In this article we are taking a look at the Sectional Titles Amendment Bill 2020 (“the Bill”) and the proposed changes it will bring. The Bill was introduced by the Minister of Agriculture, Land Reform and Rural Development to the National Assembly on the 2nd of November 2020. The Bill has not yet become law.

The Bill aims to amend the Sectional Titles Act No 95 of 1986 (“the Act”) with the objective of rectifying any shortfalls in the Act by refining certain definitions and providing clarifications of certain sections by the addition of words and sub-sections.

  1. WHY IS THERE A NEED FOR AN AMENDMENT BILL?
  • The Act is quite comprehensive in its application to the opening and amendment of sectional schemes. However, one can argue that it creates confusion when the Act finds application to a developer who wishes to amend a scheme, as the procedure for a developer to do so will differ from that of an owner. In various sections of the Act, it fails to mention the route to be taken by a developer to make amendments to a scheme. The Act mostly refers to the owner of a section and the actions the owner must take, thereby leaving sections of the Act ambiguous. The Bill seeks to alleviate these ambiguities by providing much needed context.
  • The Bill further addresses lack of processes in certain cases where documents or deeds have been lost or destroyed, or amendment or cancellation of sections or exclusive use areas by an owner or developer and matters connected therewith.
  1. PROPOSED AMENDMENTS
  • DEVELOPERS OF SECTIONAL SCHEMES
  • Amendment of Sections 21, 22, 23 and 24 by insertion of Subsection (1A) and (3A):
  • Sections 21 (1), 22(1), 23(1) and 24 (3) all provide for the procedure to be taken if an owner undertakes to subdivide, consolidate or extend his/her sections in the sectional scheme. However, the procedure to be taken by the developer who wishes to do the same is not discussed.
  • The insertion of Subsections 21(1A), 22 (1A) & (2A), 23(1A) & (2A) and 24(3A) & (6AA) provides for a developer to submit a plan to the Surveyor General, prior to the establishment of a body corporate, for approval to subdivide, consolidate or extend his/her sections. The Bill goes further to require that, where such application is made by the developer, it must be accompanied by an affidavit confirming that no unit in the scheme has been alienated. The Act will further provide that, if a unit has been alienated by the developer to a third party with no mention of the subdivision, consolidation or extension, such agreement shall be voidable at the option of the purchaser.
  • Amendment of Section 27 by addition of Subsection (5A):

Section 27 (5) states that an owner may cancel a mortgaged exclusive use area by way of a notarial deed of cancellation entered into between the owner and the body corporate with the written consent of the mortgagee.  The section however does not address what the process is where the developer is the owner and a body corporate has not been established yet. Therefore, Subsection (5A) provides for an exclusive use area to be cancelled by way of unilateral notarial deed, if cancelled by the developer with the written consent of the mortgagee.

  • SECTIONAL PLANS
  • Amendment of Section 7 by a substitution of Section (2)(a):

The amendment of the section provides for when draft sectional plans are submitted for the opening of a sectional scheme and the Act requires a certificate by an architect or land surveyor that is in line with the relevant town planning scheme.  The Bill further proposes that such a certificate issued by an architect or land surveyor must also comply with Section 26(6) of the Spatial Planning and Land Use Management Act, 2013 (SPLUMA).

  • Amendments of Section 14:

The section is amended simply by the addition of words and a Subsection (8)(b) to provide for the amendment of sectional plans in respect of exclusive use areas and further to provide for the amendment and cancellation of sectional plans upon the issue of a court order.

  • LOST OR DESTROYED DOCUMENTS
  • Amendment of Section 15B by addition of Subsection (e):

The Bill proposes the procedure for the noting of a title deed in respect of the lapsing of a real right of extension in terms of Section 25 of the Act by a developer or body corporate respectively, and what procedure to follow where the title deed to such real right has been lost or destroyed.

  • Amendment of Section 22, 23 and 24 by addition of Subsection (cA) & (dA):

The addition provides for circumstances where applications are made for the subdivision, consolidation or extension of a section where a lease or other deed embodying a real right is registered over the section to be subdivided, consolidated or extended, and where such lease or deed is not available, an affidavit by the owner or developer is required whereupon the Registrar will endorse the deeds registry duplicate thereof.

  • Amendments of Section 25 by addition of a Subsection (2A):

The proposed addition of Subsection(2A) states that when there is a Section 25 real right of extension and any documents relating to such right have been lost or destroyed, the developer or body corporate may make written application for the replacement of such documents in the relevant sectional title register.

  1. CONCLUSION

The Bill proposes various other amendments to the Act which are not discussed in this article but which are also of importance in the pursuit of complete and comprehensive legislation. Once the National Assembly has reviewed the Bill in detail and finalized all public comments on the proposed amended Bill, the documents will be circulated to the National Council of Provinces and thereafter signed into law by presidential signature.

 

Lisa Radyn     

LLB

Associate

Property and Commercial Law 

E-mail: lisar@sstlaw.co.za

Phone: 012 361 9823