The proliferation of issues relating to the availability and affordability of housing, especially in cities where space is limited, has solidified the relevance of Sectional Title Schemes. Although these Schemes allow for multiple owners in respect of the same property, they are vastly different from co-ownership, where one property would be jointly owned by several persons. Examples of such Sectional Title Schemes include apartment buildings and townhouse complexes, where each apartment or townhouse unit is owned individually, including exclusive use areas, with common property shared between all sectional owners.
Surprisingly, registration of this type of property wasn’t always possible, with comprehensive regulation only kicking in with the advent of the Sectional Titles Act 95 of 1986 (“the Act”), which came into force on 1 June 1988. As South Africa’s legal system is one with roots in Roman Law, the Roman principle of superficies solo cedit applied to property in South Africa, which stipulated that the owner of land would also own the buildings on that land.[1] While that principle functioned effectively during the time where large freestanding houses were the norm, when apartment blocks became more prevalent, as a result of population growth and urbanisation,[2] a lacuna in the law prevailed.
Apartment blocks initially had a single owner, who would lease out individual units to parties, who would have right of occupation, but no prospect of ownership. Further, in some areas, Share Block Schemes also operated, that allowed for ownership of shares in a company that owned an apartment block and gave right of occupation upon payment of a levy.[3] Share Block Schemes were far more popular before the advent of Sectional Title Schemes, at which point many Share Block Schemes were converted to Sectional Titles.[4]
The appeal of Sectional Title Schemes is that they allow for individual ownership and can be more cost effective than buying a free-standing house. Many townhouse complexes and apartment blocks use levies paid to fund maintenance that benefits all sectional owners. These Schemes additionally offer amenities in their common areas, such as swimming pools, that benefit all residents.
In terms of section 2(c) of the Act, any common property which is for the benefit of all sectional owners is owned by all sectional owners in undivided shares. Common property would include hallways, stairwells, swimming pool areas, communal gardens and so on. Exclusive use areas, on the other hand, can include garages or parking bays, patios, courtyards and so on. The Sectional Titles Amendment Act 13 of 2022 took effect on 5 January 2023 and included important amendments like allowing an occupant of a sectional unit to use an exclusive use area (whereas previously the Act only allowed for an owner to utilise these areas).
Another essential aspect of understanding Sectional Title Schemes is the role of the Body Corporate. This entity is regulated by the Sectional Titles Schemes Management Act 8 of 11 (“the Management Act”). Section 2 of the Management Act stipulates that each sectional owner automatically becomes a member of the body corporate of the Scheme. Owners cannot opt out of membership of the Body Corporate.[5] The role of the Body Corporate is to oversee the management of the property, to ensure that the apartment block or complex is maintained and that its finances are sustainably managed.[6] A Sectional Title Register is opened in the Deeds Office once ownership of the first sectional unit is transferred to the first sectional owner, and once a sufficient number of members of the Body Corporate are noted, the first Annual General Meeting will be held.[7]
In practice, sectional units are often sold before they are constructed, with developers often selling units before the land for the development is even purchased, on the condition that a certain number of units need to be sold for the development to proceed.[8] This practice is, however, regulated; deposits for the sale must be held in trust and the funds can only be utilised once the Sectional Title Register is opened. This in turn can only be done once a sectional plan in terms of section 5 of the Act is drafted, submitted for approval by the Surveyor-General, and such approval is received.
However, besides development, properties can also be converted to Sectional Title Schemes. If an apartment block is purchased by a person, and they do not desire to rent out the units individually, the property can be converted to sectional units. However, unlike a developer who is usually erecting a new building on vacant land, where a conversion takes place, any residential tenants must be informed of the proposed sectionalising of building or complex, in terms of section 4(3)(2) of the Act. The usual processes concerning a sectional plan must be conducted too, and same cannot be lodged for approval until the provisions of section 4(3)(2) of the Act are complied with.
The Body Corporate may, at the AGM, appoint trustees to manage the day-to-day needs of the sectional property. The trustees in turn may appoint a managing agent; however, the trustees must have adequate oversight over such agent.[9] A managing agent performs such duties as pertaining to collection of levies, bookkeeping, assisting with maintenance and advising the trustees.[10] In exchange for the functions performed by the trustees and managing agent, sectional owners must pay their levies timeously. Sectional owners must further abide by the rules of the Body Corporate, to ensure that the sectional owners all live in harmony with one another and do not disturb one another.
Should you have any issues pertaining to Sectional Title Schemes, email us at solutions@adriaansattorneys.com and our skilled Real Estate Department will gladly advise you on best practice.
[1] Kilbourn L & Botha M ABC of Conveyancing (2021) 4-1.
[2] Ibid.
[3] Spencer M “The Early Days of Sectional Title” (2022) <https://saiv.org.za/the-early-days-of-sectional-title/>.
[4] Collins M & Henney R “Share block schemes and the rights afforded” (2022) <https://www.cliffedekkerhofmeyr.com/en/news/publications/2022/Practice/Real/real-estate-law-alert-4-october-share-block-schemes-and-the-rights-afforded.html>.
[5] Benit-Gbaffou C, Clark M, et al A Guide to Sectional Title in South Africa < https://www.wits.ac.za/media/wits-university/faculties-and-schools/-engineering-and-the-built-environment/architecture-and-planning/yeoville-studio/documents/Sectional_Title_Booklet_FINAL.pdf>.
[6] Ibid.
[7] Ibid.
[8] Kilbourn L & Botha M ABC of Conveyancing (2021) 4-4.
[9] Benit-Gbaffou C, Clark M, et al A Guide to Sectional Title in South Africa < https://www.wits.ac.za/media/wits-university/faculties-and-schools/-engineering-and-the-built-environment/architecture-and-planning/yeoville-studio/documents/Sectional_Title_Booklet_FINAL.pdf>.
[10] Ibid.
Jade Rautenbach
Candidate Attorney
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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