Branch LPI

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DEPARTMENT OF LAND AFFAIRS
Presentation to the Portfolio Committee on
Agriculture Land Affairs on the Sectional
Titles Amendment Bill 2005 B10 2005 by
Sunday Ogunronbi George Tsotsetsi April 12,
2005
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Ad Clause 1

• A. Current Position
• The definition of exclusive use area contains
  reference to exclusive use areas contemplated in
  section 27 of the Act only.
• B. Problem Encountered
• The definition of exclusive use area does not
  make reference to rights of exclusive use
  conferred in terms of section 27A or other parts
  of the Act. This causes interpretation problems
  in the application of the management and conduct
  rules.
• C. Proposed Amendment
• Clause 1 seeks to correct this ambiguity and
  introduce more certainty in the meaning of
  Exclusive Use Area.

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Ad Clause 2

• A. Current Position
• Section 24 of the Act provides for the extension
  of the boundaries or floor area of a section in a
  scheme by the owner of the section. The body
  corporate, by a special resolution of its
  members, must approve the extension and a draft
  sectional plan of the extension must be submitted
  to the Surveyor-General by a land surveyor or
  architect. If the deviation in the participation
  quota of a section is more than five per cent as
  a result of the extension, the mortgagee of each
  section in the scheme must consent to the
  registration of the sectional plan of extension
  of the section.

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Ad Clause 2 (Contd)

• B. Problem Encountered
• Interpretation problems are experienced with
  section 24(6)(d) of the Act because it is not
  clear whether the percentage deviation relates to
  the participation quota of the individual section
  concerned, or to all the participation quotas of
  the sections in the scheme.
• Also, the low percentage referred to in this
  section also makes the process of an extension of
  a section time-consuming and expensive.

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Ad Clause 2 (Contd)

• C. Proposed Amendment
• The proposed amendment is necessary to clarify
  the uncertainty pertaining to the participation
  quota and to save time and cost by increasing the
  deviation percentage to 10 percent.

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Ad Clause 3

• A. Current Position
• Section 25 provides for the extension of schemes
  by the addition of sections but does not place an
  obligation on a developer to register a new
  extension in a scheme.
• B. Problem Encountered
• Apartments in such extensions are usually let by
  a developer without the developer being obliged
  to contribute to the levy fund of the body
  corporate i.r.o the land as developed but
  contribute for undeveloped land.

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Ad Clause 3 (contd)

• C. Proposed Amendment
• Clause 3 of the Bill seeks to oblige a developer
  to register such extensions in which case the
  developer will then also be liable for the
  payment of levies, for the land as developed.

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Ad Clause 4

• A. Current Position
• Section 27 of the Act provides for the
  registration of rights of exclusive use of parts
  of common property in the name of an owner of a
  scheme.
• B. Problem Encountered
• Section 27(6) of the Act does not sufficiently
  provide for the burdening of an exclusive use
  area with a real right. This situation creates
  practical problems in instances where exclusive
  use areas are bequeathed subject to a personal
  servitude such as usufruct, usus or habitatio.
• C. Proposed Amendment
• Clause 4 of the Bill seeks to extend the types of
  real rights in order to eliminate these problems.

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Ad Clause 5

• A. Current Position
• Section 36(7)(a) of the Act determines that a
  developer must convene a meeting of members of
  the body corporate not later than 60 days after
  the establishment of the body corporate. A
  developer who fails to comply with any of the
  provisions is guilty of an offence and liable on
  conviction to a fine not exceeding R1000. At the
  meeting the members must be furnished with a copy
  of the sectional plan, a certificate from the
  local authority that all rates due by the
  developer up to the date of the establishment of
  the body corporate have been paid and proof of
  revenue and expenditure concerning the management
  of the scheme until the date of establishment of
  the body corporate. The developer must pay any
  residue, as revealed in the proof, over to the
  body corporate.
• B. Problem Encountered
• A developers obligations in terms of the Act are
  often not being complied with and the penalty
  stipulated in section 36 appears not to be an
  effective deterrent.

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Ad Clause 5 (Contd)

• C. Proposed Amendment
• Clause 5 proposes the inclusion of imprisonment
  for a period not exceeding two years in line with
  Section 1 of the Adjustment of Fines Act (Act No
  101 0f 1991).

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Ad Clause 6

• A. Current Position
• Section 47 of the Act empowers a creditor of a
  body corporate to apply to court for the joinder
  of the members of the body corporate in their
  personal capacity and as joint judgment debtors
  in instances where a judgment against a body
  corporate remains unsatisfied.
• B. Problem Encountered
• An unfortunate position in sectional title
  schemes is that members of the body corporate
  (owners) are individually liable pro rata for any
  debt incurred by the body corporate. This,
  effectively, means that the failure of an owner
  to contribute to the levy fund becomes the
  liability of the body corporate and consequently,
  that judgment by a creditor can be obtained
  against the body corporate.

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Ad Clause 6 (Contd)

• C. Proposed Amendment
• It is necessary to protect owners from losing
  their units in instances where a judgment debt
  against a body corporate remains unsatisfied and
  owners had paid their levies prior to the
  judgment given in favour of the judgment creditor.

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• WE THANK YOU