What is a Sectional Title Unit?

• A Sectional Title Unit consists of a section of a building/s or various buildings on a piece of land demarcated on a sectional plan drawn by a land surveyor, together with an undivided share in the common property. All the sections together with common property comprise "the Scheme" hereinafter referred to as "the complex".
• Before a developer is able to erect a sectional scheme (but not for registration purposes), council has to rezone the property from residential to special residential/commercial.

Important to Know and Understand the Following

1. Difference between UNIT and SECTION
2. What does a SECTIONAL PLAN look like?
3. What does it mean to own “undivided share”

What is the Common Property?

• This comprises the areas which are utilized by all owners, e.g. the grounds, driveways, roads, recreation facilities, corridors, entrance areas and exterior of the building i.e. whatever does not constitute a section.

Important to Know and Understand the Following

The common property is owned by the Body Corporate, in title.

What are Exclusive Use Areas?

In certain instances parts of the property e.g. parking bay and garden area may be delineated as an exclusive use area and the right to the exclusive use of such area is conferred on an owner of a section. Exclusive use rights can be acquired and held in terms of the rules applicable to the Complex or by way of Notarial Cession as exclusive use rights. In many instances areas which appear to be exclusive use may in fact be rented from the Body Corporate in which case they do not enjoy the status of "exclusive use rights".

Important to Know and Understand the Following

Exclusive use areas DO NOT BELONG to the owner. Exclusive use areas belong to the Body Corporate and only the USE of the marked area belongs to the owner.

Is Ownership Acquired of the property purchased under Sectional Title?

• Yes. Ownership rights are registered in the Deeds Office and a Title Deed (or Notarial Cession in the instance of certain exclusive use areas) is issued upon registration of the Sectional Title Unit as proof of ownership.
• No ownership passes of a parking bay when such parking bay was allocated for use by a unit owner in terms of the rules applicable to the Complex.
• THIS IS IMPORTANT AND MUST BE CHECKED AND NOTED ON THE AGREEMENT. UNIT GARAGE STORE ROOM SERVANT’S ROOM COVERED PARKING OPEN PARKING GARDEN/ YARD Identifying Number
  No according to Sectional Plan
  = EXCLUSIVE USE AREAS WHETHER REGISTERED NOTIARIALLY AS SUCH, IN TERMS OF THE RULES OF THE BODY CORPORATE, OR SO ALLOCATED BY THE BODY CORPORATE FROM TIME TIME (in which case a letter is required from the Body Corporate’s Managing Agents confirming that such areas will exclusively be available to the Purchaser once registration of transfer has been effected)

in the Sectional title Scheme known as

(Sectional Title No. SS__) together with corresponding share/s in common property apportioned to that Section in accordance with the participation quota endorsed on the said Sectional Plan.

What is a Registered Real Right of Extension?

• This is a right of extension reserved by the developer of the scheme to extend the scheme within a certain period by the addition of certain units and/or buildings for his own account. The plans of the proposed extension must be drawn and approved at the time that the scheme is registered. If the right of extension is not exercised or reserved, the right to extend the scheme vests in the Body Corporate. Any prospective purchaser must be made aware of the existence of a reserved right of extension in the Deed of Alienation failing which he/she is entitled to resile from the contract.

Important to Know and Understand the Following

HOW WOULD ONE KNOW WHETHER A REAL RIGHT OF EXTENSION IS REGISTERED OR NOT?

Who Controls the Complex?

• The Body Corporate is responsible for the control, administration and management of the Complex.
• Trustees (owners of units in the Complex) are appointed to ensure such management is effectively exercised. One would look at the management and conduct rules of the scheme to establish whether the Trustees are/are not allowed to do certain things or make certain decisions.

What is the Body Corporate?

All the owners of sections in the Complex constitute the Body Corporate. At an Annual General Meeting of all the owners, Trustees are elected to carry out the day to day running of the Complex. In many instances and especially with bigger Complexes, the Trustees utilize the services of a Managing Agent to assist them. Ultimately the control lies with owners in a general meeting.

What are Levies??

The levy comprises all the anticipated costs of the running of the Complex and usually includes:

• water;
• electricity and repair costs relating to the electrical installation in the common area;
• insurance replacement costs of buildings in the Complex;
• managing agent fee;
• annual audit fee.
• security and maintenance costs

How is the amount of the Ordinary Levy Determined?

The Trustees will calculate the total annual budget required for the running and maintenance of the Complex. The budget will be made up from inter alia the items mentioned above. The annual total is reduced to a monthly budget which in turn must be collectively paid by the individual owners. The levy payable by any one owner is calculated by the percentage of the floor area of that owner's section to the total floor area of all the sections in the Complex, otherwise known as the participation quota. Thus:

Total Annual Budget Required Monthly Budget _ =

Floor area of Mr X's Section Percentage of Monthly Budget __ x 100 =
Total floor area for all sections payable by Mr X

What are "Special Levies"?

• In the event that insufficient funds are available for maintenance and/or improvements, a special levy may be raised by the Body Corporate at a general meeting. Owners of sections will thereupon be liable to make a further contribution which may be payable in instalments. The questions of liability for and disclosure of an existing or possible special levy should be dealt with in the deed of sale.
• Who is responsible for the special levy payment if the levy is raised after the agreement was signed but before the transfer is registered?

What are Management Rules?

The Sectional Title Act contains provisions regarding the management of the Complex, e.g. how Trustees are elected, what the obligations of the Trustees are, what the voting procedure is at general meetings, etc. It is possible for the Body Corporate, by unanimous resolution to amend, substitute, add to or repeal the Management Rules from time to time. These are available for inspection at the Deeds Office. Please see annexure.

What are Conduct Rules?

Each Complex has a set of conduct rules to regulate the conduct of owners in the Complex to ensure acceptable behavior by all the owners, e.g. rules regarding keeping of pets, refuse removable, etc. It is possible for the Body Corporate, by special (75% majority) resolution to amend, substitute, add to or repeal the conduct or rules from time to time. Please see annexure.

Can Unit be Consolidated, Extended or Subdivided?

Yes, but only after:

• the approval of the Body Corporate; • the approval of the Local Authority; • a sectional plan of subdivision / extension has been drawn by a land surveyor and approved by the Surveyor General; • an application to the Deeds Office to register the extension or subdivision has been made.

• Please see annexure to determine the difference between a SPECIAL RESOLUTION, ORDINARY RESOLUTION or UNINIMOUS RESOLUTION and when these are required.

Please consult our pamphlet on conveyancing as it also applies to sectional title transfers.

Possible Problems:

• Damp caused in an apartment as a result of a water leak in the apartment above;
• Damp caused in the apartment as a result of a water leak in the balcony above, which balcony is common property and not part of the upstairs apartment;
• Damages to window frames;
• The use of garages/parking bays, which are sold with the unit and which has never been registered as EUA or unit and belongs to the Body Corporate. This comes to light 3 or 4 transfers after the original transfer from developer;
• The REAL RIGHT OF EXTENSION (which was registered for 25 years) has now expired;
• You have enclosed the parking bay without the permission of the Body Corporate or you bought the enclosed parking bay and find out that it was enclosed without the permission of the Body Corporate;
• There is a problem with the overall security in the complex and you withhold your levy/portion thereof until the security is addressed;
• If the Body Corporate goes insolvent or when the Body Corporate needs to issue summons against an owner who has defaulted in respect of his levy.