For the first time since 2010 amendments were made to the Sectional Titles Act. The Bill was sent through for comments in October 2012 already and everyone sort of forgot about it when the Act was passed quietly while everyone was on holiday on 18 December 2013.
Most of the amendments have no effect on Managing Agents and Trustees’ daily lives but we would like to summarize them all for those interested. If you are only interested in what will make a direct impact on the day to day management of your scheme you only need to read the amendments made to section 25 subsections (1) and (4) that deals with the extension of a scheme by adding sections and/or exclusive use areas.
• Section 1 – The definition of an “architect” was amended – The definition before it was amended refers to an Act of 1970 that has since been repealed by a new Act in 2000. In addition there has been uncertainty of which architects are qualified to sign certificates stating that a proposed division into sections and common property is not contrary to any operative town planning scheme, statutory plan or conditions subject to which a development was approved in terms of any law that may affect the development. The proposed amendment provides clarity in this regard.
• Section 1 – The definition of “developer” was amended – The definition before it was amended provided for the purposes of sections 10 and 15B(3)© of the Act, for the inclusion of an agent or his or her successor in title, or any other person acting on behalf of any of the abovementioned persons, to act on behalf of the developer. However this definition did not include the developer’s agent or his or her successor in title in respect of the approval of development schemes, as contemplated in section 4 of the Act. This amendment provides for such inclusion.
• Section 1 – The definition of “land surveyor” was amended – The amendment was made to clarify which land surveyors may sign a section 7(2)(a) certificate, similar to the position of architects as discussed in the first amendment paragraph. It is also intended to reflect the correct short title of the Professional and Technical Surveyors’ Act, 1984 (Act No 40 of 1984)
• Section 4 – The amendment of section 4(3) of the Act is consequential to the amendment of the definition of “developer” that provides for the inclusion of any agent or his or her successor in title, or any other person acting on behalf of any of the abovementioned persons to act on behalf of a developer.
• Section 14 – This section deals with the amendment and cancellation of sectional plans. However the Act was silent before on a procedure to follow with regard to the cancellation of a sectional plan upon an order of the court. These amendments give a prescribed manner to be followed for the cancellation of such plans.
• Section 15 – Subsection 7 was added – Section 15B(5A) of the Act provides for the issuing of a certificate of registered sectional title in respect of a fraction of an undivided share of a section, but there was no corresponding provision for an owner to make an application for that certificate.
This is a purely technical conveyancing amendment that inserts the provision for an owner to make that type of application and deals with the supporting documents that must be lodged for this purpose as well as the endorsements and other entries the Registrar must make when processing the application.
• Section 17 – a number of amendments were made here to address and rectify some issues:
o Section 17 was silent with regard to the lodgement of the consent of owners of sections and holders of registered rights over sections with the registration of a transfer of a part of the common property. It also did not provide for the lodgement of the relevant title deeds of the sections and real rights for the purpose of endorsement to reflect the new extent in the amended participation quota schedule, as a result of the transfer of a part of the common property. The amendments in subsection 4A paragraph (b) address this situation.
o Section 17 also make provision for the cancellation of the registration of a section or part thereof, as well as the cancellation of the registration of an exclusive use area or part thereof, with the registration of a transfer of a portion of the common property. The section, however did not provide a mechanism for the alienation of a portion of the common property on which a real right of extension or part thereof is registered. The insertion of subsection (4C) rectifies this situation.
o Section 17(5) of the Act provides for the title deeds of units, title deeds of rights over such units and the title deeds of exclusive use areas to be logged for cancellation upon transfer of the whole of the land comprised in the common property. It was however silent with regard to the consent of holders over registered rights over exclusive use areas and the lodgement of such title deeds for purposes of cancellation. The amendments to subsection (5) address this issue.
• Section 18 – This section makes the provisions of the Deeds Registry Act, 1937 (Act No 47 of 1937) applicable with the transfer of a mortgaged unit and mortgaged common property, and
Cession of a mortgaged lease of a unit and mortgaged real right over a unit. It was however silent in respect of the cession of mortgaged real rights of extensions and mortgaged real rights of exclusive use areas. The amendments to section 18 provides for the necessary inclusion.
• Section 19 – This section deals with the expropriation of common property or rights therein, as well as the cancellation of the registration of a section affected by such expropriation. The Act however did not provide for the cancellation of the registration of part of a section pursuant to an expropriation. The amendments to subsections (4) and (5) rectifies this.
• Section 25 – a number of amendments have been made to section 25 – that is the right to extend the scheme by adding more units and/or exclusive use areas.
o Section 25(1) of the Act provides for the extension of schemes upon unanimous resolution of the Body Corporate and bondholders. However, bondholders do not form part of the “unanimous resolution” of a Body Corporate. The amendment of section 25(1) to provide for the consent of the bondholders that exist on the date of the taking of the unanimous resolution clarifies the position.
o Section 25(4) of the Act provides for a right of extension, as reserved by a developer in terms of section 25(1) or vested in a Body Corporate in terms of section 25(6), to be deemed immovable property that is capable of being mortgaged and transferred. Section 25(4), however did not include a right of extension that may be obtained by a developer in terms of section 25(6A). A section 25(6A) right of extension may be obtained in instances where a developer has not reserved such right in terms of section 25(1) and where a Body Corporate has not been established. The amendments to subsection (4) rectifies the situation.
• Section 25 and 27 – The Act provides for the issuing of more than one certificate of real right of extension and more than one certificate of real right of exclusive use areas at the opening of a sectional title register. The amendments made to section 25 subsections 10 and 11 and also to section 27 rectifies this position
Trust this clarifies the recent amendments to the Act for you.