Semester II/ 2014

W. ADAM
LAW OF PROPERTY LECTURE NOTES

LAW OF PROPERTY
Page 2 of 18

INTRODUCING THE CONCEPTS AND TERMINOLOGY
(Lecture 1, 2)
INTRODUCTION
Objectives:
To understand where the law of property fits into the legal system;
To understand where property rules come from;
To be able to define terminology pertinent to the law of property.
SCOPE AND CONTENT
Law of property deals with the following:
Rights, actions and relations of persons with regard to things and other forms of property;
The ways in which property rights can be acquired, exercised lawfully; and
Remedies by which these rights are protected against infringement and the legal results and
implications.





The difference between the law of things and law of property is that property includes incorporeal assets
whereas law of things does not.
The Law of Property is mostly concerned with the private law sector where horizontal relationships between
private individuals are concerned, but there is a public law component which deals with constitutional protection
of property rights (section 25).
The Law of property deals with real rights, intellectual property rights and other relationships to property
(unlawful control of property).
BACKGROUND, SOURCES AND CURRENT DEVELOPMENT
SOURCES OF THE TRADITIONAL LAW OF THINGS
a. Roman Dutch Common Law (Grotius, Voet, Van der Linden)
If common law did not provide a rule or if the context necessitates a deviation from common law
because the common law was either outdated or non-suitable to the South African Context
b. Statutory Law (Sectional Titles Act 95 of 1986) used to enforce segregatory policy
For further explanation of how to apply the rule and to determine the scope and manner of application
of the rule
c. Precedent (Ex parte Geldenhuys (1926) (O), Setlogelo v Setlogelo (1914)(A))
In order to facilitate the transition from a minority white racial hegemony towards a society based on
democracy, social justice and fundamental human rights:
Old discriminatory laws were abolished to be replaced by new democratic laws
1
1
South African Legal System
Private Law
Law of Obligations
Law of Things Law of Delict Law of Contracts
LAW OF PROPERTY
Page 3 of 18

Existing legal system and its tradition, sources and background were re-evaluated.
(Section 39(2) Constitution)
SOURCES OF CURRENT LAW OF PROPERTY SINCE 1994
a. Roman Dutch Common Law (Grotius, Voet, Van der Linden)
If common law did not provide a rule or if the context necessitates a deviation from common law
because the common law was either outdated or non-suitable to the South African Context, rule must
be applied with consideration of whether it will promote or frustrate the ideals of human dignity,
freedom and equality as protected by the Constitution.
b. Statutory Law (Sectional Titles Act 95 of 1986) new laws must be evaluated against the Constitution
(Constitutional Review)
For further explanation of how to apply the rule and to determine the scope and manner of application
of the rule and to determine whether certain decisions are outdated or incompatible with the social,
political and legal developments.
c. Precedent (Ex parte Geldenhuys (1926) (O), Setlogelo v Setlogelo (1914)(A)) old precedent informed
by the spirit and law of apartheid can no longer be accepted as authority. (Minister of the Interior v
Lockhat (1961) (A))
d. Customary Law (Judicial notice given to certain rules of customary law) applied insofar as it is
compatible with legislation dealing with customary law and the Constitution
e. Constitution (The Bill of Rights) (s39(2), s8(1,3))

THINGS AS LEGAL OBJECTS
Objectives:
To be able to define the relationship between property and things;
To understand things by definition and characteristics;
To understand how things are categorised and the purpose of such classification;
Thing: a specific category of property that is
- a corporeal (sensorially observed and occupying a certain space) object
- outside of the human body (external)
- that is an independent (distinct and separate/measured, demarcated or contained) entity
- capable of being subjected to legal sovereignty (susceptible to control)
- by a legal subject for whom it has use and value (satisfies the needs of the legal subject
objectively).
CHARACTERISTICS OF A THING
Corporeality
An entity that can be sensorially observed and it occupies a certain space (e.g. horse, motor bike,
residential site, a cylinder with oxygen). Forces of nature are excluded in South African law as being
corporeal entities, but this is not always the case in foreign legal systems.
Exceptions: subjective rights recognised by statute or case law as things.
Ben-Tovin b Ben-Tovin 2001 (CC) Principle: shares in a company which provide a
shareholder with a claim against the company are incorporeal things.
Badenhorst v Balju Pretoria Sentraal 1998 (T) Principle: membership interests in a close
corporation is an incorporeal moveable thing.
Graf v Buechel 2003 (SCA) Principle: loan account of a director of a company is an
incorporeal thing.
Telkom SA Ltd v Xsinet (Pty) Ltd 2003 (SCA) Principle: creditors right to the use of a
telephone and bandwidth system installed on business premises is an incorporeal thing.
External to humans
1
LAW OF PROPERTY
Page 4 of 18

