WELCOME TO SECTIONAL TITLE

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WELCOME TO SECTIONAL TITLE

• Always remembering
• the late

BOB GAULD
the GURU
of SECTIONAL TITLE
my MENTOR
WE MISS YOU!!!
Bob used to say
The wise is he who knows, he doesn't know
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Many thanks to.
Marina Constas and Karen Bleijs for
allowing me to use the fantastic cartoons in
their book
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WHEN DID IT ALL START?

• Sectional Title ownership was introduced to South
  African homeowners in 1973.

The 1971 Act came into force in 1973 after which
it was amended several times, before being
replaced on 1st June 1988 by a new Act, the
Sectional Titles Act No 95 of 1986.
This Act, along with several amendments,
including very recent ones is the one that is in
force today.
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But how is a Sectional Title Development
Scheme Structured?
Sectional Title is a form of ownership in which
the owner owns, or holds
TITLE,
to a SECTION
of a building that has been divided into
two or more sections.
A building that has been divided into a number of
sections to be sold under Sectional Title is
known as a
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• Sectional Title Development Scheme,
• usually referred to as a
• SCHEME.
• There is no limit to the maximum number of
• sections in a scheme.

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• What does an owner own?

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• a Section (or sections)

• an undivided share of the
• Common Property

a Unit

AND

• very often parts of the common property is
• allocated to certain owners or units as
  Exclusive Use

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Definition of a Section
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• An owner who owns a townhouse or flat along
  with a
• garage that is shown on the sectional
  plan as being part of
• the section will acquire one section.

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• An owner who owns a townhouse or flat along
  with a
• garage that is shown on the sectional
  plan as a separate
• section will acquire two sections.

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• An owner who owns a townhouse or flat that has
  the
• exclusive use of a garage will acquire
  one section and an
• exclusive use area. As we will see
  later, there are various
• types of exclusive use areas.

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in Sectional Title
SIZE DOES COUNT
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• The participation quota? (PQ)

• An expression of the size of a section in
  relation to the
• sum of the size of all of the
  sections, expressed as a
• percentage to four decimal places.

Example
Floor area of flat (section) 85 m²
Sum total of all floor areas of all sections in
the scheme 11 186m²
To calculate the participation quota
85 m² divided by 11 186m² 0.0075987 x 100
0.7599
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What is the use of the participation quota?
To calculate the financial contribution of each
owner. This include

• Levies

• Special levies

• The portion of an owners liability in case of a
• judgment debt which the body corporate owes
• to a creditor.

- Voting by pole at a general meeting.
- To determine the undivided share in the
common property of each owner of a
section.
Participation quotas are shown on the sectional
plan of the scheme.
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COMMON PROPERTY AND EXCLUSIVE USE AREAS
but
note
Dealing with common property is confusing at the
best of times!
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• What is common property?

• those parts of the scheme that do not form
  part of any section.

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Common Property?
The land included in the scheme
Those parts of the building or buildings that are
not included in a section
Driveways,
gardens,
swimming pools,
corridors,
lifts,
entrance foyers,
parking bays,
garden walls,
outer walls,
foundations,
the roof is all part of the common property.
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• Who owns the common property?

• The COMMON PROPERTY is owned by the BODY
  CORPORATE.

There are no exceptions to this rule! ! !
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WHAT IS THE BODY CORPORATE?
Organigram of a Sectional Title Scheme
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• What is an exclusive use area?

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THE THREE DIFFERENT TYPES OF EXCLUSIVE USE AREAS
1st Allocated under 1971 Act Schedule 1 Rules
2nd First Prize exclusive use
areas Registered under Section 27 of the 1986
Act FULLY OWNED RIGHT
3rd Rule Created exclusive use areas Under
Section 27A of the 1986 Act - Management Rules -
Conduct Rules ?
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• Exclusive Use Areas the three different types

• Registered Exclusive Use

• Rule Created Exclusive Use

• Exclusive Use allocated under the 1971 Rules

• Section 60(3) Current Act

• Section 27 Current Act

• Section 27A Current Act

• How will you know if there is exclusive use?

