Section 27(5) of the Sectional Titles Act 95 of 1986 (hereinafter referred to as “the Act)”, provides the mechanism, notwithstanding the provisions of section 6 of the Deeds Registries Act 47 of 1937, to cancel an exclusive use area, delineated on a sectional plan and registered in favour of an owner.
Section 27(5) of the Act reads as follows:
“(5) A right to the exclusive use of a part of the common property delineated on the sectional plan registered in favour of an owner of a section may with the written consent of the mortgagee of the exclusive use area and holder of a registered real right be cancelled by the registration by the registrar of a notarial deed of cancellation entered into by the holder of such right and the body corporate, duly authorised by a special resolution of its members, on behalf of all the owners of sections in the scheme.” (My underlining)
Once the exclusive use area is cancelled, such common property which previously encompassed the exclusive use area vests in the body corporate of the scheme, and the body corporate may in terms of section 27(2) of the Act re delineate another exclusive use area on the sectional plan, and cede it to an owner of a section in the scheme.
Section 27(2) of the Act reads as follows:
“(2) A body corporate, duly authorized thereto by a unanimous resolution of its members, may, subject to the provisions of section 5(1), request an architect or land surveyor to apply to the Surveyor General for the delineation on a sectional plan in the manner prescribed of a part or parts of the common property in terms of section 5(3)(f) for the exclusive use by the owner or owners of one or more sections: Provided that no such delineation shall be made on the sectional plan in terms of this subsection 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.”
Requirements for the cancellation of an exclusive use area
- The cancellation will be effected by virtue of a bilateral notarial deed entered into between the holder of the exclusive use area and the body corporate. The required special resolution by the members will be retained by the Notary in his/her protocol.
- The bond(s) registered over the exclusive use areas must be lodged for disposal, i.e. for cancellation or release from the operation of the bond (see in this regard RCR 42 of 2003).
- Where a registered real right is registered over the exclusive use area, the real right will also have to be cancelled, albeit that RCR 76 of 2011 merely provides that the consent of the holder of the registered real right must be lodged. It is submitted that the provisions of section 68(1) of the Deeds Registries Act 47 of 1937 must be invoked for the cancellation thereof.
- The cancellation of the exclusive use area is deemed to be a transaction, in terms of the definition of “transaction” in the Transfer Duty Act 40 of 1949, and thus the necessary transfer duty receipt must be lodged.
- No rates clearance certificate need be lodged.
- The title of the exclusive use area must also be lodged.
Cancellation of an exclusive use area by developer
Section 27(5) of the Act only provides for the cancellation of an exclusive use area depicted on a sectional plan where a body corporate is in existence, however, in terms of RCR 80 of 2011 it was held that where nobody corporate is in existence the developer may cancel an exclusive use area by virtue of a unilateral notarial deed of cancellation. The remaining provisions of section 27(5) still apply mutatis mutandis (see discussion above).
Double registration of exclusive use areas
Where an exclusive use area was erroneously ceded to two separate owners of sections in the scheme, i.e. not in undivided shares but as the sole holder of the right, the Registrars at their annual conference held that both the titles of the erroneously ceded exclusive use areas must be cancelled, in terms of the aforesaid section 25, and the exclusive use area must be re ceded by the body corporate to the rightful holder of such exclusive use area (see RCR 36 of 2002).