A human being cannot be a legal object.
Human corpses or parts of corpses may be classified as legal objects which fall outside of
legal commerce.
Parts of human bodies which can no longer be connected to a human being may be
recognised as negotiable things (e.g. hair used to make a wig, human reproductive cells for
the purposes of artificial reproduction, organs for the purposes of organ transplantation)
subject to the Human Tissue Act 65 of 1983.
Independence
The thing must be a definite and distinct entity that exists separately.
Water, land, sand and air must first be separated by human activity into recognisable and
manageable entities before they will be regarded as things which fall within legal commerce
Air and other gases become negotiable things when they are contained in cylinders.
Immovable things come into being after demarcation on an approved and registered surveyors
plan, diagram, aerial photograph or general plan (Deeds Registries Act 47 of 1937, Land Survey
Act 8 of 1997). A building erected on land forms part of the immovable thing.
A sectional title unit as immovable thing is described in terms of the registered sectional plan
(Sectional Titles Act 95 of 1986).

Subject to juridical control
Things must be susceptible to juridical control.
Heavenly bodies and other aspects of nature (such as the sea and air when unseparated) are not
things.

Useful and valuable to humans
No legal relationship can exist between a corporeal thing and a legal subject if it is not useful and valuable
objectively. It need not have economic value but may be of sentimental value (e.g. a dead leaf is
objectively valuable because it may be used as compost or in a scientific study).

CLASSIFICATION OF THINGS
Negotiable and non-negotiable: does it fall within legal commerce or not?
Whether a thing is negotiable or not is determined by statute and case law.
Singular and composite: Is it an independent object or is it composed of various components?
Whether a thing is singular or composite is determined by the following test: Does the legal object
exist independently without being composed of particular components?
If it is a composite thing, the various components are identified as follows:
Principal components:
Exists independently
Provides the composite thing with its identity
(Khan v Minister of Law and Order 1991 (T))
Accessory components:
Exists independently but has merged or mixed to an extent that it has lost its independence.
o Is it physically and mechanically connected to the principal component in a way that they lose their
independence(JL Cohen Motors (SWA) v Alberts 1985 (SWA))?
Does not help to determine the composite thing's identity (Khan v Minister of Law and Order
1991 (T)).
1
LAW OF PROPERTY
Page 5 of 18

o Is it a functional or economic part of the principal thing which enhances the usefulness of the principal
thing.
o A broader criterion is suggested with regards to modern technological developments.
Auxiliary components:
Exists independently but which, because of its economic value, destination or use is no
longer regarded as independent
o Things made of the same material as the principal thing and meant to be part of the principal thing are
auxilliary things (Senekal v Roodt 1983 (T))
Fruits:
Produced by the principal thing without the latter being consumed or destroyed thereby.
Before separation are accessory things to the principal thing, but are destined to be
separated from the principal thing and to exist separately and independently.
Natural fruits: organic and inorganic things which renew themselves.
Hanging fruits: Frutus pendentes
Separated fruits: fructus separati
Gathered fruits: fructus percepti
Civil fruits: fruits like rent, interest on capital, profit from an undertaking, dividends on shares.

Movable and immovable: Is it a unit of land or something permanently attached to land by means of
accession, sectional title units or not?
Movable Immovable
Transfer of Ownership Delivery + Intention Registration in the Deeds Registry + Intention
Contracts Alienation: No Formalities.
Credit agreements: Formalities of National Credit
Act 35 of 2005.
Alienation: Formalities of Alienation of Land Act 68
of 1981 and/or Property Time-sharing Control Act 75
of 1983 and/or Sectional Titles Act 95 of 1986.
Real Security Pledge or registration of notarial bond. Registration of mortgages
Alienation of Minors belongings - >R100k may be alienated or burdened by a parent or
guardian only by order of High Court.
<R100k may be alienated or burdened by a parent or
guardian with approval of the Master.
Sale of Debtors Assets Movables attached first Immovables attached thereafter.

