INTRODUCTION
In the recent case of O […] v K […] (339/2024) [2025] ZASCA 139 (“O v K case”), which judgement was delivered by the Supreme Court of Appeal of South Africa (the “SCA”) on 29 September 2025, it was made clear that the question of “who is the owner of immovable property” is a question of law, and that the answer thereto is determined by the abstract theory of ownership.
BRIEF BACKGROUND OF THE OVK CASE
In terms of the abstract theory of ownership, the right to ownership depends only on the existence of two elements. The first element being the existence of a real agreement and the second element being the element of a formal act of transfer.
In the O v K Case, the appellant’s argument was that he is the co-owner of the property which is registered in the name of the respondent and that the full property was registered in the name of the respondent only because the appellant’s creditors where threatening to attach his 50% share to the property at the time when the property was registered in both their names. As such, the appellant claimed that he and the respondent decided on a temporary solution and agreed to transfer the appellant’s 50% share of the property to the respondent with the intention of reversing the arrangement at a later stage.
The appellant also stated that when entering into the sale agreement to effect such transfer of his 50% share to the property, their true intentions were never to have the appellant’s 50% share of the property be permanently transferred to the respondent, but rather to have it transferred on a temporary basis and to be later reacquired by the appellant. The SCA held that it is only when a contract is fraudulent or is alleged to contradict public policy that the court will refuse to give such a contract its full force and effect, and that since the appellant did not raise any of these grounds as his reasons to have the sale agreement set aside, the first element was satisfied.
In considering the second element, the SCA took into account the fact that the appellant had also signed a power of attorney to pass transfer of his 50% share to the property two months after signing the sale agreement and in such a power of attorney, the appellant repeats that he relinquished his full rights and interest to the property in favour of the respondent. This power of attorneys thus gave effect to the transfer at the deeds office of the appellant’s 50% share to the property to the respondent and as such the second element was also satisfied.
Accordingly, the SCA held that even though the underlying sale agreement may be defective (but not fraudulent or against public policy), it still existed, and together with the second element of the abstract theory of ownership, ownership did exist.
THE ELEMENTS OF ARE AL AGREEMENT
The SCA referred to the first element of the abstract theory of ownership as a mutual intention by the parties to transfer and acquire ownership. Therefore, the transferor shall have the intention to dispose of the property to the transferee, while the transferee simultaneously has the intention to acquire the property from the transferor.
Section 2(1) of the Alienation of Land Act
68 of 198 (the “Alienation of Land Act”) provides the formalities which must be
complied with for the mutual agreement to be valid. In terms of these formalities, the mutual agreements should be written and contained in a deed of alienation (sale agreement), and it must be signed by the parties thereto or by their agents acting on their behalf by written authority. As such, mutual agreements that are verbal or written and contained in a deed of alienation but not signed by all the affected parties shall be of no force and effect and will not be sufficient for the existence of ownership.
THE ELEMENTS OF A FORMAL ACT OF TRANSFER
The SCA referred to this second element of the abstract theory of ownership as registration of the immovable property at the deeds office, in other words, the property must have been registered in the name of the transferee in the deeds office.
Section 16 of the Deeds Registries Act 47 OF 1937 (the “Deeds Registries Act”) provides that ownership of land (immovable property) may be conveyed from one person to another only by means of a deed of transfer executed or attested by the registrar.
It is clear from section 16 of the Deeds Registries Act that only once the property has been transferred into your name, you may be declared the owner of such immovable property.
CONCLUSION
A person only qualifies as the owner of immovable property in South Africa if such a person has successfully complied with the two elements of the abstract theory of ownership. Therefore, only if a person and the owner of the property enter into a written agreement in line with the formalities of section 2(1) of the Alienation of Land Act and further cause for the immovable property to be registered in their name at the deeds offices in South Africa, may such a person become the owner of immovable property.
As such, it is important to understand that until the two elements are satisfied, the person does not own the immovable property, even if the first element was satisfied and all the person’s obligations
therein were met, in such an instance the person will only have a claim against the owner of the immovable property but not a claim to the actual ownership of the immovable property, unless if there was a real right registered and reserved in his/her favour.
Lastly, if for any reason you transfer your immovable property or a portion thereof to someone else without the intentions of having such a person as the sole owner or joint owner of the immovable property, it is important to note that once the two elements have been complied with, you will no longer be the sole owner of such immovable property, irrespective of what your intentions were, unless you declare that the element(s) were fraudulent or against public policy.
