A notarial bond is a bond hypothecating movable assets of a debtor as security in favour of a creditor. Like a mortgage bond, a notarial bond serves as a real right of security in terms of which the mortgagee has preference over all other creditors from the proceeds of sale of the bonded assets. 

A Notarial Bond is drawn up by a legal expert namely, a Notary, and registered in the Deeds office.

Notarial bonds may be a general notarial bond hypothecating all movables assets of the debtor or a special notarial bond which hypothecate specific assets. One can also register a general and special notarial bond in favour of the mortgagee to provide greater security.

The bond serves as security for the fulfillment of the debtor’s (mortgagor’s) obligations to the creditor (mortgagee) failing which the mortgagor consents to the his/her obligations being discharged from the proceeds of sale of the movables assets hypothecated in the notarial bond.
Assets that can be hypothecated in terms of a notarial bond include:

a) Corporeal assets such as furniture, vehicles, goods of a business and even livestock
b) Incorporeal assets such as unregistered long or short term leases, liquor licences, shares in a company, goodwill of a business and much more.

The different types of notarial bonds that can be registered are:

1. Ordinary notarial bonds that secure existing debts
2. Notarial covering bonds that cover future or existing and future debt
3. Notarial collateral bonds that constitute additional security to an existing mortgage or notarial bond
4. Notarial surety and notarial indemnity bonds
5. Notarial debenture bonds

Contact us for more information on the requirements, registration process and costs.

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