You and your neighbour, an old friend, have a decades-old handshake understanding that you and your employees may take a shortcut through his adjoining farm, over an existing road, for you and them to get to another part of your farm. Is this agreement valid and, if your neighbour were to sell up, become insolvent, be expropriated or pass on, would you be able to retain this privilege? In the same vein, many contracts for the sale of farmland have a clause stating that the seller confirms that there are no unregistered servitudes against the property sold. Why?
Essentially, are unregistered servitudes binding?
For an agreement (enforceable agreements are termed contracts) to grant a servitude to be binding, the agreement must have been given in writing, by the owner of the property that will be subject to the servitude and signed by both parties. This creates what is known as a personal right which, if registered against the title deeds, becomes “real”. That the difference between a personal right and a real right is that the former is enforceable against only the grantor of that right whilst the latter stands against everybody.
This difference is important as, if not registered/real, such a servitude cannot necessarily be enforced against future purchasers and family who inherit the farm subject to the servitude. Technically, even if reduced to writing and signed, such a contract does not give title to the servitude but conveys only a right to demand registration of that servitude to the holder thereof. In other words, the mere fact that one holds a contract, which grants servitudinal rights, does not make you the owner (in the full sense of the word) of those rights.
Contracts for the sale of farmland often guarantee the absence of unregistered servitudes as there is an exception to the above arrangement: a purchaser of a farm who knows about the existence of an unregistered servitude over that farm, is bound give registration or ownership of that servitude, if requested by the holder of that personal right. If that purchaser does not know of the existence of that servitude, the holder of that servitude (generally speaking) has no rights against him.
There are good reasons for the requirement that such agreements should be in writing, signed and registered: handshake-deals create uncertainty which detract from our excellent land registration system and have the potential to cause enmity between neighbours. At the same time, registration ensures that such contract which contravene legislation, are not carried forward.
If you value your friendship with your neighbour and need the use rights he gives you over his farm, consult a notary and have the servitude reduced to writing, signed and registered.