Month: March 2022

Notarial Bonds

Posted by nnlaw on March 28, 2022 with 0 Comment

A Notarial Bond is a form of security for a creditor and is registered in the Deeds office (in Bulawayo or Harare). A Notarial Bond is registered over the movable property of a debtor that they have put up as security for the obligations that they have to the creditor in terms of the loan agreement, attested to by a Notary Public. Notarial Bonds are a means of credit diversification as it enables some of the marginalized groups to get access to credit. It is common cause that not everyone owns immovable property hence Notarial Bonds aid these groups of people as they can use their movable property to gain access to credit. Notarial Bonds are placed in two broad categories:

General Notarial Covering Bond
Special Notarial Covering Bond

WHAT YOU NEED TO KNOW ABOUT NOTARIAL BONDS

Prescription

A Mortgagee’s right to claim from the mortgagor in relation to a Special Notarial Covering Bond persists for a period of 30 years, n advantage for the creditor. These are not affected by the prescription of ordinary debts.

Registration Costs

The registration costs for the Bond are incurred by the Mortgagor, and are calculated against the value of the property in terms of a Tariff gazette from time to time.

Access to assets

The debtor offers their movable property as security, but remain with the use and enjoyment of their property, as long as they adhere to the payment terms of the loan. The creditor only gets access to the property in the event of default by the debtor.

Secure in Law

In the event of default by the debtor, the creditor may use the Notarial Bond as prima facie (on the face of it) evidence in Court to receive recourse in the Magistrate Court or High Court.

FREQUENTLY ASKED QUESTIONS ON NOTARIAL BONDS

A Notarial Bond is a form of security for a creditor and is registered in the Deeds Office. A Notarial bond is registered over the movable property of a debtor that they have put up as security for the obligations to the creditor in terms of the loan agreement.

Q: WHO CAN DRAFT A NOTARIAL BOND?

A: A Lawyer that is also registered as a Notary Public can draft a Notarial bond. This is exclusive work that can only be done by a Notary Public.

Q: CAN A NOTARIAL BOND BE REGISTERED IN RESPECT OF IMMOVABLE PROPERTY?

A: Yes – although a Notarial Bond can only be registered in respect of immovable property over which the owner does not have real rights but only personal rights. An example of immovable property that can be used is property which is owned under a Cession Agreement.

Q: WHY ARE NOTARIAL BONDS REGISTERED?

A: They are a way of ensuring financial inclusion, as not every owns titled immovable property.

A: Convenience created for the debtoras the property is not delivered to the creditor upon registration.

Q: ARE THERE DISADVANTAGES WITH NOTARIAL BONDS?

A: They rank lower than other forms of security – a Mortgage Bond is endorsed on Title Deeds to announce to the public that the property is encumbered and would need to be cancelled first before new actions were taken over the property, which is the converse of the level of security offered by a Notarial Bond.

A: Confers personal rights which are only enforceable against the parties and no one else.

Q: CAN A NOTARIAL BOND BE VARIED?

A: Yes. A consent to variation must be drawn up and signed to highlight that position. Where the Notarial Bond is in favour of a Company, a resolution needs to be drawn and signed to the extent of the variation.

Q: AFTER HOW LONG DO CLAIMS ARISING FROM NOTARIAL BONDS PRESCRIBE?A: The rights of a party to claim against a Notarial Bond lapses after 30 years.

Alternative Dispute Resolution

Posted by nnlaw on March 18, 2022 with 0 Comment

There are five methods that can be used, associated with dispute resolution:

NEGOTIATION

This is the informal bargaining that takes place directly between the parties to the dispute for the sole purpose of coming up with a solution for the situation at hand. In some instances, parties may opt to have legal representation in a bid to find an amicable solution. In the event that parties do not reach an understanding the parties may then go on to the next stage which is MEDIATION.

2. MEDIATION

Is a process in which a neutral third party (one that has no direct interest in the outcome of the matter) known as a mediator helps the parties to negotiate and resolve their disputes. The mediation process is a very delicate one that requires the objective third party to continuously go back and forth between the parties relaying information in a bid to resolve the dispute. The success of the process is premised on the attitude of the parties as well as the element of confidentiality especially by the mediator. The mediator has two main roles

To identify the root cause of the dispute,
Prompt parties to reach a solution (mediator does not impose or suggest solutions but rather encourages the parties to reach a solution)

3. FACILITATION

This process is very similar to mediation however this process revolves around resolving the problems that are faced by groups of people

4. CONCILIATION

This is a process where parties to a dispute try to reach an agreement through the aid of a conciliator (impartial third party). The conciliator will advise both parties of their rights but leave the ultimate resolution of the matter in the hands of the parties.

5. ARBITRATION

This is a formal process of resolving a dispute. An arbitrator is appointed and parties have to present their case before the Arbitrator who will then weigh the facts and make a ruling which shall be binding on the parties. For some institutions arbitration is their port of call as compared to the courts and as such in the event of breach of either party to an agreement it may be disputed that the dispute shall be resolved by way of arbitration.

Property Rights In Zimbabwe

Posted by nnlaw on March 18, 2022 with 0 Comment

In Zimbabwe every person has the right to own property as evidenced in terms of Section 71(2) of the Constitution which states that “every person has the right, in any part of Zimbabwe to acquire, hold, occupy, use, transfer, hypothecate, lease or dispose of all forms of property, either individually or in association with others”.

The Constitution further goes on to uphold the property rights of the people in terms of Section 74 which reads “no person may be evicted from their home, or have their home demolished, without an order of Court made after considering all the relevant circumstances”.

Did you know that property rights in Zimbabwe are not absolute?

Property rights in Zimbabwe are not absolute as provided for in Section 71(3) of the Constitution. This provision justifies the deprivation of property rights under the grounds that the deprivation is in terms of law of general application; is necessary for public safety, public order, public interest, defense or so as to use the property for the benefit of the community. The case of Zimbabwe Tobacco Company v Minister of Lands & Rural Resettlement is a good illustration of land being compulsorily acquired for public interest as the land was acquired to facilitate urban development and combat overpopulation.

In terms of Section 72 of the Constitution it is highlighted that all agricultural land vests in the state meaning not all agricultural land can be privately owned. Compensation for land that has be reclaimed by the state is given only in instances where proof is shown of improvements having been effected on the land.. Section 72 (3)(b) “no person may apply to court for the determination of any question relating to compensation, except for compensation for improvements effected on the land before its acquisition, and no court may entertain any such application” hence highlighting that property rights are not absolute and aggrieved parties have no recourse in the courts, save for the one exceotion.

The principle of eminent domain, is the inherent powers of a government entity to take privately owned property, especially land, and convert it for public use and enjoyment. In the case of Davies & Ors v Minister of Agricultural and Water Development, It was held that the state has the power to compulsorily acquire the land and regulate it through the principle of omne majus continent in se minus. Another example of the practical application of the eminent domain principle is the issue of the Chisumbanje Ethanol Project where the villagers of that area were recently displaced in a bid to set up a local ethanol plant in order to reduce the importation of ethanol, thereby aiding Zimbabwe’s economy. While one has the Constitutional rights to own property and land throughout Zimbabwe, this right is not absolute and can be limited by the State’s exercise of its eminent domain rights.