1 The Sectional Title Amendment Bill, 2003 (“The Bill”) Land Affairs Presentation by Hennie Geldenhuys & Sunday Ogunronbi

2 1. Objectives of the Bill To streamline the application of the Sectional Titles Act, (Act No. 95 of 1986) (“the Act”) for registration purposes and public benefit; To expedite the development and extension of sectional title schemes for public benefit; To clarify processes for the benefit of owners and bodies corporate; and To generally make the Act more user friendly.

3 2. Discussion of Contents of the Bill Clause 1: Amendment of definitions in Section 1 of the Act for clarity purposes. Definition of “owner” includes a superfluous reference to “notarial bonds”. A notarial bond hypothecates movable property. The Act does not deal with movable property but immovable property. Clause 1(a) provides for the deletion of “notarial bonds” in the definition of “owner”.

4 2. Discussion of Contents of the Bill (cont.) Clause 1: (cont.) Definition of “unanimous resolution” leaves room for misinterpretation and uncompromising owners to stall the amendment of management rules and/or improvements on common property. Clause 1(b) clarifies the position with regard to a body corporate’s right to approach the court for relief, and not to rely only on Rule 71 with regard to arbitration.

5 2. Discussion of Contents of the Bill (cont.) Clause 2: The deletion of a section which is redundant. Subsection (5A) of Section 4 repeats, in a different manner, what is contained in Section 7(2) of the Act. Clause 2 provides for the repeal of Subsection (5A) of Section 4 and helps to have a more user friendly Act.

6 2. Discussion of Contents of the Bill (cont.) Clause 3: The deletion of redundant provisions. Paragraphs (a)(i)(bb), (a)(ii), (a)(iii), (a)(iv), (c) and (d) of Subsection (2) of Section 7 of the Act are a repetition of Paragraph (a)(i)(aa) of Subsection (2) of Section 7 of the Act. Clauses 3(a) and 3(b) provide for the repeal of these superfluous paragraphs and helps to have a more user friendly Act.

7 2. Discussion of Contents of the Bill (cont.) Clause 4: The amendment of the Heading of Section 17 of the Act for clarity purposes. The heading of the section currently reads “Dealings with common property” whereas the content of the section relates only to the alienation and letting of common property. Clause 4 provides for the substitution of the current heading, that is incongruous with the provision of the relevant section, with the following heading: “Alienation and letting of common property”

8 2. Discussion of Contents of the Bill (cont.) Clause 5: The alignment of the provisions of Section 24 with the Afrikaans text of the Act and the repeal of redundant provisions. Section 24(3), which deals with extension of section, refers to the “limits” of a section which is capable of misinterpretation and inconsistent with its Afrikaans counter part. Clause 5(a) makes provision, for the sake of clarity and consistency, for the substitution of the word “limits” with the words “boundaries or floor area”.

9 2. Discussion of Contents of the Bill (cont.) Clause 5: (cont.) Subsections (1) and (2) of Section 24 were repealed in Clause 5(b) makes provision for the repeal of paragraph (b) of Subsection 24(6) which is redundant as a result of the repeal of Subsections (1) and (2)

10 2. Discussion of Contents of the Bill (cont.) Clause 6: The substitution of the heading,the alignment with a related section, the omission of reference to a repealed section, the promotion of gender equality, the substitution of a Latin phrase with its English counterpart and other consequential amendments.

11 2. Discussion of Contents of the Bill (cont.) Clause 6: (cont.) Section 25 of the Act deals with the extension of schemes. The current heading of Section 25 of the Act gives the impression that a scheme can only be extended by the addition of sections. Clause 6(a) provides for the amendment of the heading.The new heading now reads: “Extension of schemes by addition of sections and exclusive use areas.”

12 2. Discussion of Contents of the Bill (cont.) Clause 6: (cont.) Section 25(10) of the Act does not make provision for the lodgment of the bond to which a right of extension may be subject. The relevant bond must be lodged for the purposes of effecting the necessary endorsements thereon. Clause 6(b) provides for the insertion of paragraph (dA) to remedy this omission and to clarify registration procedures.

13 2. Discussion of Contents of the Bill (cont.) Clause 6: (cont.) Clause 6(c) provides for the amendment of Paragraph (c) of Section 25(11) which amendment is consequential to the insertion of paragraph (dA) in Section 25(10) and also makes the paragraph more gender sensitive.

14 2. Discussion of Contents of the Bill (cont.) Clause 6: (cont.) Paragraph (b) of Section 25(15) of the Act refers to a repealed section. Clause 6(d) provides for the omission of the reference to the repealed section, the substitution of a Latin phrase with its English counterpart and makes it more gender sensitive.

15 2. Discussion of Contents of the Bill (cont.) Clause 7: Mechanism for incorporating the conditions of new land that is to be added into a scheme. Section 26 of the Act deals with extension of schemes by the addition of land to common property. Clause 7 provides for the lodgment of prescribed documents, which will be prescribed in the regulations, to incorporate new conditions into the Section 11(3)(b) schedule.

16 2. Discussion of Contents of the Bill (cont.) Clause 8: Mechanism for disposal of exclusive use areas, promotion of gender equality and consequential amendments. Section 27(1)(a) of the Act makes the linking of exclusive use areas to section compulsory thus creating marketing problems. Clause 8(a) makes the linking of exclusive use areas optional to solve the marketing problem for developers and to benefit prospective buyers.

17 2. Discussion of Contents of the Bill (cont.) Clause 8: (cont.) Clause 8(b) provides for the amendment of Section 27(1)(b) of the Act which is consequential to the amendment of Section 27(1)(a) with regard to the optional linking of exclusive use areas to sections.

18 2. Discussion of Contents of the Bill (cont.) Clause 8: (cont.) Developers often get deregistered whilst there still remain exclusive use areas registered in their names. This leaves the exclusive use areas without a person that can cede them to the body corporate as provided for in Section 27(1)(b)of the Act. Clause 8(c) provides for the insertion of paragraphs (c), (d) and (e) in Section 27(1) to make provision for the vesting of remaining exclusive use areas in the name of the body corporate and the procedures to be followed.

19 2. Discussion of Contents of the Bill (cont.) Clause 8: (cont.) Clause 8(d) provides for the insertion of paragraphs (b), (c) and (d) in Section 27(4) of the Act to make provision for the vesting of exclusive use areas in the name of the body corporate, and the procedures to be followed, in the case where a member of the body corporate ceases to be the owner of a section as contemplated in Section 36(2) of the Act whilst there still remain exclusive use areas registered in his/her name.

20 2. Discussion of Contents of the Bill (cont.) Clause 8: (cont.) Normally at the opening of a sectional title register one certificate in terms of which all exclusive use areas are held is issued to the developer.The Act does not provide for obtaining separate titles at a later stage. Clause 8(e) provides for the insertion of Subsection (7) in Section 27 of the Act to make provision for obtaining separate titles.

21 2. Discussion of Contents of the Bill (cont.) Clause 9: The amendment of Section 37(2) of the Act to clarify the identity of the person liable for the payment of levies. The persons who were owners when the contribution became due are not necessarily the persons who were owners at the time of passing the resolution to levy the contribution. Clause 9 amends Section 37(2) by replacing the words “when such contribution became due” with the words “such resolution was passed”. The liability is linked with the time of the resolution and not the time when the contributions fall due.

22 2. Discussion of Contents of the Bill (cont.) Clause 10 relates to the short title of the Act.

23 The Sectional Title Amendment Bill, Thank You !