By Anton Kelly
Anton KellyThe Sectional Titles Act and the prescribed rules provide relatively complicated processes for certain operations. Getting everything right depends on a fairly comprehensive knowledge of the Act and rules. In small schemes that don’t employ a managing agent, it is the trustees who need to have that knowledge.Here is an example of how illegal changes were made to a sectional title scheme because the correct procedures were not followed and, as a result, how the owners concerned may suffer material loss.

Mr Brown wanted to extend his flat, but the extension would encroach on a registered exclusive use parking bay. Mrs Jones held the rights to the bay. The trustees showed her a different parking bay that no one used and “gave her permission” to use that one. The chairman signed the application for approval of the building plans and Mr Brown built a second bedroom onto his flat, covering most of the registered exclusive use parking bay. Now, some time later, Mrs Jones wants to sell and wonders whether, when she sells her flat, the new owner will have any legal rights to the bay that she now uses.There are two separate issues here. The first is that Mrs Jones has no legal title to the parking bay she uses and cannot pass those “rights” to anyone who buys her flat. The bay to which she does hold registered rights can no longer be used. The market value of her flat has fallen. The second issue is that Mr Brown’s section was extended illegally. Even though the bedroom was built according to approved building plans, the extension to the section was not approved by the body corporate and no plan of the extension has been approved by the Surveyor General and registered. We know that because the Surveyor General could not approve a plan that showed a section extension encroaching onto a registered exclusive use area.

So how can this situation be fixed?

Firstly, the exclusive use rights must be sorted out. Mrs Jones must cancel her registered exclusive use rights to the parking bay and the body corporate must create rights to the other bay and confer them on Mrs Jones. The body corporate authorises the cancellation by special resolution and, if Mrs Jones has a bond on her flat, her bondholder must also consent. The body corporate must authorise the creation of the new rights and their cession to Mrs Jones by a unanimous resolution. A land surveyor must prepare a draft sectional plan of extension, showing the new exclusive use area. Once it is approved by the Surveyor General, a conveyancer must get it registered at the Deeds Registry together with a notarial cession of the rights to Mrs Jones and the substitution of the new area for the old one in terms of Mrs Jones’ mortgage bond.

Second, the extension to the section must be legalised. The body corporate approves the extension by special resolution. Mr Brown must get his bondholder’s consent and, if the extension changes the participation quota of the flat by more than ten percent, the consent of all the bond holders in the scheme.  An architect must prepare a draft sectional plan of the extension and, once the Surveyor General has approved it, Mr Brown’s conveyancer gets it registered at the Deeds Office.

Oh, and it would be a good idea to get Mr Brown to pay all the costs!

 

Article reference: Paddocks Press: Volume 6, Issue 2, Page 3Anton Kelly is one of the Course Conveners of the University of Cape Town (Law@Work) Sectional Title Scheme Mangement course. The next presentation will start on 20 June 2011.