Please note that since this book was last published in 1997 some of the laws that have been referenced may have changed. We
are doing our best to update the articles, however, it is advisable that you to consult an attorney before relying on any information contained herein.
One of the principles of South African law of property is that
the owner of land on which a building stands is also the owner of
the building.
Because of this, it used to be impossible for, say, a man to
own a single flat unless he was prepared to buy the whole block.
This position changed with the passing of the Sectional Titles
Act, 1971 (which was repealed by the Sectional Titles Act, 1986).
In terms of the Act, you can now own a part or section of a
building, together with joint ownership of the land on which the
building stands as well as common parts of the building that have
been set aside for your exclusive use (in partnership with the
other owners of flats in the block).
Your sectional title flat guarantees you security of
occupation and enables you to invest in property. Also, many
sectional title developments are conveniently close to schools,
shops and places of employment. A sectional title flat - and
other forms of high-density housing, such as cluster housing,
duplexes and maisonettes - can be attractive alternatives to the
traditional free-standing home.
The sectional title scheme
Because not every block of flats or building may be suitable
for division into sections, the Sectional Titles Act does not
allow the owner of a block to divide it in any way and at any
time.
The owner must first get the approval of the local authority,
which will not approve a sectional title scheme unless it is
completely satisfied that the scheme does not conflict with any
proposed or existing approved town-planning scheme.
Once a sectional title scheme has been approved, a draft
sectional plan prepared by a land surveyor or architect must be
submitted for approval to the Surveyor-General. If permission is
subsequently given, the developer must apply to the Registrar of
Deeds for the registration of the sectional title plan (which
should give the name of the scheme).
The Act prohibits the selling, advertising for sale and
granting of any options before the opening of the sectional title
register and the registration of the sectional title plan.
On applying for the opening of the sectional title register,
the developer can impose a condition conferring rights to the use
of exclusive common property on the owner(s) of a particular
section or sections of the block.
Once the scheme has been approved and the sectional title
register opened in the Deeds Registry, the buildings on the land
are deemed to be divided into sections and common property as
shown on the sectional plan. If you owned a particular section,
you would have exclusive rights to your section - that is, the
dwelling unit in which you actually live. In the case of the
corridors, lift shafts, parking lots, driveways and gardens,
which also form part of the block (even though they are not part
of the individual dwelling sections), each owner of an integral
dwelling section has an undivided share in that common property.
The Act refers to a section, together with its undivided share
in the common property, as a 'unit'. Ownership of the unit can be
transferred from one person to another by an endorsement made by
the Registrar of Deeds on the title deed. Sectional title
property may also be bonded.
The body corporate
The Act creates what is known as a body corporate to control
and manage the property and to attend to matters of common
interest to all the flat owners.
When you buy a unit in the building, you become part of the
body corporate as soon as that unit is registered in your name.
In fact, a body corporate is simply the representative of all the
registered or leasehold owners (not lessees or lessors of the
block). The developer is a member of the body corporate only
until the last unit is sold. Note, however, that a developer who
retains one or more of the units or repurchases any of them will
remain a member of the body corporate.
In law, a body corporate is viewed as a 'separate person' (juristic person) capable of suing
and being sued in its own name. The Sectional Titles Act
specifies certain duties that the body corporate must perform as
regards the management, administration and maintenance of the
common property and the insuring of the entire building against
fire and other risks (for instance, public liability).
In terms of the Act, the body corporate must establish a fund
big enough to pay for the repairs, upkeep, control, management
and administration of the common property. Reasonable provision
must also be made for future maintenance and repairs as well as
for the payment of rates and taxes, other local authority charges
on the building and land, and electricity, gas, water or
sanitation bills. Income is derived from levies paid by owners of
units in the building. (Until the purchaser of a unit becomes the
registered owner or leasehold owner thereof, a 'levy' is paid in
the form of occupational rent agreed to between the parties in
the deed of sale.)
Lawns, gardens and playing facilities on the common property
must be maintained and the building must be cared for in the
mutual interest of the unit holders.
