however, still be assigned in security, that is, an assignation to the creditor qualified by an undertaking that he/she will retrocess (re-assign) the right assigned when the debt secured is satisfied.

A liferent may validly provide that it is to terminate in the event of

insolvency of the liferenter so as to deprive the liferenter’s creditors of the benefit of the use of the property.155 If the liferent does not so

provide, it forms part of the liferenter’s insolvent estate and vests in the trustee in sequestration. The only way to allow the liferenter to retain the benefit of the liferent after his/her insolvency is for it to be constituted as an (improper) alimentary liferent, which may only be attached by creditors for alimentary debts.156

A proper liferent may be attached by B’s creditors. It is adjudgable.157 The appropriate diligence in respect of an improper liferent will depend

upon the exact structure of the trust and the nature of the liferenter’s right.158

South Africa

Under South African law, a tenant under a lease is entitled to ‘sell’ his/her limited right and then ‘cede’ or ‘assign’ the rights to a cessionary or assignee. By cession, the tenant-cedent divests himself/herself of his/her rights against the landlord and substitutes a third party (the cessionary) as the landlord’s creditor while the tenant remains the landlord’s debtor.159 By contrast, assignment transfers both the tenant’s rights and obligations under the lease to a third party, the assignee. The assignee becomes the landlord’s creditor and by assuming the tenant’s obligations becomes the debtor in place of the original tenant. It is trite law that the transfer of an obligation requires the debtor’s concurrence and therefore an assignment of a lease by the tenant requires the agreement of the landlord, the tenant and the assignee.160

Agricultural leases can only be transferred by sale or otherwise161 with the consent of the landlord. By contrast, urban leases can be freely

155 Gordon and Wortley, Land Law, para. 17–62. 156 Ibid. para. 17–04.

157 Stewart, Treatise Diligence, p. 600. 158 Ibid.

159Floral Displays v. Bassa Land and Estate Co. 1965 4 SA 99 (D) 100H-101A; De Wet and Van Wyk, Kontraktereg, p. 372.

160Cooper, Landlord and Tenant, pp. 245, 258–9.

161Art. 9 Placaet of 26 Sept. 1658; Spies v. Lombard 1950 3 SA 469 (A) 481; Cooper, Landlord and Tenant, p. 260.

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ceded without the co-operation of the landlord,162 leaving him with a choice of tenant (delectus personae) if the cession unreasonably affects his/ her interests.163 Under the Insolvency Act, a stipulation in a lease which restricts or prohibits the transfer of any right under the lease shall bind the trustee of a tenant’s insolvent estate or his/her successor-in-title.164

Assignment effectively creates a new lease between landlord and assignee, and therefore requires the same formalities as for the conclusion of a lease.165 The Deeds Registries Act requires that any cession of a lease shall be notarially executed by both the cedent and the cessionary and registered in the Land Register.166 Registration protects the cessionary and assignee (new tenant) for the remaining period of the lease.

B may mortgage his/her registered lease or sub-lease by the registration of a mortgage bond over the lease or sub-lease.167 This only requires the consent of the landlord if agreed in the lease.168 The Land Registrar must endorse the lease or sub-lease to the effect that it has been mortgaged.169 An unregistered long lease is valid inter partes, and the resulting personal right may apparently be utilised as security by way of cession without the need for registration.170

Roman-Dutch law allowed a tenant, in the absence of a contrary agreement, to create a sub-lease, subject to certain qualifications such as that the sub-tenant had to be a respectable person.171 In South African law, the tenant of urban property may sub-let without qualification.172 There is, however, authority for the view of Voet173 that a tenant may not sub-let if the sub-tenant is so circumstanced (eius conditionis sit) that he/she is more likely than the tenant to damage the property or to use the property for purposes other than those contemplated in the lease.174 For reasons of parity it must be accepted that the landlord has the same delectus personae with regard to a sub-tenant that he/she

162De Wet and Van Wyk, Kontraktereg, p. 329 n. 120; Cooper, Landlord and Tenant, pp. 258–9. In this context ‘assign’ means ‘cede’.

163Cooper, Landlord and Tenant, p. 260. 164 Insolvency Act 24 of 1936, s. 37(5).

165Cooper, Landlord and Tenant, p. 269.

166Deeds Registries Act 47 of 1937, s. 3(p), 77(1) and 80.

167Deeds Registries Act, s. 102 s.v. ‘immovable property’ and s. 81.

168In re Ramasamy Chettee 1902 NPD 289. S. 91 of the Deeds Registries Act 47 of 1937 forbids the registration of the hypothecation of a cession of any registered lease or sub-lease.

169s. 82. See in general Scott and Scott, WilleÕs Mortgage and Pledge, pp. 71, 78.

170Smith v. FarellyÕs Trustee 1904 TS 949.

171See Codex 4.56.6; Voet, Commentarius, 19.2.5; Cooper, Landlord and Tenant, p. 245.

172Cooper, Landlord and Tenant, p. 245 n. 19; De Wet and Van Wyk, Kontraktereg, p. 326.

173Voet, Commentarius, 19.2.5.

