Deeds Registries are inundated with requests by developers of Sectional Title Schemes, prior to the establishment of the body corporate, to allow for the:
- subdivision of a section;
- consolidation of sections;
- extension of sections;
- extension of the common property; and
- extension of the time period for the exercising of a real right of extension, as envisaged by section 25.
On closer perusal of the Sectional Titles Act 95 of 1986 (the “Act”), the above acts of registration only befall the owner of the section(s) or be done with the permission of the body corporate.
For the extension of the time period to exercise a real right of extension, the Registrars at their annual conference resolved that a developer may not unilaterally extend the time period, prior to the body corporate being established, nor may a co developer extend the time period of the right of extension, prior to the body corporate being established. The developer will have to cancel the existing right and register the right de novo (RCR 66 of 2011).
In respect of the developer's powers to subdivide, consolidate or extend any section or to add to the common property of the scheme, before the establishment of the body corporate, it is submitted that the developer does not have such powers.
Any of these changes would affect not only the physical nature of the scheme from a legal perspective, but also the administrative and financial aspects of management of the scheme. Subdividing a unit increases the number of owners and affects the voting rights and contribution (levy) obligations. Increasing the common property will usually add to the scheme’s overall expenses and change the fundamental nature of the scheme and would prejudice the rights of third parties who have contracted with the developer but who have no registered real rights until they obtain transfer of the units and exclusive use rights they have purchased.
The above matter will be referred to the Sectional Title Regulation Board and Registrars’ Conference, however, readers’ views on this issue will be appreciated.