The body corporate also has the power to do any of the
following things:
- Employ agents to carry out its duties;
- Employ a person or people to look after the property;
- Buy sections of the building itself and let them out;
- Purchase extra land;
- Designate part or parts of the common property to an
owner or owners - provided the whole body unanimously
agrees.
Control of the body corporate
PARTICIPATION QUOTA The size of flats in a
block often differ considerably. Some people may have large,
spacious flats while others have tiny ones. It is for this reason
that the Act provides for unequal votes among members of the body
corporate. Members with bigger units have greater voting powers
than those with small apartments. This demarcation is known as
the participation quota and it determines the value of the vote
of the owner of a section and that person's share in the
undivided common property. The participation quota also
determines how large a share of the administration and
maintenance expenses each owner must bear and, if the body
corporate cannot pay its debts when it is called upon to do so,
each owner's share of that debt.
The rules for determining the participation quota can be
changed by a unanimous resolution of the body corporate.
TRUSTEES A trustee of a sectional title body
has similar duties to those of, say, a director of a company -
control over the day-to-day running of the business and the power
in certain circumstances to make decisions on behalf of the body
corporate. The number of trustees for a sectional title block is
decided upon by the body corporate at a general meeting at which
no fewer than two trustees should be present. Nominations must be
in writing and must include the written consent of the person
nominated.
Until trustees are elected, the developer (or a nominee of the
developer) automatically assumes the position of chairperson of
the trustees. Thereafter, the developer (or the developer's
nominee) must stand for re-election if this person wishes to
continue serving in this post. The majority of trustees must be
owners or the nominees of owners. The trustees are allowed to
appoint an alternative trustee, who need not necessarily be an
owner of a unit, but who, nevertheless, will have the same status
as other trustees.
Trustees hold office until the annual general meeting, at
which point they must vacate their positions. They may, however,
stand for re-election. A managing agent may not serve as a
trustee.
Unless it is decided otherwise, trustees who are owners are
not entitled to payment for their services. However, the body
corporate may reimburse them for any reasonable expenses
incurred. Trustees who are not owners may be paid at the rate
agreed upon by the body corporate.
Generally, a trustee, agent or other representative of the
body corporate is indemnified against liability for costs,
losses, expenses and claims incurred in the performance of his or
her duties - as long as these are not incurred through
negligence.
After elections, the trustees will generally elect a
chairperson at their first meeting. If a chairperson were to
resign before completing a term of office, or is removed from
this position by the body corporate, the trustees may choose
another chairperson. If a chairperson is temporarily absent from
meetings, the trustees may appoint an acting chairperson.
Decisions at meetings of the trustees are taken by a majority
vote. Subject to any restrictions imposed at a general meeting of
the body corporate, the trustees can administer and manage the
common property and perform any of the duties of the body
corporate and meet in any manner they deem fit.
They must, however, keep minutes of their proceedings and of
general meetings of the body corporate. Money received and spent
must also be carefully accounted for and properly audited
accounts must be presented at each annual general meeting. Any
unit owner or person authorised in writing by an owner can
inspect the books of account at reasonable times.
There are a number of ways in which trustee vacancies can
occur, including:
- When a trustee hands in a written notice of resignation
to the body corporate;
- If a trustee is of unsound mind;
- If a trustee has had his or her estate sequestrated (see insolvency);
- If a trustee has been convicted of an offence involving
dishonesty;
- If a trustee is removed by a resolution of a general
meeting of the body corporate;
- If a trustee is disqualified in terms of the Companies
Act from serving as a director of a company.
The body corporate has the right to appoint a replacement
trustee at a general meeting.
Meetings of trustees
QUORUM A quorum is formed when 50 per cent of
the trustees (but not fewer than two) are present at a meeting.
Any documents of the body corporate must be signed by a
trustee and the managing agent, or, alternatively, by two
trustees when a certificate is issued in respect of moneys paid
to the body corporate on the transfer of a unit. If the number of
trustees falls below a quorum, at least two remaining trustees
may appoint or co-opt additional trustees to make up a quorum or
to call a general meeting of owners.