Fungible and non-fungible: Does the legal object have individual characteristics? (Can the legal objects
be replaced by similar things or not?)
Determined in terms of a contractual agreement.
Money is classified as a fungible thing (Commissioner of Customs and Excise v Bank of Lisbon
International Ltd 1994 (N))
Consumable and non-consumable: Can the legal object be depleted in value or consumed by normal
use?
Parties to an agreement concerning loan or lease of consumables necessarily intend that the borrower or
lessor replenish the thing with a similar thing upon conclusion.
Usufruct cannot be given with regard to consumables (except money), a quasi-usufruct may be given
(Cooper v Boyes 1994 (C)).
Divisible and indivisible: Can the legal object be divided into smaller components while retaining its
function and nature and without depleting the value of the components?

1
LAW OF PROPERTY
Page 6 of 18

REAL RIGHTS, PERSONAL RIGHTS AND PROPERTY RIGHTS
(Lecture 3, 4)
Objectives:
To understand the difference between real rights, personal rights and property rights;
To know the manner in which real rights are divided into ownership and limited real rights;
To determine the distinction between real rights and creditors rights using the subtraction from the
dominium test
Property rights constitute real rights, limited real rights as well as personal rights. Real rights are rights in
respect of a possession against all third parties, whereas personal rights are rights against a specific person.
Limited real rights are rights in respect of another persons possession.
Property Rights
Real Rights Limited Real Rights Personal Rights Immaterial Property
Rights
Unlawful Property
Relations
Ownership is the most
complete real right in a
specific possession.
Registered long term
leases, servitudes,
usufructs, bonds,
mineral rights are
limited real rights with
respect to a specific
possession belonging to
another person
Shares are personal
rights against a
company.
Leases are personal
rights against the owner
of the possession.
Right to a pension,
medical scheme are
personal rights against
the pension fund and
medical scheme.
Copyrights are
immaterial property
rights with respect to
intellectual property.

When a possession is
acquired unlawfully
for example through
theft, resulting in
unlawful property
relations.

Property rights are afforded constitutional protection in terms of S25 of the Constitution.
RIGHTS IN CORPOREAL PROPERTY
Real rights or personal rights can be acquired with regard to corporeal things. Real rights and personal rights
are, however, acquired, exercised and protected differently.
The Law of Property is concerned with real rights and personal rights as well as incorporeal property rights
relating to property and the Law of Contract and Delict deal with non-property personal rights.
REAL RIGHTS
There are two types of real rights in terms of corporeal property:
Ownership is the only complete real right in ones own property.
Limited real rights are limited rights to specified uses of property belonging to someone else. A
limited real right diminishes certain rights of the owner. The most important categories are servitudes
and real security rights. Inter alia, mineral rights and long term leases are other forms of limited real
rights.
MINING AND MINERAL RIGHTS
Cases and classification as limited real rights must be read in their context because the various rights regarding
mining and minerals are unique.
REGISTRATION OF NON-REAL RIGHTS
Real rights in immovable property must be registered (created and transferred by registration (S63(1)
Deeds Registries Act).
2
LAW OF PROPERTY
Page 7 of 18

Real rights in movable property are generally not registered (created and transferred by way of
delivery).
Personal rights in land may not be registered, unless in exceptional cases and if registered by mistake,
are not transformed into real rights.
RIGHTS IN IMMOVABLE CORPOREAL PROPERTY
A distinction has to be made regarding immovable property rights created in a will or contract that are
classified as either limited real rights or personal rights.
South Africa does not restrict categories of limited real rights;
Limited real rights and personal rights in immovables can both be created by contract or a will.
Rights with respect to immovable property are acquired upon registration of the right (Deeds
Registries Act 47 of 1937).
The question is: Were rights created and what type of rights are they?
If the right is a real right, it must be registered in order to transfer or acquire the right. (S6(31) Deeds
Registries Act)
If the right is a personal right, it may not be registered.
CLASSICAL APPROACH
Object of the right determines whether it is a real right or personal right.
Real right: right of a person in a thing (thing is the object).
Personal right: right of a person against a person (obligation is the object).
PERSONALIST APPROACH
Manner of enforcement of the right determines whether it is a real or a personal right.
Real right: can be enforced against anyone (absolute).
Personal right: can be enforced against a specific person(s) (relative).
THE SUBTRACTION FROM THE DOMINIUM TEST




EX PARTE GELDENHUYS (1926) (O)
Determined the subtraction from the dominium test as a means to differentiate real and personal rights to
immovable property arising from a will/contract.

Children become co-owners of the land (co-ownership: real rights)

Surviving spouse, upon eldest child, divide the land in equal portions by drawing lots
Restricts the common-law freedom to subdivide;
Creates rights to enforce these prescriptions.
and the child drawing the portion with the homestead should compensate the others (individual ownership: real rights).
Creates rights to claim compensation.

