Ceding a registered lease (s 80)
Once a long lease has been registered at the deeds office, the lessee holds a limited real right — a leasehold — in the land. Like other real rights, a registered lease can be transferred to a third party by cession. Section 77(1) of the Deeds Registries Act (covered in detail in the guide on registering a notarial lease) already provides that any cession of a lease intended or required to be registered must itself be notarially executed. Section 80 adds a threshold condition that gates the cession's registration:
No cession of a lease or sublease shall be registered in any deeds registry unless the lease or sublease has been registered therein.
Section 80 is a single, unqualified rule: a cession of a lease cannot be registered at the deeds office unless the underlying lease has itself already been registered in that same registry. This has two immediate practical consequences:
- An unregistered long lease cannot be ceded at the deeds office. If the parties have entered into a notarial lease but not yet registered it, any cession of that lease — even if itself notarially executed — cannot be taken to the deeds office until registration of the head lease is first effected.
- The cession itself must be notarially executed. Section 77(1) requires notarial attestation of any cession of a registrable lease. The cedent (existing lessee) and the cessionary (incoming lessee) must both execute the deed of cession before a notary public. The notary attests; the deed is then lodged together with the original deed of lease (so the registrar can endorse the cession on it) and the title deed of the land.
The practical consequence of a registered cession is that the cessionary steps into the shoes of the original lessee for the remaining term of the registered lease. The lessor's consent to the cession is a contractual matter governed by the lease agreement itself (many leases prohibit or restrict cession without the lessor's written consent), but the deeds office requirement under section 80 is simply that the head lease must pre-exist as a registered instrument. Once the cession is registered, the registrar endorses the cession on the deed of lease and on the title deed, creating a public record of the new lessee.
Using a registered lease as security (ss 81–82)
A registered long lease is a real right in immovable property and can therefore be used as loan security. The form of security depends on whether the lease is classified as immovable property. Section 81 sets out the rule:
No hypothecation of a lease or sublease shall be registered in any deeds registry unless such hypothecation is effected by means of— (a) a mortgage bond, if the lease or sublease is immovable property; or (b) a notarial bond, if the lease or sublease is not immovable property.
The key distinction is between a registered lease (which is immovable property, having been converted into a limited real right by registration) and an unregistered lease (which is a personal right and therefore not immovable property). Because a registered notarial long lease is immovable property, section 81(a) applies: it must be hypothecated by mortgage bond.
Section 82 supplements section 81(b) by providing for the registration mechanics of a notarial bond specially hypothecating a registered lease or sublease — where such a bond is used, the deed of lease or sublease must be produced to the registrar, who then endorses on the deed that the lease or sublease has been hypothecated by the bond.
The practical significance is substantial: a lessee who holds a registered long lease of prime commercial premises — effectively a long-term real right over the property — can offer that leasehold as collateral security for a loan, in exactly the same way as an owner of freehold property can mortgage that property. The lender takes a mortgage bond over the registered lease; the bond is registered at the deeds office and endorsed on the deed of lease and the title deed; and the lender holds real security in the lessee's interest in the land for the duration of the bond. If the lessee defaults, the lender can enforce the bond against the leasehold interest.
This security feature makes registered long leases particularly valuable in commercial transactions — the lessee of a long ground lease can, for example, raise construction finance secured by a mortgage bond over the leasehold and develop the property during the registered term.
Termination & expiry noting (s 78)
A registered lease does not simply disappear from the deeds office record when it terminates or expires. Section 78 of the Deeds Registries Act prescribes what must happen after termination or expiry, and what restriction operates once the full term has run:
(1) When a registered lease or sublease has terminated the registrar shall on written application by the owner of the land affected thereby, or the holder of the lease, as the case may be, accompanied by proof of the termination of the lease or sublease and, in the case of the termination of the lease, by the title deed of the land and if available the deed of lease, or in the case of the termination of the sublease, by the deed of lease and if available the deed of sublease, note in the case of the termination of the lease, on the title deed of the land and on the deed of lease, if produced, or in the case of the termination of the sublease, upon the deed of lease and upon the deed of sublease, if produced, that the lease or sublease as the case may be, has terminated. (2) If the full term, including periods of renewal, of a registered lease or sublease has expired no further transactions affecting that lease or sublease shall be registered.
Note — Section 78 was in force as amended by s 34 of Act 43 of 1962 and related provisions. The section governs both leases and subleases; the text below concerns leases. The subsection (1) procedure for subleases is the mirror image: the deed of lease and the deed of sublease are produced to the registrar for endorsement, and the termination is noted on both.
Several points follow from section 78:
- Termination must be actively noted. The registrar does not automatically cancel a registered lease when it terminates — the owner of the land or the holder of the lease must make a written application to the registrar, accompanied by proof of termination and (if available) the title deed of the land and the deed of lease. The registrar then endorses the termination note on both instruments.
- Cancellation by agreement. Mutual cancellation of a registered lease during the term typically requires a notarial deed of cancellation, lodged at the deeds office with the title deed and deed of lease. The registrar notes the cancellation on both instruments. The guides on huur gaat voor koop and on insolvency discuss what happens to the registered lease on a change of ownership or insolvency of the lessor.
- Expiry of the full term bars further transactions (s 78(2)). Once the full registered term — including all renewal periods that were registered — has expired, no further transactions affecting that lease or sublease may be registered. A registered long lease that was granted for 30 years (including a ten-year renewal option), registered in 2005, cannot be ceded, hypothecated, or sub-leased after 2045. The real right has run its course and the prohibition in s 78(2) operates as an absolute bar.
- Distinction: termination vs expiry. Subsection (1) coverstermination — the lease ending before the full term, whether by cancellation, breach, or agreement. Subsection (2) covers expiry — the full registered term (including renewals) running to its natural conclusion. Both require the deeds office record to be updated, but by different mechanisms and with different procedural requirements.
Cancellation in practice — and why registration is not a cure for invalidity
Registration of a notarial lease creates powerful real-right protection for the lessee — but it does not validate a lease that was not lawfully concluded in the first place. Courts have made clear that registration at the deeds office is not a laundering mechanism: if the underlying lease was concluded without the necessary authority or in breach of public-law requirements, it can be set aside despite registration.
The decision underscores a foundational principle that practitioners and lessees alike must understand: the deeds office examines form, not underlying legality. The Registrar of Deeds checks that the deed is properly executed and complies with the Act and regulations; he does not investigate whether the municipal authority was actually lawfully constituted, whether the correct person signed, or whether the resolution presented to the notary was authentic. Those questions are for the courts if they are later challenged.
The second case in this section deals with a different cancellation question: who may cancel a registered notarial sub-lease, and evict the sub-lessee, after the sub-lessor’s identity has changed through a chain of sales and cessions?
Imperial Bank v Lanseria illustrates two practical points about registered notarial sub-leases. First, cancellation for non-payment is available to the sub-lessor in the ordinary way — a registered lease does not prevent the lessor from exercising a breach clause where the lessee defaults on rent. Second, who the sub-lessor is after a chain of sales and cessions is determined by the huur gaat voor koop substitution rule (from Genna-Wae) and by tacit or express cessions — the identity shown on the face of the notarial deed is not conclusive if the surrounding conduct and agreements establish a different sub-lessor in fact.
Together, Khutala and Imperial Bank v Lanseria set out the outer limits of what registration achieves and what it does not: it secures a valid right against the world for the registered term (the point of registering a notarial lease covered in the registration guide), but it does not immunise the lease from challenge if the underlying agreement was invalid, and it does not prevent the lessor from exercising ordinary contractual remedies for breach.