Branch LPI

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DEPARTMENT OF LAND AFFAIRS
Presentation to the Portfolio Committee on
Agriculture and Land Affairs on the Sectional
Titles Amendment Bill 2006 B.. 2006 by
the Chief Registrar of Deeds Sam Lefafa Date 24
May 2006
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BACKGROUND

• The Sectional Titles Act is the legislation
  governing apartments, flats, townhouses, office
  blocks, shopping centers and other building
  developments where multiple owners hold a type of
  property ownership known as a sectional title.

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BACKGROUND(Contd)

• A sectional title scheme is made up of
  individual ownership of a defined section, such
  as an apartment or flat, plus shared ownership
  with other owners of shared areas known as
  common property, such as lobbies, lifts,
  driveways, parking areas, etc. The sections plus
  the undivided shares in the common property are
  known as units.

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BACKGROUND (Contd)

• A body corporate is a collective of all the
  owners of a sectional title development. The body
  corporate manages and makes decisions about the
  building development and in particular the common
  property.

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BACKGROUND (Contd)

• The sectional title form of ownership is
  complex. Changes to the way it is applied, or to
  the type of use it applies to, can give rise to
  issues requiring review including proposals for
  legislative amendments.

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Sectional Titles Regulation Board (STRB)

• Section 54 of the Sectional Titles Act
  established a Sectional Titles Regulation Board
  (STRB) comprising Government officials and
  certain external stakeholders to advise and
  recommend to the Minister measures to improve the
  workings of the Act including amendment to
  legislation and regulations.

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Sectional Titles Regulation Board (STRB)

• Issues usually considered by the STRB are,
  broadly speaking, the technical and legal aspects
  of creating and dealing with sectional title
  units, and the rights and responsibilities of
  owners of units and the body corporate.

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CLAUSE 1

• CURRENT POSITION
• The definition of a sectional mortgage bond
  provides for a registered lease to serve as
  security under a sectional mortgage bond.
  
• PROBLEMS ENCOUNTERED
• This may be interpreted as providing for a
  short-term lease to serve as security under a
  sectional mortgage bond. A short term lease is
  not deemed to be immovable property and can not
  serve as security under a sectional mortgage
  bond.
• PROPOSED AMENDMENT
• The proposed amendment to the definition provides
  that a sectional mortgage bond may only be
  registered over long term leases.

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CLAUSE 1

• CURRENT POSITION
• The definition of a sectional mortgage bond
  does not provide for the registration of a
  mortgage bond over exclusive use areas, which
  areas are part of the common property and for the
  exclusive use of the owner of the relevant
  section in the scheme, i.e. balconies, gardens,
  garages, etc.
• PROBLEMS ENCOUNTERED
• This causes practical difficulties due to the
  connection between exclusive use areas and the
  relevant sections in a sectional title scheme.
• PROPOSED AMENDMENT
• The proposed amendment provides for mortgage
  bonds to be registered over exclusive use areas.

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CLAUSE 1

• CURRENT POSITION
• The definition of Surveyor-General contains
  reference to the Land Survey Act No. 9 of 1927
  which Act was repealed and replaced by the Land
  Survey Act No. 8 of 1997.
• PROPOSED AMENDMENT
• The proposed amendment of the definition of
  Surveyor-General is a necessary and
  consequential amendment.

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CLAUSE 2

• CURRENT POSITION
• SECTION 15B(5)
• Section 15B(5) provides for the registration of a
  certificate of registered sectional title in
  respect of a joint owners share in a unit (in
  other words, the issuing of a separate title deed
  to an owner for his/her share in a unit).
• Section 15B(3) does not provide for the
  registration of a sectional title deed in respect
  of a joint owners share in an exclusive use area
  or a real right reserved under section 25(1) of
  the Act.

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• CLAUSE 2
• PROBLEMS ENCOUNTERED
• The joint holder of an exclusive use area or real
  right reserved under section 25(1) of the Act, is
  not in a position to obtain a separate title deed
  for his/her undivided share.
• For a joint owner to deal with his/her share in
  an exclusive use area or real right reserved
  under section 25(1) of the Act, it is necessary
  that a separate title deed be issued.

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CLAUSE 2 PROPOSED AMENDMENT Clause 2 of the
Bill proposes the provision of the registration
of a certificate of real right in respect of a
share in an exclusive use area or a right
reserved under section 25(1) of the Act.
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CLAUSE 3

• CURRENT POSITION
• SECTION 26
• Section 26 empowers a body corporate to purchase
  land to extend the common property.

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CLAUSE 3 PROBLEMS ENCOUNTERED The Act does not
provide for the acquisition of land in any other
manner, for example, by donation, exchange or
bequest.
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CLAUSE 3 PROPOSED AMENDMENT Clause 3 of the
Bill seeks to empower the body corporate to
acquire land by other means.
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CLAUSE 4

• CURRENT POSITION
• The proviso to section 36(2) refers to a lease of
  a unit contemplated by paragraph (b) of the
  definition of owner.
• The definition of owner has since been amended
  by the deletion of the reference to a lease of a
  unit but, unfortunately, the proviso to section
  36(2) has not been amended accordingly.

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• CLAUSE 4
• PROPOSED AMENDMENT
• The proposed deletion of the proviso to section
  36(2) of the Act is a necessary and consequential
  amendment.

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CLAUSE 5

• GENERAL AMENDMENT
• Various sections of the Act make reference to the
  Land Survey Act, 1927 (Act 9 of 1927), which was
  repealed by the Land Survey Act, 1997 (Act 8 of
  1997). The Act, therefore, needs to be amended
  by the substitution for the expression Land
  Survey Act, 1927, of the expression Land Survey
  Act, 1997, wherever it appears in the Act to
  reflect the correct statutory situation. Clause
  5 of the Bill provides therefore.

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THE END