights to full ownership, was constitutionally valid.

The High Court of South Africa, Pretoria ruled on 26 September 2017 that s2(1) ULTRA is unconstitutional insofar as it provided for the automatic conversion of land tenure rights into full ownership, without any procedures to hear and consider competing claims. The Constitutional Court confirmed the order made by the high court and varied it to, inter alia, read (unquoted):

a. Section 2(1) of the Upgrading of Land Tenure Rights Act (112 of 1991) is declared constitutionally invalid insofar as it automatically converts holders of any deed of grant or any right of leasehold as defined in Regulations for the Administration and Control of Townships in Black Areas, 1962 Proc R293 GG373 of 16 November 1962 (Proclamation 292) into holders of rights of ownership in violation of women's rights in terms of s9(1) of the Constitution.

b. The order in (a) is made retrospective to 27 April 1994.

c. In terms of s172(1)(b) of the Constitution, the order in paragraphs (a) and (b) shall not invalidate the transfer of ownership of any property which title was upgraded in terms of s2(1) of ULTRA through:

1. Finalised sales to third parties acting in good faith;

2. Inheritance by third parties in terms of finalised estates; and

3. Upgrade to ownership of a land tenure right prior to the date of the said order by a woman acting in good faith.

d. The order in (a) is suspended for 18 months (that would be until 30 April 2020) to allow parliament the opportunity to introduce a procedure for determination of rights of ownership and occupation of land.

This begs the question whether s2(1) of ULTRA unjustly violates women's rights to equality on the basis of gender and sex or whether it recognises and/or converts rights that have been acquired through other discriminatory legislative schemes. Although the Constitutional Court alluded to this, the matter was neither discussed nor addressed. The result is a potential lacuna as deeds of grants and certificates of leaseholds may be dealt with, in principle and substantially, in exactly the same way as full title properties and having been granted to holders without necessarily considering the constitutional rights of black females.

Ownership held by virtue of deeds of grants or certificates of leasehold may be transferred freely, mortgaged, let and alienated (in its widest form) without having been 'upgraded' and without having to consider the interests of third parties. In fact, the said acts do not even allow for the same appeal procedure (as does s24D(10(a) of ULTRA, which reads: 'Any person aggrieved by an entry made by a person designated under subsection (1) or (2) in a register of land rights, may within 30 days after he or she becomes aware of the entry, but not more than a year after the entry was made, appeal in writing against such entry to the Minister'.

It must be noted though that there are certain limitations on holders of grant rights or leaseholds who will not be allowed, inter alia, to open sectional title schemes, etc. Apart from the differences in property description (leasehold rights and grant rights versus full title ownership) and the means of transferring ownership, there are no significant differences between being the holder of a grant right or leasehold to that of freehold ownership.

Although the rationale behind declaring s2(1) unconstitutional may be just and fair, not all grant-rights are held by natural persons. For instance, some deeds of grants in respect of commercial properties have been issued in names of companies. One wonders how the judgment of the Constitutional Court will affect those transactions and ownership.

Another question that will (for now) be left unanswered, is how it will be determined whether a finalised sale to third parties has been 'in good faith'? Will it, by default, mean that all finalised sales to third parties should be considered valid unless the contrary is proven? 'In good faith' has not been defined. Are these common-law rights not already entrenched in our legal system for all (including black women) to call upon when their property rights are, or have been, violated?

Parliament has only six months during which to introduce a procedure for determining the rights of ownership and occupation of land to cure the injustice caused to, especially, black women and their rights to ownership of land.

It is currently uncertain whether parliament will be able to come up with a creative piece of legislation to address not only the unconstitutionality of s2(1) ULTRA but also the archaic pre-democracy land tenure acts in time. Parliament was not tasked with the latter but at some stage these issues will need to be addressed. The clock is ticking and one can only hope that the Department of Rural Development and Land Reform will have a contingency plan if parliament is unable to implement a new strategy in time.

In the interim (until 30 April 2020, at least) it will be the ethical duty of the conveyancer to ascertain whether there are any rights of third parties, especially black females, which need to be protected when dealing with schedule 1 Act (112 of 1991) tenure rights. The usual FICA and status affidavits will unlikely suffice. Matshabelle should be borne in mind when transferring property involving any schedule 1 Act (112 of 1991) transactions including, but not limited to, Proclamation 293/62 Deeds of Grants and Act (4 of 1984) Leaseholds

Article published in Without Prejudice February 2020