Prohibition of Certain Actions Regarding Agricultural Land

Introduction

  Section 3 of the Subdivision of Agricultural Land Act 70 of 1970 (the Act) reads as follows:

              “3.         Subject to the provisions of section 2 –

 (a)             agricultural land shall not be subdivided:

 (b)             no undivided share in agricultural land not already held by any person, shall vest in any person;

 (c)             no part of any undivided share in agricultural land shall vest in any person, if such part is not already held by any person;

 (d)             no lease in respect of a portion of agricultural land of which the period is 10 years or longer, or is the natural life of the lessee or any other person mentioned in the lease, or which is renewable from time to time at the will of the lessee, either by the continuation of the original lease or by entering into a new lease, indefinitely or for periods which together with the first period of the lease amount in all to not less than 10 years, shall be entered into;

 (e)                           (i)   no portion of agricultural land, whether surveyed or not, and whether there is any    building thereon or not, shall be sold or advertised for sale, except for the purposes of a mine as defined in section 1 of the Mines and Works Act, 1956 (Act 27 of 1956); and

                        (ii) no right to such portion shall be sold or granted for a period of more than 10 years or for the natural life of any person for periods aggregating more than 10 years, or advertised for sale or with a view to any such granting, except for the purposes of a mine as defined in section 1 of the Mines and Works Act, 1956;

 (f)              no area of jurisdiction, local area, development area, peri urban area or other area referred to in paragraph (a) or (b) of the definition of “agricultural land” in section 1, shall be established on, or enlarged so as to include, any land which is agricultural land;

 (g)             no public notice to the effect that a scheme relating to agricultural land or any portion thereof has been prepared or submitted under the ordinance in question, shall be given, unless the Minister has consented in writing.”

    Application of the said section       

 When agricultural land is subdivided, the Surveyor General endorses the particular diagram to the effect that the Minister’s consent has been granted, or that the subdivision concerned is exempt from the provisions of the Act. It is the duty of the conveyancer / practitioner to ascertain from the diagram whether a consent must be called for and lodged, or not. If the diagram refers that consent has been issued, then it must be lodged with the deed for registration.

 It is thus not the duty of the Registrar of Deeds and Conveyancers to adhere to section 3(a) (see in this respect section 6(1) of the Act).

 At first glance, sub section (b) seems to be repeated in sub section (c). Sub section (b), however, prohibits the transfer of an undivided share where the transferor holds the whole property, while sub section (c) prohibits the transfer of a share of an undivided share. In both sub sections (b) and (c), an undivided share or a share thereof may, if already held by a person, be transferred to one other person. In other words, the Act prohibits the increase in the number of owners of a piece of agricultural land without the Minister’s consent (CRC 4 of 1970).

 The former, as it was then known, Directorate: Soil Protection of the Department of Agriculture Economics and Marketing approved that the Minister’s consent in terms of sections 3(b) and 3(c) of the Act will not be necessary in the following cases:

 ·        where agricultural land is transferred to two or more persons and simultaneously to one person;

 ·        where a co-owner transfers his/her undivided share in agricultural land to two or more of the remaining co-owners of that property, provided that with regard to the proviso to section 13(1) of the Deeds Registries Act, certificates of registered title in terms of section 35 of the Deeds Registries Act of their aggregate shares is registered simultaneously with such transfer (CRC 5 of 1986 as confirmed by RCR 34 of 1989).

 In view of the above further exemptions, a conveyancer must bear in mind that the aforesaid transactions must be registered simul ac semel.

 A registration in terms of the provisions of section 25(3) of the Deeds Registries Act, 47 of 1937, does not qualify for the exemption in terms of section 2 and may therefore not be registered without a consent from the Minister unless there is only one beneficiary. In the latter case no permit will be required.

  Sub section (d) refers to the so-called long-term leases where a portion of agricultural land is leased. Thus, if a portion of agricultural land is leased for, say, two years, no Minister’s consent is required. Note should be made to the fact that no prohibition is contained in this sub section against the affording of a lease over an undivided share in agricultural land, irrespective of the period of such lease. This would appear to be an oversight by the legislature. The latter was also confirmed by RCR 42 of 1996.

 If a right of habitatio is granted over agricultural land for a period of 10 years or for the lifetime of the holder of such right, the consent of the Minister must be obtained and lodged (see in this regard section 3(e)(ii) read with CRC 3 of 1995).

 Noncompliance of section 3(e) renders the relevant agreement of sale void ab initio (Geue and Another v Van der Lith and Another 2004 (3) SA 333 (SCA)). The court held that it was clear from section 3(e)(i) that the legislature intended to prohibit any sale of an undivided portion of farm land, whether conditional or not, unless subdivision had actually been approved by the Minister. Further, the courts are not entitled, under the guise of absurdity, to avoid the clear intention of the legislature merely because they regard particular consequences to be harsh or even unwise.

 Following the decision in Geue-discussion a Registrar of Deeds must insist on the consent of the Minister whenever a portion of agricultural land is being transferred and such consent must be dated prior to the date of sale, irrespective of whether the sale was in terms of an option or subject to a suspensive condition.

 Conference held that where a vesting clause is faulty in that agricultural land was registered in a joint estate of parties married in community of property instead of in both spouses married out of community of property or whose marriage is governed by the laws of a foreign country and the error is rectified in terms of section 4(1)(b), a consent must be obtained and lodged (see RCR 6 of 1989).

 In terms of RCR 7 of 1991, where land is registered in the names of parties married in community of property to each other and the one spouse dies leaving a will bequeathing his/her half share to be held in trust for his/her children in terms of section 40 of the Administration of Estates Act 66 of 1965, if the bequeathed property is agricultural land as defined in the Act, the consent of the Minister must be obtained and lodged.

 When the title to agricultural land is endorsed in terms of section 45bis(1A) of the Deeds Registries Act 47 of 1937, such transfer by endorsement is regarded as an increase in shareholders, and thus the consent by the Minister must be obtained and lodged.

 Where a certificate of registered title is taken out in respect of a portion of agricultural land, the examiner will note a caveat stating that a transfer of the subdivided portion or remainder, the date of sale cited in the deed of transfer must be compared with the date of issue of the consent filed with the certificate of title to ensure that the sale took place subsequent to the issue of the caveat (RCR 47 of 2012).

 Sub sections (f) and (g) will naturally affect the laying out of new townships, or the extension of existing townships on agricultural land.

 Allen West

Property Law Consultant

Hannes Gouws and Partners