A sectional plan is the plan approved by the Surveyor-General or pre 1988, the local authority and described as such. It shows how the land is approved to be created, and divided. Everything on this plan is common property when the scheme is approved and all of this common property is the share of the developer. When the Sectional plan is registered in the Deeds registry it becomes the title deed to the land. The land is the sum of the sections inside the buildings as depicted on the sectional plan. The common property are the parts of the land that are not included in a section. The entire scheme is divided into sections and common property. Upon registration of the plan, the developer is not only issued with certificates of registered sectional title as proof of his real right in the erected sections, he is also issued with a certificate of registered real right as proof of his acquired real right over the sections depicted on the approved sectional plan, but not yet erected.
The sections approved on the plan and not yet registered are the remaining extent or balance of the share of common property of the developer (the exclusive use part of the common property of the developer as reserved). However the ownership thereof will vest in the body corporate if the developer does not confer his share of the common property to a registered owner in the scheme within a certain time.
Common property is divided in common use and exclusive use. The sum of common use areas and exclusive use areas is the whole of the common property of the scheme and it includes the proposed approved extensions of common property. The Participation Quota (PQ) is the percentage of the undivided share of the common property that belongs to the respective sections and sums to a total of 100%.
The Exclusive Use Areas (EUAs) are the part of the common property that belong exclusively to a section and the developer in addition to the PQ of the sections that they are registered to. EUA's do not form part of the 100% PQ but they do form part of the Unit to which it is registered. So the undivided share of common property of a section is excluded from the EUAs that are also registered to a section. When a section is transferred from one owner to another, the section is transferred with its share in the common property.
Now EUAs registered on the Title deed of the land namely the Sectional Title plan is an urban right to immovable property and permanently attached to a section as per the conditions endorsed on the title deed in terms of section 11(2) (the conditions of sectional title). The certificate of registered sectional title refers to this title deed (sectional plan). The sum of all certificates of registered sectional title and certificates of real right equals the Sectional title deed. A certificate of sectional title is a description of a part of the whole and cannot describe a part of the whole that does not exist in the whole. The whole is the sum of the parts.
When a section is transferred via notarial deed of transfer, it is transferred with its share in the common property. A deed of cession of an EUA is only required when a registered EUA is transferred inside the body corporate from one owner to another owner.
The Act is clear in Section 15B that ownership of any undivided share held under a certificate of registered sectional title shall be transferred by means of a deed of transfer. I see that Registrars still battle to resolve whether an EUA can be transferred by a notarial deed of cession from a seller (member) to a buyer (non-member). This cession of EUA is illegal in terms of section 27(4)a. Transfer of a section and its common property is effected when a notarial deed of transfer is lodged and attested by the Registrar.
There is no Section in the entire Act that allows the transfer of an EUA from an owner to a non-owner. Read section 25(5) where a developer can cede his right of extension to another owner, by the registration of an EUA, and must be ceded within 12 months or the right will lapse. Does this mean that an owner of section remains the owner of an EUA for 12 months after he sells his section and the EUA is not ceded? I don't think so.
Ownership of the EUA vests in the new owner of the section. Not by cession, but by transfer. I still don't see how a right of extension can remain reserved by a developer for a period longer than 12 months if he is not a registered owner of a section.
It is my contention that the Golden Unit concept still exists in the 1986 Act if you read Section 25(5).
[Editors note: This article was prompted by the article Section 27]