Mutual
Will
(Husband and
Wife)
Geldenhuys case
(Formulation of Subtraction from
the Dominium Test)
Lorentz case
(Restrictive approach, payment of
compensation)
Pearly Beach case
(Revert to traditional formulation,
payment of compensation)
Denel case
(Confirmed restrictive approach, afforded more
value to intention of parties)
LAW OF PROPERTY
Page 8 of 18

What kinds of rights are stipulated in the will?
Subtraction from the Dominium Test
What obligation is created by the right in question?
What is the effect and intention (secondary consideration which cannot override principles of
law) of those obligations?

Burden upon land: (binding on any owner in respect of the land) subtraction from the
dominium (ownership) and the corresponding right is a real right and must be registered.
Burden upon a specific person: (binding on a specific person in their personal capacity) made in
terms of their personal capacity and the corresponding right is a personal right and need not be
registered.

Exception: When there is a close connection between rights, for convenience, such rights will
be registered together.
What is the effect and intention of these obligations?
Limited real right to restrict right of sub-division: The effect and intention was to restrict the co-owners right of sub-
division, meant to affect all co-owners and subsequent co-owners. It is a burden upon land and gives rise to a real
right which must be registered in terms of S63(1).
Right to Compensation: The effect and intention was to place a once-off burden on the one child only in their personal
capacity intended to restore the balance once portions had been distributed. The corresponding right is therefore a
personal right which could not be registered. However because of the connection between the two parts of the will,
both were registered together for convenience, without derogating from the nature of the obligations.
Intention: a secondary consideration.
LORENTZ V MELLE (1978) (T)
Restrictively applied subtraction from the dominium test and determined interpretation of the test regarding
rights to payment of a sum of money. ~Confirmed by SCA in Erlax Properties (Pty) Ltd v Registrar of Deeds 1992 (A) and Cape Explosive
Works v Denel 2001 (SCA).

Co-owners to the farm (co-ownership: real right).

Subdivision of the farm into 3 portions, one part to be owned individually each and the third portion to be co-owned.
Creates rights to enforce these subdivisions.

and if one of them established a township on their individual portion, the other party has the right to half of the profits
from the selling stands in such township.
Creates rights to claim compensation.

Was the registration of these conditions a mistake?
What is the effect and intention of these obligations?
Right to payment of a sum of money: The effect and intention of the right to demand periodic payment was not
determined in Geldenhuys. The court found that effect and intention of the obligation was to amount to a subtraction
from dominium but did not affect the owners right to use of the land in a physical sense.
Conflict created between the test and certain traditionally recognised limited real rights such as mineral
rights and mortgage bonds.
Obligation to pay money could never constitute a real right because a real obligation must place a
physical burden on the owners right to use and enjoyment (prevent a proliferation of burdens
against landownership). However the restrictive approach as applied in the Denel case does not exclude
a wider application of the subtraction test.
Intention: creates impression that the intention to create a real right is not considered at all, even though the intention
was not contrary to legal principles. The intention and legal effect was given equal weight in the Denel case.
PEARLY BEACH TRUST V REGISTRAR OF DEEDS 1990 (C)
Rejected the Lorentz decision, reverted to original formulation and decided that some obligations to pay a sum
of money could constitute limited real rights.
Notarial
Deed
(Co-owners of a
farm)
LAW OF PROPERTY
Page 9 of 18

Deed of
Sale
(Seller and
Purchaser)

Right to compensation: If the property is expropriated or if mining rights are granted with respect to the property, a certain
third party is entitled to one third of the consideration.
Creates rights to claim compensation.


Is the right to receive payment of a sum of money a real right?
What is the effect and intention of these obligations?
Right to payment of a sum of money: The effect and intention of the right to demand periodic payment was not
determined in Geldenhuys. The court found that effect and intention of the obligation was to place a burden on the
owners right to dispose of the property and enjoyment of the full fruits of such disposal, which placed a burden on
the land and was therefore a real right.
Obligations to pay money should never be treated as a real right because it may result in the proliferation
of financial burdens on ownership of the land and thus negatively affect the economy. However, the
decision may be interpreted in that the sum of money was a direct product of the land itself, with the
result of limiting the scope of application.
Intention: proper weight afforded to the intention of the parties, who intended to create a real right which was not
contrary to legal principles.