174See De Villiers CJ in Henderson v. Hanekom (1903) 20 SC 513, 518.

has with regard to a cessionary. Consequently, his/her right to object to a sub-tenant will not be limited to reasonable apprehension of damage to or misuse of the property by the prospective sub-tenant.175

A sub-lease does not affect the lease between the original landlord and tenant and does not create a contractual nexus between the sub-tenant and the original landlord. A sub-tenant’s right to the property is dependent on and determined by the original tenant’s (sub-landlord B’s) title. The sub-tenant has no claim against the original landlord in respect of the property and the original landlord can eject him/her upon termination of the original lease.176

The highly personal nature of a usufruct prevents it from being transferred as such to a third person. In this sense, the Deeds Registries Act, s. 66 only allows cession of a personal servitude to the nude owner.177 However, the entitlements under a usufruct are transferable and can thus be sold178 or donated.179 The right gained by the third party is,

however, merely contractual and automatically terminates on expiration of the usufruct.180

A usuary is only entitled to use the property and enjoy its fruits for domestic purposes. He/she is not entitled to alienate the use of the property to a third party by sale, gift, hire or otherwise.181 By contrast, the habitator is allowed to rent out the property or to allow a third party to live gratuitously in the dwelling.182

Under the Deeds Registries Act 47 of 1937, the personal servitudes of usufruct and habitation (but not use)183 may be mortgaged separately from the land.184 In practice, however, the enforcement of the mortgage of a personal servitude is problematic because the Deeds Registries Act, s. 66 allows transfer of the personal servitude only to the

175Cooper, Landlord and Tenant, p. 246. See further, pp. 249–57 for sub-letting regulated by agreement (e.g. permission to sub-let, prohibition to sub-let and that, if required, the landlord’s consent should not be withheld unreasonably) and the consequences of breach of such provisions.

176Pothier, Obligations, para. 280; Cooper, Landlord and Tenant, p. 244.

177Deeds Registries Act 47 of 1937, s. 66; Nel, Jones: Conveyancing, p. 213.

178Van der Merwe, ‘Servitudes’, para. 432; Voet, Commentarius, 7.1.32.

179Voet, Commentarius, 7.1 32; Ex parte Wessels 1949 2 SA 99 (O) 104 (Þdei commissarius).

180See Van der Merwe, ‘Servitudes’, para. 432; Durban City Council v. Woodhaven Ltd. 1987 3 SA 555 (A) 561.

181Dreyer v. Ireland (1874) 4 Buch 193 202. 182 Arend v. Estate Nakiba 1927 CPD 8.

183Van der Merwe, Sakereg, pp. 523 and 616.

184Deeds Registries Act 47 of 1937, s. 50(1) read with s. 69(4); Voet, Commentarius, 13.7.2, 20.3.1.

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landowner.185 Apparently, these problems may be avoided by the simultaneous registration of a mortgage over both the land and the usufruct,186 which would allow execution against the land, free from the servitude.187 Since the mortgage creditor cannot have a greater right to the property than the mortgage debtor (the usufructuary), the mortgage is terminated once the usufruct is extinguished by the death of the usufructuary or any other mode of termination.

South African law allows a usufructuary to create a separate limited right in the form of a lease of his/her interest in the residential property or farm.188 The lease will terminate upon the termination of the usufruct, for example, if the usufructuary dies.

Although a usuary is not entitled to lease out his/her interest in the property, South African law allows a usuary of residential property to let out rooms which he/she does not occupy.189 By contrast, the holder of a right of habitation has from early on been entitled to sub-let the property.190

The holder of a personal servitude can never grant more rights than he/she has. The grantee is thus subject to the same remedies available against the usufructuary. Furthermore, on expiry of the usufructuary’s right, for example, on death, the right of the grantee also expires.191

Since a lease is an asset which can be ceded, it can also be attached in execution without an application to court.192 The Land Register, however, must be informed of the execution proceedings.

At common law, the insolvency of the tenant did not terminate the lease.193 The Insolvency Act now provides that the insolvency administrator may terminate the lease by written notice to the landlord.194 Until termination, the insolvency administrator must pay the rent which will be included in the cost of sequestration. On termination, the landlord has a claim against the insolvent estate for compensation

185See Estate Grabe v. Bornman 1938 OPD 127.

186Deeds Registries Act 47 of 1937, s. 69(3).

187s. 3(1)(i) and reg 41(7) of the Regulations under the Deeds Registries Act. See further Lubbe, ‘Mortgage and Pledge’, para. 447.

188Voet, Commentarius, 7.1.32, 19.2.4; Armstrong v. Bhamjee 1991 3 SA 195 (A).

189Setlogelo v. Setlogelo 1921 OPD 161.

190Van der Merwe, Sakereg, p. 524 n. 497; Van der Merwe, ‘Servitudes’, para. 446.

191Voet, Commentarius, 7.1.32.

192High Court Rules r 45(8)(a); Ormerod v. Deputy Sheriff Durban 1965 4 SA 670 (D) 672–3.

193See Norex Industrial Properties v. Monarch SA Ins Co. 1987 1 SA 827 (A) 837D-838G.

194Insolvency Act 24 of 1936, s. 37(1); Montelindo Compania Naviera SA Bank v. Bank of Lisbon and SA 1969 2 SA 127 (W) 140B-H.