MEETINGS A meeting of owners must be held
within 60 days of the formation of a body corporate. Owners must
be given at least seven days' written notice of the meeting, a
copy of the agenda and an indication of the nature of the
business to be conducted.
Trustees have the right to call a special general meeting
whenever they think it is necessary. Fourteen days' notice of
such a general meeting must be given. Other information on the
meeting must include the venue (it must be in the magisterial
district in which the scheme is located), the date, the time and
the nature of the meeting. A meeting may be convened at shorter
notice if all persons who are entitled to attend agree.
Holders of mortgage bonds over the various units, who have
informed the trustees in writing of their interest in the units,
must also be informed of general meetings.
A special general meeting called to pass a unanimous or
special resolution must be convened within 30 days of notice
being given to all members of the body corporate. In an
emergency, a meeting may be convened in a shorter time. In blocks
of 10 units or less, a quorum for a general meeting must consist
of at least half of the persons entitled to vote, in person or by
proxy. In a complex consisting of a maximum of 50 units, the
presence of 35 per cent of the owners at a meeting is needed for
a quorum; in a block of more than 50 units, 20 per cent of the
owners will make up a quorum. If a quorum is not obtained within
an hour of the start of a general meeting, the meeting will be
adjourned by a week. If a quorum still cannot be formed, the
persons present who are entitled to vote will constitute a
quorum.
Voting is usually carried out by a show of hands, but any
owner or person representing an owner by proxy can request a
secret ballot. If a secret ballot is requested, the chairperson
must lay down the procedure for the poll. If voting is equally
split, the chairperson is entitled to a casting vote in addition
to a deliberate vote.
Duties of owners
Because the owners of the various units live closer to each
other than they would have had they been living in free-standing
homes, certain limits have been placed on their rights. For
instance, if you're an owner, the body corporate can force you to
comply with its rules - by application for a Supreme Court interdict if necessary. Other
rules that you may have to observe include:
- Allowing any person authorised in writing by the body
corporate to inspect your section at reasonable hours and
to enter it for maintenance purposes;
- Maintaining your section and using the common property
without unreasonably interfering with the use and
enjoyment of it by other owners or persons lawfully on
the premises;
- Not using your section or permitting it to be used in a
manner that creates a nuisance for the occupier of
another section;
- Notifying the body corporate of any change of ownership -
for example, if you transfer ownership to another person
or mortgage your section;
- Carrying out any work ordered by a competent public or
local authority in respect of your section.
The body corporate can make other rules governing your conduct
as an owner of a unit. However, if they do not, rules set out in
a schedule to the Sectional Titles Act will apply. Generally, in
terms of the rules in the Act, you are bound to heed the
instructions of the trustees in the follo-wing circumstances:
- You cannot keep or do anything on the common property
after being instructed not to do so by the trustees. For
instance, you cannot keep an animal in your section or on
common property if you have been asked not to do so;
- You cannot do anything that will increase the insurance
premium payable by the body corporate. For example, you
cannot store an inflammable substance in your section;
- You cannot allow your section of the building to be used
for any purpose that may be injurious to its reputation.
Note that you are, generally speaking, not bound to improve
the common property. If, however, a special resolution is passed
at a general meeting of the owners to improve the common
property, you will be bound by the will of the majority.
Conversion of share block to sectional title
If you're a share-block schemeI member, you can acquire title
to the unit you occupy only if the scheme is converted to
sectional title. Both the Share Blocks Control Act, 1980, and the
Rent Control Act, 1976, make provision for rights in a flat under
the share-block system to be converted to sectional title -
provided it complies with all the other requirements of the
Sectional Titles Act and provided the local authority approves.
If at least 30 per cent of the members of a share-block scheme
wish to apply for the opening of a sectional title register, or
if the directors wish to make application, a general meeting of
shareholders must be called.
If the building is mortgaged, the bondholder's consent to the
proposed conversion must be obtained. Shareholders must be given
full particulars of the proposed scheme at the meeting.
A resolution to open a sectional title register in place of
the share-block scheme can proceed only with the support of at
least 50 per cent of the members who, together, hold at least 30
per cent of the total votes of company members.