• In the Conduct Rules?
  Management Rules

• In the rules if the scheme is registered before
  1986 -1988

• On the Sectional Plan

• Does the owner have to pay a levy on the
  exclusive use area?

Yes, no arguments to this, they have to pay
Section 37(1)(b)
Yes, no arguments to this, they have to pay
Section 37(1)(b)
No/Yes, Must be ruled properly it has to be in
the rules that the owner have to pay a levy.
Can the owner sell his interest separately from
his unit?
No it forms part of his unit. But he has the
right to change the type to a Section 27.
No it forms part of his unit. We did included the
option to change the type to Section 27 in some
rules, but we are not sure of it will stand in
court.
Yes, the Rolls Royse of Excl Use. You can bond
it. Its a Real Right which is transferred
between owners by way of a notarial deed of
cession and will show on the Aktex Search .
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Schedule 1 Rules
1st Allocated under 1971 Rules
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2nd First Prize exclusive use
areas Registered under Section 27 of the 1986
Act FULLY OWNED RIGHT

• An owner who owns a townhouse or flat that has
  the
• exclusive use of a garage will acquire
  one section and
• an exclusive use area.

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3rd Rule Created exclusive use under the 1986
Act Section 27A
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Recent amendments to The Sectional Titles Act 95
of 1986, and Annexure 8
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Annexure 8, rule 68
Amended by substitution of rule 68(1)(vi)
Duties of Owners and Occupiers of Sections.
Previous
Amendment
shall not construct or place any structure or
building improvement on his exclusive use area,
without the prior written consent of the
trustees, which shall not be unreasonably
withheld.
shall not construct or place any structure or
building improvement on his or her exclusive use
area, without the prior written consent of the
trustees, which shall not be unreasonably
withheld and that the provisions of section 24
and section 25 or other relevant provisions of
the Act or the rules, will not be contravened.
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Sectional Titles Act 95 of 1986
Amended by substitution of Section (1) definition
of exclusive use areas
Previous
Amendment
exclusive use area means a part or parts of
the common property for the exclusive use by the
owner or owners of one or more sections, as
contemplated in section 27.
exclusive use area means a part or parts of
the common property for the exclusive use by the
owner or owners of one or more sections.
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Sectional Titles Act 95 of 1986
Amended by substitution of Section 27(6) Rights
of exclusive use of parts of common property.
Previous
Amendment
A right to the exclusive use of a part of common
property registered in favour of an owner of a
section, shall for all purposes be deemed to be a
right to urban immovable property over which a
mortgage bond, lease contract or personal
servitude of usufruct, usus or habitatio may be
registered.
A right to the exclusive use of a part of common
property registered in favour of an owner of a
section, shall for all purposes be deemed to be a
right to urban immovable property which admits of
being mortgaged
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Sectional Titles Act 95 of 1986
Amended by substitution of Section
24(6)(d) Extension of sections.
Previous / Amendment
any sectional mortgage bond to which the section
may be subject, together with a certificate by a
conveyancer stating that there is not a deviation
of more than five 10 per cent in the
participation quota of a section or sections any
section as a result of the extension, or if there
is a deviation of more that five 10 per cent,
that the mortgagee of each section in the scheme
has consented to the registration of the
sectional plan of extension of a section and
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EXTENSION OF SECTION
Extension of boundaries or floor area of a
section.
Requirements for approval of extension

• Needs a special resolution of the body
  corporate for approval
• of the extension.

• Needs to have the sectional plan re draft by a
  surveyor or
• architect for submission to and
  approval of the Surveyor General.

• If the deviation in the participation quota of
  any section in the
• scheme is more than 10 per cent as a
  result of the extension,
• the mortgagee of each section in the
  scheme must consent to
• the registration of the sectional plan
  of extension of the section.

• The extension must be approved by the local
  authority and
• comply with the requirements of any
  other relevant law.