In the first part of this article the reader was introduced to the concept of subdivision of the common property in a sectional title scheme; the basic preparatory steps to be taken for such subdivision; and the deeds and documents to be lodged at the deeds registry for registration thereof. An elaborate discussion ensued on the procedure for the transfer of a portion of the common property, in respect of which common property no registered sectional title rights exist (e.g. no sections, no exclusive use areas, no right to extend the scheme as contemplated by Section 25).
From the phrasing of Section 17 it is evident that a portion of the common property may not be transferred, if such portion is subject to existing sectional title rights, i.e. sections, exclusive use areas, etc. Therefore, if any such rights are registered in respect of the portion of the common property to be transferred, such rights must first be disposed of.
This part of the discussion is intended to deal with the procedure to be followed, where the whole or part of a section(s) is registered over the portion of the common property to be transferred.
If the whole of a section is affected by the intended transfer of the common property, section 17(4)(a) prescribes that such a section must be cancelled with the written consent of the registered sectional owner, prior to the registration of the transfer of the portion of the common property. It stands to reason that the participation quota of such a section will lapse upon registration of the cancellation of the said section (Section 17(4)(c)). Furthermore, the quotas of the remaining sections will have to be adjusted proportionately (Section 17(4)(c)). In terms of Section 17(4)(d) the registrar of deeds should notify the Surveyor-General whenever the cancellation of the section is registered; where-upon the Surveyor-General should make the requisite amendments to the original sectional plan, the deeds registry copy of the sectional plan and the schedule thereto, specifying the quota of each remaining section.
It is advised that the following documentation should be prepared and lodged at the deeds registry:
For the cancellation of the whole of the section:-
- the written consent of the owner of the section to the cancellation of the section;
- the sectional title deed of the unit (section);
- all the sectional mortgage bonds (if any) registered over such unit (section) together with the consent of the bondholder(s) to the disposal of such sectional mortgage bonds; and
- the title deeds of any other registered real rights over the unit, if any, for the cancellation [in terms of CRC 18 of 1997, these title deeds must be lodged. However, the circular is silent about the written consent of the holders of such rights to the cancellation of the rights. Furthermore the circular refers to Section 17(5) of the Act as authority for the lodgment of such title deeds. Section 17(5) of the Act, however, specifically deals with the alienation of the whole of the common property - not only a portion. The act is silent about the lodgment of such title deeds upon cancellation of the section. It is submitted that the title deeds of such rights must be lodged, together with the written consent to the cancellation thereof by the holders of the rights]; and
- a transfer duty receipt for the acquisition of the common property.
Where only a part of a section is affected by the alienation of a portion of the common property, a proportionately amended participation quota schedule is sent to the Surveyor-General by the conveyancer concerned. As only the Surveyor-General may change the description and extent of a section (unit), he is informed about (and requested for approval of) the anticipated amendment to the section prior to lodgment of the transaction in the deeds registry (Section 17(4A)(a)).
Upon approval of the amendment, the Surveyor-General notifies the registrar of deeds concerned about the anticipated change in the description and/or extent of the section (Section 17(4A)(a)). This notification is annotated by the registrar of deeds as "SG-interdict" against the section concerned.
Upon registration of the transfer of the portion of the common property the registrar endorses the sectional title deed of the affected unit (section) with regard to the amended description and/or extent as reflected on the said "SG-interdict".
Subsequent to the registration of the transaction, the registrar notifies the Surveyor-General in this regard (Section 17(4)(A)(c)). Upon receipt of such notification the Surveyor-General notes the amendment on the original plan and the deeds registry copy of the sectional plan and the amended participation quota schedule, specifying the quota of each section (Section 17(4)(A)(c). Thus, simultaneously with the registration of the transfer of the portion of the common property, the unaffected portion of the unit is substituted in accordance with the amended participation quota schedule (Section (17(4A)(b)).
It is advised that in this instance, the following documentation should be prepared and lodged at the deeds registry:
For the cancellation of the affected portion of the section:-
- the written consent of the owner of the section to the cancellation of the affected portion of the section;
- the sectional title deed of the unit (section);
- all the sectional mortgage bonds (if any) registered over such unit (section) together with the consent of the bondholder(s) to the disposal of such sectional mortgage bonds in respect of the affected portion of the unit (section), at least (i.e. release of the portion from the working of the bond or the cancellation of the bond);
- the title deeds of any other registered real rights over the unit, if any, for cancellation; and
- a transfer duty receipt for the acquisition of the common property.
Irrespective of whether only part of a section, or the whole thereof, will be affected by the transfer documentation to be prepared and lodged at the deeds registry remains the same and it is advised to include:
For the transfer of the portion of the common property:-
- a deed of transfer in the prescribed FORM H in Annexure I to the regulations (Section 17(3));
- a copy of the unanimous resolution, referred to in Section 17, certified by two trustees of the body corporate (Section 17(1) and Section 17(2), and CRC 18 of 1997);
- a diagram approved by the Surveyor-General - if the portion of the common property to be alienated has not been demarcated and depicted on an already existing diagram that was approved by the Surveyor-General (Section 17(3)(a) and CRC 18 of 1997);
- all the mortgage bonds over the units and the scheme and related written consents of bondholders in terms of Section 56 and Section 57 of the Deeds Registries Act for disposal in respect of the portion concerned (Section 18; RCR 35 of 2002 and RCR 45 of 2005); and
- all usual, prescribed documentation e.g. a special power of attorney to pass transfer, a transfer duty receipt, rates clearance certificate for the land, usual documentation pertaining to the subdivision of the land, etc.
In the remaining two parts of the article, the procedure to be followed where the exclusive use areas and the right to extend the scheme as contemplated by Section 25 are affected will be discussed.
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