By Adjunct Prof Graham Paddock

Prof Graham Paddock
Below is an example of a question on the discussion forum on Paddocks Club. We want to show what is available to our Community Members!

Section 25 right lapsed

Member question:

We have a situation where the Developer reserved a section 25 right of extension of the scheme – this right was reserved for 10 years and lapsed in December 2012. One of the units was subsequently sold and the transfer rejected by the Deeds Office, stating that this section 25 right must first be cancelled. I read section 25 again and in 25(6) it talks about this right lapsing, and then it vests in the body corporate, who needs written consent of all owners and bondholders to “exercise, alienate or transfer” such right. In this case they want to cancel it – how does that work?

Paddocks ClubGraham’s answer:

The developer’s right is a time-limited real right and when it expires it is gone. It appears that the Deeds Office requires the lodgement of an application under section 68(1) of the Deeds Registries Act to note the lapsing of the real right.
The right that vests in the body corporate when a developer’s section 25 future development right expires is not that particular right as defined in the paperwork lodged by the developer for this purpose, but the abstract right to extend the scheme. So to exercise this right, the body corporate would have to start the section 25 process again in its own name.

Missing an Annual General Meeting

Member question:

In a Commercial Body Corporate, no Annual General Meeting (AGM) was held at the end of the 2012 financial year. The AGM for 2013 has now been called and will be held shortly. PMR 51(1) states that the AGM must be held within four months after the financial year-end, but does not stipulate the consequences for not holding one.
I am sure one of the owners will raise the fact the no AGM was held in 2012. What are the consequences of this?


Anton’s answer:

There is nothing in the Act or prescribed rules that directly specifies any consequences for failing to hold an AGM. Of course, the AGM should have been held and if an owner raises the point at the AGM, agree with him or her that it happened and is regrettable.
There is no “punishment” for not holding the AGM. If any owner is prejudiced or has suffered loss or damage because of it, they are entitled to seek redress from an arbitrator or the court.

Article reference: Paddocks Press: Volume 8, Issue 7, Page 4

 

Adjunct Professor Graham Paddock is available to answer questions on the discussion forum for Community Members of Paddocks Club. Get all your questions answered by joining Paddocks Club at www.PaddocksClub.co.za.


This article is published under the Creative Commons Attribution license