Questions relating to sectional title schemes | Legal Articles


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Questions relating to sectional title schemes

1. What problems arise in exclusive use areas in a sectional title scheme?

Purchasers who lack the knowledge with regards the exclusive use area give rise to various problems that require the explaining of the different rules and regulations of such an area. 

Sectional Title Scheme Exclusive Use Area

The purchaser may be under the impression that they are owners of said area, but rather are only entitled to to exclusive use as long as they are owners in the scheme. 

They may not completely understand the difference between the registration of this area through a notarial deed instead of it being allocated in terms of the rules of the body corporate. 

It is important to note that these areas are still under the control on the acting body corporate for the scheme and so are subject to the rules of the scheme. 

And so any rules that prohibit an owner from doing certain things in their exclusive use area need to be followed. 

2. How can I protect myself, in the event that the buyer feels they didn’t get what they thought they would be getting from the purchase? 

The common property is owned by everyone who own sections within a scheme, however the purchaser may not be aware of this. 

They will need to be informed of all their rights, as well as, familiarise themselves with the Management and Conduct rules associated with these jointly owned areas. 

Generally, the restrictions in this area help to keep the peace within a scheme. 

Aside from the rules, the purchaser should ensure that the scheme is well run by checking the financial statements and most importantly, the reserve fund. 

Knowing the  financial state is a great way to ascertain whether or not it will be a good idea to become an owner in the scheme. 

Before the purchase the buyer should make efforts to inspect the unit and the common property as the physical condition will also determine how the funds are used by the body corporate. 

The body corporate need to see to it that the entire scheme is adequately insured against any potential risks. 

However, the owner needs to make sure that their unit is adequately insured, especially if they make any alterations which could raise the adequate insured amount  necessary to cover the loss.

The contents within the unit aren’t covered by the body corporate insurance and so a separate insurance policy will be needed to cover any loss or damage to them. 

The purchaser should be informed of monthly or any extra costs within the scheme. This will prevent confusion when it comes time for these costs to be paid. 

3. What responsibility do the Body Corporate have within the scheme?

There are various responsibilities that the body corporate need to carry out. 

As there will be debt and various expenses that arise within the scheme, the Body Corporate needs to ensure that there is a fund for all administrative expenses which will adequately cover all costs for expenses of the scheme. 

They need to calculate these expenses and then collect levies which are usually calculated annually. 

All buildings within the scheme have to be insured against fire and other prescribed risks to their full replacement value. 

This along with maintenance of the common property also fall under the responsibility of the body corporate. 

All aspects of running the scheme are handled by the body corporate in line with the direction given by owners at a GM, the Act, and rules of the scheme. 

4. What could cause delays when opening of a Sectional Title Register?

Before a Sectional Title Register can be opened the architect or land surveyor needs to prepare the draft sectional plan. 

He/she will then have certify that such a development will follow any by-laws set out by the local authority of the area which pertain to planning and building regulations. 

A certificate by the local authority will have to be obtained in the event of any non-compliance to allow for the deviation. The relevant surveyor-General would need then approve of the draft sectional title plan before any further actions can be completed. 

Consent will have to be obtained to open the sectional title register if there is a bond over the property. 

Also, any restrictive conditions imposed on the Title Deed which could affect the planned development will have to be removed through application to the High Court or the Department of Traditional and Local Affairs. 

If there are any delays with the processes mentioned, then opening the register will also be delayed.

5. What can be done to protect a buyer from these delays? 

The purchaser can be protected from delays in the process by inserting a clause into the agreement which will entitle them to abandon it upon giving the seller written notice of the decision. 

This is especially necessary when the sectional title registered has to be opened by a specific date and will mean that neither party has a claim for any losses or damages due to the agreement not being fulfilled. 

6. How can a seller ensure that all the rates are paid up in a small scheme so as to protect the buyer be protected, especially where there are no financial statements?

Trustees are obligated to keep records of all the accounts of the scheme in order to be able to track all transactions as well as to show the financial position of the Body Corporate. 

The accounts and records should be kept for 6 years after the transaction took place and they should be available for inspection. 

The seller will need to enquire directly with the Rates Department in the event that no financial statements are available in order to determine if the rates are in arrears or not.

7. Who is responsible for the payment relating to the purchasers request for more information about the sectional title?

It is the responsibility of the purchaser to pay for all costs associated with acquiring the need documentation. 

These may include Body Corporate Rules, the minutes of the latest AGM or Special Meeting or the Financial Statement and Sectional Plan. 

Also, it is important to remember that the documents are only obtained by the conveyancer in the event of a special condition being present in the agreement of sale.

8. What action can a Body Corporate take against an owner of a sectional title unit who is not paying his levies?

The Body Corporate, acting in accordance with Section 37 of the Sectional Titles Act, are able to take legal action against an owner in order to obtain outstanding levies.

9. May an owner be prevented by the trustees from having a pet if the are no restrictions for such?

Owners who wish to keep any animal as a pet in a section will first need to receive written consent from the trustees. 

This is in compliance of the rules of conduct in the Sectional Title Act and if the rules for owning a pet aren’t vocalised or stipulated, then the prescribed rule would apply. 

But if a rule exists which prohibits the owner from having pets in the sectional scheme then this would be the rule that is applied above the prescribed rule mentioned in the Act.

10. Who determines the manner in which each owner pays off the required amount in relation to a special levy?

Depending on the circumstances, the Body Corporate may implement a special levy on top of the normal monthly levy. 

This may be used for the purpose of covering any unforeseen expenses which were not included in the already approved of expenses which were estimated in the last AGM. 

However, if the budgeted expenses exceed the estimated amount that was approved of then the trustees are not allowed to raise a special levy. 

In accordance with the prescribed Management Rule 31(4) of the Act, if a special levy is deemed necessary, then the trustees will need to determine whether it will be paid in one lump sum or through installments. 

Although, it is important to remember that while owners are allowed to pay a special levy in a number of installments, this cannot be an ongoing fee which is paid alongside the ordinary monthly levies for an extended duration of time.

Van Deventer & Van Deventer Incorporated - Attorneys Cape Town

Van Deventer & Van Deventer can provide legal advice with regard to your sectional title scheme, simply contact us.

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