In South African law ownership can transfer by means of an original or derivative method. The difference between these two methods is found in the fact that ownership by way of original acquisition proceeds without the cooperation of the previous owner, compared to the derivative method which requires cooperation between the parties.
A discussion of the original method for ownership acquisition falls outside the scope of this article and consequently only examples will be mentioned. They are prescription, attachment and mixing. The basis for original acquisition is that no intention is required between the parties. For example, if you lease a piece of land and later decide to build a swimming pool on it, you will become the owner of the swimming pool as soon as you put the pool in the ground. The only possible remedy here for the lessee will be an enrichment claim. The lessee has to satisfy all the requirements for enrichment before he will be successful with his claim.
The second method for ownership acquisition is by using the derivative method. The main requirements for this form of ownership acquisition are firstly, the parties must have a clear intention to transfer ownership and secondly, there must be delivery or registration of the property. The first requirement is self-explanatory but it is important to be aware that a person’s legal status can play an important role in determining the validity of the transfer. The requirement of delivery only becomes applicable if the parties intend to transfer movable property. There is a variety of different forms of delivery in South African law, but the most important is delivery with the long hand, delivery with the short hand, attornment and constitutum possessorium. The requirement of registration only becomes important when the parties intend to transfer ownership of immovable property. Both delivery and registration must be accompanied with a clear intention to transfer ownership.
It is in the derivative form of ownership acquisition that a distinction should be made between the causal and abstract system. The causal system involves that ownership can only pass if the underlying agreement or obligation is valid. This system practically means that if the party had the intention to transfer ownership but the actual contract is invalid, ownership will not pass.
The opposite view is followed in the abstract system, which is the system that the South African law follows. The abstract system means that even if the underlying agreement or obligation is invalid, ownership will still pass as long as the parties intended that ownership pass, together with the requirement of delivery or registration, whichever the case may be.
The abstract system provides protection to a bona fide third party, where the causal system neglects to provide the same protection. The shortcomings in the abstract system in South African law are, however, compensated for in the field of undue enrichment law.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.