Do you want to consolidate your properties?

14/05/2024 - By Tiffany Mare

What is consolidation?

Consolidation of property involves combining two or more properties into a single larger property. Consolidation serves as a powerful tool for property owners seeking to optimize their land value and/or create development opportunities.

What are the prerequisites?

Section 40 of the Deeds Registries Act 47 of 1937 (Act), confirms the following requirements for the consolidation of properties:

• The land must be registered in the same property register, i.e., in the same administrative district and province.
• The land must be adjacent to one another (They must have a common boundary)
• Both pieces of land must have the same owner (or be owned by two or more persons with the same undivided shares in each
piece of land)

Where to start?

When embarking on a consolidation journey, it is essential to contact a Land Surveyor. The Land Surveyor will draft the Consolidation Diagram and submit the Application for the Consolidation to the Local Authority. Following approval by the Local Authority, the Diagram goes to the Surveyor General for final approval.

Once the Diagram is approved, the owner will have to engage with Conveyancing Attorneys in order to get the consolidation registered in the Deeds Office and register a Title Deed reflecting the consolidated property known as a Certificate of Consolidated Title.

The following documents will be required by the Conveyancing Attorneys:

• Consolidated diagram in duplicate
• Title deeds of each property being consolidated
• Notification of approval of consolidation by the municipality (if the transaction is not registered within 5 years from date of
approval it will lapse)
• Consent by Local Authority to consolidation (with the attached conditions of approval imposed
• Certificate of compliance by the Local Authority (confirming all requirements and conditions for consolidation have been met)

What if the property is mortgaged?

A. Where all properties to be consolidated are mortgaged by the same Bank
• The Conveyancing Attorneys will apply to the Bank for the following documents on each bond :
• Mortgagees written consent (to the issue of the certificate of consolidated title)
• The relevant Mortgage Bond/s to be endorsed to show the consolidated property

B. Where the properties to be consolidated are mortgaged by different Banks
• Either one or all the bonds must be cancelled. Two different Banks cannot be first bondholders over the same (consolidated)
property.
• If only one mortgage bond is cancelled, the remaining bondholder (the Bank) will be required to consent to the consolidation.
• All bonds can also be cancelled and a new bond applied for on the consolidated property with one Bank

Upon consolidation of the properties, the existing bond/s are either endorsed to show the consolidated property or the new bond over the consolidated property is registered simultaneously.

Following registration of the Certificate of Consolidated Title in the Deeds Office and the Deeds Office has updated their data systems, the original deed of the newly consolidated property will be delivered to the owner. (In the case of the property being mortgaged, the original deeds will be delivered to the bank and the owner will obtain a copy)

The property owner will then need to take proof of the registration to the Local Authority in order to update their systems, close the existing accounts over the properties and open a new municipal account over the newly consolidated property.