With reference to the summary and the discussion of the case of Erf 441 Robertsville Property CC and Another v New Market Developments (Pty) Ltd 2007 (2) SA 179 (W) in the July edition of the De Rebus I am of the opinion, with respect to Judge Goldstone, that the learned judge erred in his judgement that section 67 of the Town Planning and Townships Ordinance 15 of 1986 is not applicable when a sectional title unit is being sold. As it was held that a sectional title unit, including an undivided share in the common property, does not constitute an erf for purposes of Section 67 of the said Ordinance.
In terms of Section 3 of the Sectional Titles Act 95 of 1986, a Unit is deemed to be land and land in the Sectional Title Act is defined as the land comprised in a scheme as shown on the sectional plan. This surely encompasses the erf / land on which the scheme was opened.
The whole purpose of Section 67 is to procure an indisputable sale of property in terms of which all the provisions relating to services, etc. are complied with. It will be a sad day if a sectional title unit can be sold in terms of a contract deemed to be a valid contract, and ultimately transfer cannot be effected in view of the fact that proclamation of the township is not possible. The main purpose of the introduction of section 67 was to protect purchasers of land from dodgy developers.
It would be appreciated if readers could share their comments on the above case.
Property Law Specialist
I agree with Allen that this judgement is bound to cause confusion as the sectional title development is located on an “erf” in the township still to be established.
The unit which is purchased consists of a section as well as the right to an undivided share in the common property (Refer to the definition of “Unit” in Section 1 of Act 95/1986). This common property is situated on a defined “erf” in the township to be proclaimed and hence the requirements of Section 67 Ord 15/1986 are in my opinion indeed applicable as you are not only buying the section but also the share in the common property (comprising of an erf).
I don't agree. Even though a unit is deemed to be land in terms of the Sectional Titles act, it cannot be said that "land" and "erf" are the same thing. In my view the judgment is correct. A Sectional title Scheme is not always established on an erf in a township.
Sectional title schemes may be established on farm land with the applicable consents from the Local Authority, Department of Agriculture etc. Establishing a sectional title scheme on farm land does not amount to subdividing the land (as the building is divided, not the land), only increasing the shares in the land. So, in my opinion, such sale would not be void ab initio due to the provisions of Act 70 of 1970.
Mandi Kindly see the definition of "erf" in Ordinance 15 of 1986. It clearly refers to land situated in a township. I therefore submit that section 67 must be interpreted in its wider sense.
Allen, I don't deny that an erf in terms of the Ordinance refers to land in a township. But that doesn't mean that a unit is regarded as an erf in terms of the Sectional Titles act - it is regarded as land. Land includes land in a township and farm land, for purposes of the Sectional Titles Act. But section 67 cannot apply to a unit, as a unit isn't regarded as an erf.
Allen, I don't deny that an erf in terms of the Ordinance refers to land in a township. But that doesn't mean that land, in terms of the Sectional Titles act, refers to an erf. It includes land in a township and farm land. So section 67 cannot apply to a unit, as a unit is not regarded as an erf, but as land. Section 67 is not applicable to land. It is applicable to an erf.
Hi Mandi I take your point. You also mention that "Sectional title schemes may be established on farm land with the applicable consents from the Local Authority, Department of Agriculture etc. Establishing a sectional title scheme on farm land does not amount to subdividing the land (as the building is divided, not the land), only increasing the shares in the land".
My question is merely academic but why would one need the Department of agriculture's consent if there is in fact no subdivision?
Stuart the consent is required in view of the fact that there is an increase in share holders of the common property -- see section 3 (1) (b) of Act 70 of 1970.
The judgement handed down in this case is now, in my view, no longer relevant given the provisions of SPLUMA and the By- laws issued by the relevant local authorities. If one looks at section 31 and 27 of the By -laws issued by the City of Tshwane and Johannesburg, respectively, it is abundantly clear that a section in a sectional title scheme cannot be sold prior to proclamation of the Township. What are the views of readers?