Registrability of rights in the deeds registry: the twofold test revisited

In practice the courts use a so-called twofold test to determine whether rights are real, and therefore, registrable in the deeds registry. Personal rights are not registrable. In terms of the twofold test, in order for a right to be registrable, the following requirements must be satisfied: (a) the intention of the person who creates the purported real right must be to bind not only the present owner of the land, but also successors in title; and (b) the nature of the right or condition must be such that registration thereof results in a subtraction from the dominium of the land against which it is registered. The article provides an overview of the application of the twofold test by the Supreme Court of Appeal (“SCA”). The overview of case law shows the successful application of the test by the SCA and its applicability has become settled law. A more basic formulation of the twofold test with a different sequence and more emphasis on the acquisition of an entitlement test is proposed. It is shown that rights established in respect of land which restrict the landowner’s entitlements to use or dispose of land are usually recognised as real rights by the courts. It is suggested that other possible restrictions on the entitlement of disposition in the case of problematic rights, which are registrable in accordance with deeds office practice, such as restraints against alienation, rights of pre-emption or reversionary rights, should be revisited. The dominance of the twofold test does not mean that other theoretical tests to distinguish between real and personal rights should not be used.