AA - May 2020

Author: Wesley Graham
25 May 2020

HOW REAL IS YOUR RIGHT

The allocation of rights to the exclusive use of a part or parts of a sectional title scheme’s (“scheme”) common property is somewhat of a contentious topic in communal living in South Africa. In instances where an owner or owners have not acquired rights to the exclusive use of a portion of a scheme’s common property in terms of the applicable sectional title legislation or the prevailing rules, trustees, on behalf of bodies corporate, have been known to conclude informal agreements with an owner or owners in terms of which they are allocated “rights” to exclusively use and enjoy a part or parts of the scheme’s common property.

Informal arrangements often lead to disputes amongst owners when the holders of the alleged “rights attempt to assert these “rights” against fellow owners who are aware that due process was not carried out by the body corporate when allocating the said “rights”. To the extent that an owner or owners possess or occupy a part or parts of the common property in terms of an informal arrangement, the writer is of the opinion that the said informal arrangement does not provide an owner or owners with lawful rights to exclusively use and enjoy a part or parts of a scheme’s common property.

An owner or owners will be deemed to be the holder or holders of a lawful rights to exclusively use a part or parts of a scheme’s common property, if they have acquired the rights by virtue of one of the below mentioned processes:

  1. to the extent that a scheme was formed pursuant to the provisions of the Sectional Titles Act, 66 of 1971 (“1971 Act”), rights of exclusive use of a part or parts of the scheme’s common property may have been allocated to an owner or owners by (i) a written deed of cession issued by the developer to an owner or owners in terms of the scheme’s management rules; or (ii) in terms of a use and occupation agreement in force when the 1971 Act was applicable; or
  2.  if a part or parts of the common property are delineated on a sectional plan, the developer may impose a condition by which the right to the exclusive use of a part or parts of the common property may be conferred upon an owner or owners of a sections in the scheme; or
  3. the developer may cede the right to the exclusive use of a part or parts of the common property to an owner or owners of sections in the scheme by registering a unilateral notarial deed in the owner or owners’ favour; or
  4. the body corporate may resolve by way of a unanimous resolution adopted at a general meeting to request an architect or a land surveyor to apply to the Surveyor-General for the delineation on a sectional plan of a part or parts of the common property for the exclusive use by an owner or owners of one or more sections in the scheme. Thereafter, the right to the exclusive use of a part or parts of the common property delineated on the sectional plan shall be transferred to the owner or owners on whom the right has been conferred by the body corporate by the registration of a notarial deed entered into by the parties and the body corporate shall represent the owners of all sections as transferor; or
  5. the developer or the body corporate may make management or conduct rules which confer rights of exclusive use and enjoyment of a part or parts of the common property upon an owner or owners of one or more sections in the scheme.

The 1971 Act
 
In Teresa Angela Biccari & Another v Body Corporate of Shoreham & 48 Others, the Court was required to determine whether certain owners were the holders of exclusive use rights in respect of the parking bays which had been allocated to them.

In determining whether the owners were the holders of exclusive use rights to the parking bays, Loots AJ explained that one is required to consider whether the exclusive use rights had been allocated to the owners upon receiving a certificate provided by the trustees once the developer had issued the owners with written cessions. In this particular instance, certain owners had, in fact, received certificates from the trustees pursuant to a provision contained in the scheme’s management rules.

To the extent that the aforementioned owners had received certificates from the trustees, Loots AJ held that they were deemed to be holders of rights of exclusive use rights over the parking bays allocated to them. As such, the holders of certificates were entitled to take transfer of the exclusive use rights by the registration of a written notarial deed in terms of section 60(3) of the STA.

Insofar as the remaining owners were concerned, the procedure as provided for by the scheme’s management rules had not been followed and the owners had not received cessions from the developer nor had they received certificates from the trustees. Moreover, Loots AJ found that no use and occupation agreements had been concluded between the owners and the developer. Consequently, Loots AJ held that the remaining owners were not the holders of exclusive use rights vis-à-vis their parking bays and therefore they were not entitled to take transfer of their alleged rights of exclusive use by the registration of a notarial deed.

