The Namakwa District Municipality donated houses in the former mining town of Nababeep to their occupiers, including the respondents, subject to a registered condition prohibiting sale or alienation for five years from the date of donation (17 November 2003). Before the five-year period expired and before transfer into their names was registered, the respondents sold their house to the appellants for R50 000, receiving a deposit of R15 000. Transfer into the respondents’ names occurred on 22 May 2007, with the restraint against alienation recorded in the title deed. The appellants tendered payment of the balance and sought transfer, but the respondents refused, alleging that the sale was invalid due to the restrictive condition. The appellants relied on a waiver of the condition by the municipality, evidenced by a letter from an authorised municipal official stating that the municipality waived the restriction and had no objection to the sale.
The appeal was upheld with costs. The order of the Northern Cape High Court was set aside and replaced with an order dismissing the sellers’ appeal with costs, effectively restoring the magistrate’s order compelling transfer to the appellants.
The case clarifies South African law on the effect of registered restraints against alienation, confirming that such restraints do not necessarily render a sale void and may be waived if imposed for the benefit of a specific party. It reinforces the distinction between contractual validity and enforceability and confirms that beneficiaries of restrictive title conditions, including municipalities, may waive them informally.