Sectional Titles

Cession of exclusive use areas

For many a year, the cession of an exclusive use area by an owner of a section in a sectional title scheme has been a bone of contention. On numerous occasions this matter was discussed at the annual conference of Registrars and the following resolutions were taken:

RCR 50 OF 1990
"The Act is clear. A bilateral notarial deed of cession must be lodged."

RCR 34 OF 1994
"Conference resolution 50 of 1990 is confirmed."

RCR 4 OF 1997
"Registrars' Conference Resolution No. 34 of 1994 is confirmed."

The reason for the uncertainty in the practice could perhaps be found within the wording of section 27(4)(a), which reads as follows:
"An owner of a section in whose favour the right to the exclusive use or a part of the common property delineated on the sectional title plan is registered, may transfer his or her interest in such right to the owner of another section in the scheme by the registration by the registrar of a notarial deed of cession entered into by the parties."

The school of thought advocating that only a unilateral cession is required when the seller of a unit, who is also the holder of the exclusive use area, transfers and cedes the section and the right simultaneously, bases its agreement on the fact that a bilateral cession should only be required when a holder cedes his or her exclusive use area to an owner of another section in the scheme. The said school of thought substantiates its argument by also referring to the provisions of regulation 61(2) of the Deeds Registries Act, 47 of 1937, which inter alia provides for a unilateral notarial deed of cession of a personal servitude, provided that such deed does not impose any obligations upon the cessionary.

To put an end to the uncertainty for once and for all, the matter was raised at the Sectional Titles Regulation Board Meeting held during June 2004. The resolution taken by the Board is as follows:

"The Board resolves that section 27(4) does not merely have a restrictive applicability. It must also be applied when an exclusive use area is ceded to a new prospective holder simultaneously with the transfer of the unit. The coupling of section 27(40 and the linking to an owner of another section is to ensure that an exclusive use area cannot be ceded to a person other than the owner of a unit in a scheme."

It is thus trusted that the "ghost" of unilateral or bilateral has now been put to rest and that uniformity will now prevail between practitioners and deeds controllers, alike.

Republished with permission

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