LAW OF PROPERTY
Page 10 of 18

OWNERSHIP AND CO-OWNERSHIP
(Lecture 5, 6)
Objectives:
To understand the concept of ownership;
To distinguish between property rights and ownership;
To know the origin of the South African concept of ownership;
To understand the relationship between an owner and the community;
OWNERSHIP
The nature and extent of the concept of ownership is formed by the legal culture of communities.
Common Law: Ownership is the most complete right a person can have with regard to a thing (A person can
do on and with his property as he likes). Restrictions on this freedom emerge from either objective law
(statute) or by the rights of others. (Gien v Gien 1979 (T)).
English Common Law:
Roman Dutch Law: Right of alienation, right to exclude others and right to derive an income comprises a
dominion
Customary Law:
There are certain aspects that affect the ownership relationship:
Entitlements: Relationship between legal subject (owner) and legal object (thing).
Limitations:
Statutory limitations
(E.g. Entitlement to control agricultural land is limited by Physical Planning Act 125 of 1991
and Development Facilitation Act 67 of 1995)
Relationship between legal subject (owner) and other legal subjects (others) regarding the
thing
limited real rights (subtraction from the dominium principle, enforceable against
owners successors)
(E.g. Entitlement to use limited by a usufruct)
personal rights granted in respect of the thing (do not subtract from the dominium
and are unenforceable against the owners successors))
(E.g. Entitlement to use and benefit limited by contract of lease)
Public interest: sic utere tuo ut alienum non laedas
(E.g. Entitlement to use and economic benefit limited by nature conservation interests)
CONTENT OF OWNERSHIP
ENTITLEMENTS OF THE OWNER
Entitlement to control (physical control)
Entitlement to use (use and benefit)
Entitlement to encumber (grant limited real rights)
Entitlement to alienate (transfer)
Entitlement to vindicate (claim back from others)

3
LAW OF PROPERTY
Page 11 of 18

LIMITATIONS ON OWNERSHIP


CO-OWNERSHIP



LAW OF PROPERTY
Page 12 of 18

LIMITATIONS ON OWNERSHIP
(Lecture 7, 8, 9)

LAW OF PROPERTY
Page 13 of 18

ACQUISITION OF OWNERSHIP
(Lecture 10, 11, 12)

LAW OF PROPERTY
Page 14 of 18

PROTECTION AND TERMINATION OF OWNERSHIP
(Lecture 13, 14)

LAW OF PROPERTY
Page 15 of 18

POSSESSION AND HOLDERSHIP
(Lecture 15, 16, 17)

LAW OF PROPERTY
Page 16 of 18

LIMITED REAL RIGHTS
(Lecture 17, 18, 19, 20, 21, 22)

LAW OF PROPERTY
Page 17 of 18

THE CONSTITUTION AND THE LAW OF PROPERTY
(Lecture 23, 24, 25, 26)

LAW OF PROPERTY
Page 18 of 18

GLOSSARY
Person: a legal subject who can acquire and exercise rights and obligations in law (can be natural or juridical).
Object: anything with regard to which a person can acquire a right, and there are different kinds of rights associated with different
categories of objects.
Property: all assets that form part of a persons estate. Property is not defined in the Constitution, but S25(4)(b) states that property is not
limited to land. (Badenhorst: 1) A right of ownership in a legal object; 2) The legal object to which this right relates; 3) A variety of legal
relationships qualifying for the protection as such under the Constitution). Under Common Law, object of real rights and real rights
themselves
Corporeal: a physical asset that is tangible and perceptible;
Movable: assets such as a book or a car;
Immovable: assets such as a house or piece of land;
Incorporeal: a non-physical asset that is intangible and imperceptible;
Intellectual Property: assets such as a patent or copyright;
Limited real rights: assets such as security rights or servitudes;
Thing: a specific category of property that is a corporeal object outside of the human body that is an independent entity capable
of being subjected to legal sovereignty by a legal subject for whom it has use and value (satisfies the needs of the legal subject);
the legal object of a real right;
Right: a legally recognised, protected and valid claim by a subject to a certain object which arises when the right was properly and lawfully
established;
Property Right: any legally recognised claim to or interest in property including real, personal and constitutional rights with
regards to all kinds of property;
Lawful claim: a claim or action which is acknowledged and protected by existing legal principles;
Unlawful claim: a claim or action which is in conflict with or not acknowledged by the law;
Real Right: Right in a corporeal or incorporeal thing belonging to oneself;
Limited Real Right: Right in a corporeal or incorporeal thing belonging to another person;
Personal Right: Right against a person (that a person must do something, refrain from doing something, pay someone money or
give someone something);

Remedy: a legal procedure provided by the legal system to protect a right against infringement or to control the effects of an unlawful act or
situation;