Given that the abovementioned owners were not entitled to take transfer of the exclusive use rights, Loots AJ held that the remaining exclusive use rights had vested in the body corporate, free from any mortgage obligation. As a result, the body corporate could lease the relevant parking bays to its owners, or alternatively it could alienate the parking bays in terms of the applicable legislation.

It is evident from the abovementioned case that an owner or owners could be holders of rights of exclusive use to a portion of the scheme’s common property if the rights had been allocated by the developer in terms of a process provided for by the scheme’s management rules; or if the developer concluded a use and occupation agreement with an owner or owners while the 1971 Act was in force.

Notarial Deed

The Sectional Titles Act, 95 of 1986 (“STA”) makes provision for multiple mechanisms within which a developer or body corporate may allocate an owner or owners with exclusive use rights to a portion or portions of the scheme’s common property.

Section 27(1)(a) of the STA stipulates that if a part or parts of the common property are delineated on a sectional plan, the developer may, when making an application for the opening of a sectional title register and the registration of a sectional plan, impose a condition by which the right to the exclusive use of a part or parts of the common property may be conferred upon an owner or owners of sections in the scheme.

Section 27(1)(b) of the STA stipulates that the developer may cede the right to the exclusive use of a part or parts of the common property to an owner or owners of sections in the scheme by registering a unilateral notarial deed in the owner or owners’ favour.

Section 27(2) of the STA, read with section 5(1)(e) of the STSMA, stipulates that a body corporate may, upon unanimous resolution by the owners adopted at a special general meeting, request an architect or land surveyor to apply to the Surveyor-General for the delineation on a sectional plan of a part or parts of the common property for the exclusive use by an owner or owners of one or more sections: Provided that no such delineation shall be made on the sectional plan if such delineation will encroach upon a prior delineation on the sectional plan of a part of the common property for the exclusive use by one or more of the owners.

Section 27(3) of the STA stipulates that a right to the exclusive use of a part or parts of the common property, delineated in terms of section 27(2) of the STA, may be transferred to the owner or owners by the registration of a notarial deed entered into by the owner or owners and the body corporate which shall represent the owners of all sections as transferor.

Amendment of Scheme’s Rules

Finally, the Sectional Titles Schemes Management Act, 8 of 2011 (“STSMA”) enables a body corporate to confer rights of exclusive use to a part or parts of the common property upon an owner or owners by amending the scheme’s governance documentation to include either an exclusive use management rule or an exclusive use conduct rule.

Section 10(7) of the STSMA stipulates that the body corporate may make management or conduct rules which confer rights of exclusive use and enjoyment of parts of the common property upon an owner or owners of the body corporate.

In this regard, and in terms of section 10(2)(a) of the STSMA, the scheme’s management rules may, subject to the approval by the chief ombud, be substituted, added to, amended or repealed by way of unanimous resolution of the body corporate adopted at a special general meeting or by way of round robin resolution.

Alternatively, and in terms of section 10(2)(b) of the STSMA, the scheme’s conduct rules may, subject to the approval by the chief ombud, be substituted, added to, amended or repealed by way of special resolution of the body corporate adopted at a special general meeting or by way of round robin resolution.

Section 10(8) of the STSMA stipulates that the rules contemplated in subsection (7) must include (i) a layout plan to scale on which is clearly indicated the locality of the distinctively numbered exclusive use and enjoyment parts; and (ii) a schedule indicating to which owner each such part or parts of the common property are allocated.
 
Finally, and to the extent that the owners of the body corporate resolve to amend the scheme’s management or the conduct rules to confer exclusive use rights to a portion or portions of the common property upon an owner or owners, section 10(5) of the STSMA requires the chief ombud to scrutinise and approve the amendment to the rules before the amendment may be enforced. Insofar as the chief ombud approves the amendment to the rules, he/ she shall issue a certificate to that effect and the amendment will become enforceable by the body corporate.

Conclusion
 
For the avoidance of any doubt, and in an attempt to avoid disputes arising between owners and trustees alike, the writer is of the view that bodies corporate must regularise the allocation of exclusive use rights to a portion or portions of a scheme’s common property by (i) registering a notarial deed in terms of section 27 or section 60(3) of the STA; or (ii) amending the scheme’s management rules or conduct rules to allocate exclusive use rights to a portion or portions of the common property.

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