Possession and holdership

01 August 2023
Acquisition of possession and holdership
• Acquisition of possession and holdership is substantially different from the
acquisition of ownership in that the actual transfer of ownership does not
take place.
• Thus the emphasis is on the different elements of possession and
holdership to determine if and how it is acquired.
Elements of possession and holdership
1 Control
2 Corpus
3 Animus
4 Direct and indirect control
5 Shared control
Different elements of possession or
holdership
1 Control
• Control was discussed in various sections before and it was shown
that control is a consequence of delivery in the acquisition of
ownership and that the way in which an asset is controlled may
indicate the difference between ownership, possession and
holdership.
• Control has two elements, the physical element and the mental
element, which are also elements of possession and holdership.
Different elements of possession or
holdership cont…
• Therefore in order to determine if possession or holdership was acquired,
the first element to consider is the:

(a)control over the asset,

(b)how the control was acquired and
(c)what the intention was when the control was acquired.
• In the built environment such control is often given to someone else when
for example a construction contract is signed and the control over the land
is given to the contractor for purposes of the construction, or when a lease
is signed and the control is passed to the tenant for occupation of the
building.
Different elements of possession or
holdership cont…
2 Corpus
• Corpus or the physical element of acquisition of possession or holdership is the
actual way in which control is acquired.
• In the examples in control, it was mentioned that control could be passed to a
contractor or a tenant, without transferring ownership.
• In the case of the contractor, the lease would probably state that there is a site
hand-over date, on which date the owner will physically hand over the keys to the
gate of the property to the contractor, or specifically point out that the contractor
can start to work on that date.
• In the case of the lease agreement, the tenant would similarly receive the keys to
the property on a specific date stated in the lease agreement as the occupation
date.
• The physical action of handing over the property or asset, or any instrument to
control the asset is the corpus element of acquiring possession or holdership.
 Different elements of possession or
holdership cont…
3 Animus
• Animus or the mental element of acquisition of possession or holdership refers to the intention with
which control was acquired.
• This largely will distinguish the difference between possession and holdership and will also
distinguish it from ownership.
• With reference to the mentioned examples of construction contract and lease agreements, it is also
possible to determine the attitude with which the asset is controlled.
• In the case of the construction contract, the agreement would state the terms of the contract,
stating that the purpose of transferring control is with the intention of the contractor performing
construction work.
• Therefore the mental attitude is stated in the contract that the control is for a specific purpose and
for a specific period of time.
• Due to the fact that the mental attitude is that the control is given to the contractor to perform
construction work, it is identifiable as holdership and not possession.
• In the case of the lease agreement also the agreement states the terms of contract which reflects
the mental attitude that control is transferred for purposes of use and occupation, but not to take
ownership, again it points to holdership rather than possession.
Different elements of possession or
holdership (aspects of animus)
• Certain aspects of animus should be taken into consideration when
determining whether control points to acquisition of possession or
holdership, mentioned as follows (Van der Walt & Pienaar, 2009:187):

(a)Mental capacity is required

• Conscious control is required
• Intention to hold for a principal is insufficient for own control
• A specific intention with regard to control is required, namely,
(b)intention to hold as owner, or
(c)intention to hold for one’s own benefit
• Nobody can change the nature of control simply by means of a change in the
intention
Different elements of possession or
holdership cont…
4 Direct and indirect control
• When an asset is controlled directly, the control is physically exercised by
oneself in person.
• Indirect control is when somebody else is exercising physical control, but
one has control over that person.
• This would typically be when a construction company is considered to have
control over a construction site, but the company is not exercising the
control directly.
• Instead it has employees in direct control of the site (typically a site agent)
that are being controlled by way of instructions from the directors of the
construction company.
• The company (directors) would therefore have indirect control over the site
Different elements of possession or
holdership cont…
5 Shared control
• Shared control is when two or more people would have simultaneous
control over the asset.
• Typically the construction manager and the site agent both have keys
to the site and can therefore access the premises independently
without being interfered with by the other.
• They would than share the control over the site
Thank you for attending