Embarking on a sectional title development is a sophisticated investment strategy which transforms a single piece of land into a thriving community of individual owners. However, transitioning from conventional land ownership to a structured scheme requires meticulous legal planning and a comprehensive understanding of South African property law.
Unlike a standard subdivision (where sold portions of property are owned entirely and independently by the buyer), a sectional title unit involves a blend of individual ownership and collective responsibility. Owners hold title to their specific units while sharing ownership of common property, all managed by a Body Corporate.
Due to the fact that establishing a sectional title scheme requires precision at every turn, we have mapped out a clear path to assist you in successfully navigating the process with confidence.
Legal Framework and Preliminary Approvals
Every sectional title scheme must be developed in strict accordance with the Sectional Titles Act.[1] Before breaking ground, a developer must ensure that the proposed development aligns with local by-laws and the Local Authority’s Town Planning Scheme.
Key preliminary requirements include:
- Spatial Planning and Land Use Management Act (“SPLUMA”) Consent: Obtaining authorization / consent from the Local Authority in terms of the SPLUMA.[2]
- Mortgagee Consent: If the land is currently bonded, the bank or financial institution holding the mortgage must formally consent to the opening of the register.[3]
Essential Steps for the Developer
To move from a vision to a registered scheme, developers should follow these fundamental steps:
- Zoning Verification: Confirm the land is correctly zoned for the density and number of units intended.[4]
- Architectural Consultation: An architect must draft the development plans. If you intend to sell units “off-plan,”[5] the architect must provide a site plan and floor plan for the sales agreements.[6]
- Schedule of Finishes: For off-plan sales, a detailed schedule of finishes[7] must be attached to the sale agreement, as transfer only occurs once the unit is complete.[8]
- Land Surveyor Engagement: Once the building structures are erected (specifically the walls), a Land Surveyor drafts the Sectional Title Plans.[9] These plans define the name and layout of the scheme, the number of buildings, the extent of each section, and Exclusive Use Areas (such as specific parking bays or gardens).[10]
- Phased Development: If you plan to build in stages, your Conveyancer and Land Surveyor must cater for this in the initial sale agreements and sectional plans to ensure future phases are legally protected.[11]
- Establishing Rules: Body Corporate rules will need to be included. You must decide between using the statutory rules provided by the Sectional Titles Schemes Management Act[12] or drafting customized rules. Custom rules must be approved by the Ombuds Council (“CSOS”) before any transfers can occur.[13]
- Surveyor General: Once the Land Surveyor has drafted the Sectional Title Plans, they have to be submitted to the Surveyor General for the Surveyor General’s approval.[14]
Registration and the Role of the Conveyancer
Once the Surveyor General approves the sectional plans, the Conveyancer takes the lead. They apply for the registration of the plans and the opening of the Sectional Title Register at the Deeds Office.
At this moment, the land ceases to be conventional property and transforms into sectional property. The developer is then issued Certificates of Registered Sectional Title for each unit.[15] From here, units can be transferred to individual buyers, or often simultaneously with the opening of the scheme.
The Birth of the Body Corporate
The moment that the first unit is transferred from the developer to a new owner, the Body Corporate is legally established. The developer then has 60 days to convene the first general meeting with the new owners to discuss levies and handover management.[16]
Failure to hold this meeting is a serious matter, and under the Sectional Title Schemes Management Act, a developer who neglects this duty is guilty of an offense and may face fines or imprisonment not exceeding 2 years, or possibly even both.[17]
At this meeting, the developer must provide:
- The approved sectional plan and all local authority building plans.[18]
- A clearance certificate confirming all rates have been paid up to the date of the Body Corporate’s establishment.[19]
- Proof of revenue and expenditure from the date of first occupation.[20]
- Technical documentation: “As-built” plans[21] for pipes and wiring, warranties and/or guarantees, manuals for construction, and a list of all contractors involved.[22]
Partner with the Experts
The legal complexities of sectional title developments leave no room for error. From initial zoning to the final handover of the Body Corporate, every step requires expert legal oversight to protect your investment and ensure compliance with the Sectional Titles Schemes Management Act[23] and Prescribed Management Rules.
Don’t leave your development to chance. Contact Adriaans Attorneys today for professional, comprehensive legal assistance in opening your sectional title scheme and let us walk this road with you. Our team of specialist conveyancers is ready to ensure your project is built on a solid legal foundation.
[1] 95 of 1986. [2] Section 33(1) of the Spatial Planning and Land Use Management Act 16 of 2013. [3] S 11(3)(d) of the Sectional Titles Act 95 of 1986. [4] S 7(2)(b) of the Sectional Titles Act 95 of 1986. [5] This is the sale of a property before construction is finalised or even commenced, where the property is sold based “off” the architectural plans. [6] S 6 of the Sectional Titles Act 95 of 1986. [7] A schedule of finishes is a detailed guide explaining the specifications of building materials, fixtures and fittings that are installed throughout the sectional title property. [8] S 33 of the Sectional Titles Act 95 of 1986. [9] S 5(1) of the Sectional Titles Act 95 of 1986. [10] Exclusive Use Areas (such as parking bays, carports, and gardens) may either be allocated by the Body Corporate for exclusive use, or registered on the sectional title plans and owned together with the unit. This must be disclosed to the conveyancers and Land Surveyor, as it affects the transfer and registration process. [11] S 25 of the Sectional Titles Act, 1986. [12] Act 8 of 2011. [13] Vahlati Investments (Pty) Ltd v Royal Palm Body Corporate (2021) ZAKZPHC 28: the adjudicator of the Community Schemes Ombud Service declared the body corporate’s AGM was void and found Management Rule 57(2)(c) invalid for non-compliance with the Sectional Titles Schemes Management Act 8 of 2011. This confirms that sectional title scheme rules must comply with both the Community Schemes Ombud Service Act 9 of 2011 and the STSMA. [14] S 7 of the Sectional Titles Act 95 of 1986. [15] “Certificate of Registered Title” is the title deed which proves ownership of the land. [16] The trustees appointed by the owners are expected to assume full control over the management and administration of the scheme. [17] S 2(8)(a) and Section 2(10) of the Sectional Title Schemes Management Act 8 of 2011. [18] S 2(8)(c)(i) Sectional Title Schemes Management Act 8 of 2011. [19] S 2(8)(c)(ii) Sectional Title Schemes Management Act 8 of 2011. [20] S 2(8)(c)(iii) Sectional Title Schemes Management Act 8 of 2011. [21] Final plans showing how a structure was in fact built, as opposed to prior plans which were potentially originally designed in a different way. [22] S 16(4) of Sectional Title Schemes Management Act: Regulations, 2011. [23] Act 8 of 2011.
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While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of the articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes and should not be construed as legal advice.
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