Deeds Registries Amendment Bill [B13-2010]; Sectional Titles Amendment Bill [B14-2010]: briefing by Department of Rural Development & Land Reform

Committee: Rural Development and Land Reform

Chairperson: Ms H Matlanyane (ANC)

Date of Meeting: 27 Jul 2010

Summary

The briefing by the Department on the Deeds Registries Amendment Bill set out the aims of the proposed amendments. Chief among those was to legally oblige registrars to comply with the Chief Registrar of Deeds. A further aim was to reflect the position regarding the discontinuation of registration of mineral rights in the deeds registry. In addition, the appointment of alternate members to the Deeds Registries Regulation Board to ensure a quorum was provided.

The Sectional Titles Amendment Bill briefing focused on amendments to cater for the issue of a certificate of registered title in respect of a fraction of an undivided share in a unit in a sectional title scheme.

In discussion, members asked if the Deeds Registries Amendment Bill would provide security of title. There were questions about the registration of mineral rights, and the impact of mining rights on agricultural land. The registration of communal land was discussed, as well as the possibility for deeds of grant to be converted to title deeds. The impact of the amendments on development received attention. The Department responded extensively, especially on such matters as syndicates that operated outside the deeds registration system, and fraudulent transfer, which the amendments sought to address. In response to questions about land claims, the Department responded that there were solid records of land claims going back to the 17th century, that could not be corrupted. Further questions included those around ownership of state land, Permission to Occupy rights, the transfer of unsurveyed communal land and the rights of communities versus those of mining enterprises.



Minutes

Briefing on the Deeds Registries Amendment Bill, 2010
Ms Antoinette Reynolds, Assistant Registrar for the Department of Rural Development and Land Reform, said that the Deeds Registries Act (No 47 of 1937) was the legislation that governed the registration of deeds. The system of deeds registration had a juristic foundation and served to guarantee title. A Deeds Registries Regulation Board (DRRB) had the power to make recommendations to the Minister. The amendments reflected the recommendations of the DRRB.

Section 2 was to be amended to legally oblige registrars of deeds to comply with directives from the chief registrar of deeds.

The amendment of Section 3(1)(u) was necessary to reflect the position with regard to discontinuation of the registration of mineral rights in a deeds registry.

An amendment to Section 9 of the Bill provided for the appointment of alternate members to the DRRB, to prevent cancellation of meetings due to lack of a quorum.

The proposed amendment of Section 34 in Clause 5 of the Bill, catered for the issuing, to any owner, of a certificate of registered title of any fraction of his/her undivided share in such land. [See Appendix below for Memorandum on the Objects of the Bill.]

Discussion
Ms M Steyn (DA) asked about the Section 2 practice and procedure directives. She was concerned about the current situation. There had been allegations of fraudulent acts in the Deeds Registries of Department of Rural Development and Land Reform. She was concerned that problems would be uncovered ten years from now, that could be traced back to the current situation. She asked if the Bill would provide security of title. She wondered if more legislation was needed. She knew that people were unhappy about title deeds. She asked how mineral rights were currently registered. Mining rights impacted on agricultural land and land use. There was duplication of legislation. She asked where mining companies registered. Mining companies would sometimes operate on land without notification to farmers.

Mr R Cebekhulu (IFP) said regarding communal land, that the Registrar’s Office was opposed in the reserves. Of the trust land in Kwazulu Natal, some land was registered under the Ingonyama Trust, and some not.

Mr M Swathe (DA) asked if the amendments would affect the development of land. Many people in the townships held deeds of grant, which they wanted to convert to title deeds. He asked if that was possible.

Mr Sam Lefafa, Chief Registrar of Deeds, responded that there were 10 Deeds Registries in South Africa. Different offices had evolved their own practices. Confusion reigned among conveyancing offices. The current Bill would provide direction. It would become clear that not to comply with the Chief Registrar, was misconduct. Gaps would be sealed in the deeds registration system. Syndicates were currently exploiting the situation. They operated outside of the deeds environment. There were conveyancers working outside that environment. It had to be established if the person who transferred, was indeed the owner of the land at the time of transfer, and whether the Act had been complied with. Wrongdoing often only came to light when people were alerted that their land had been stolen. In Sandton vacant land had been stolen. There were fraudulent documents. The municipality brought a court action to have the transfer revoked. The Hawks were involved in the investigation. Land had also been transferred in Tshwane, outside the Registry. The Chief Registrar of Deeds could henceforth intervene and close the gaps. Where municipal land was to be transferred, the municipal officer responsible had to appear in person, and had to accompany the conveyancer for the transfer. The Amendment Bill sought to retain territory from the conveyancer. The State Attorney would be responsible for conveyance for the transfer of state and municipal land. The State Land Disposal Committee had to approve it.

Mr Lefafa continued that municipalities lacked checks and balances. The Chief Registrar had to be empowered to deal with operational issues. Regarding mineral rights, he noted that the history of mineral rights in the country was long. The state had separated individual owners of mineral rights, and compiled deeds reports. The situation had later changed, with registration transferred to the Department of Minerals and Energy. There was currently a Registrar of Mining Titles. Mr Lefafa said his Department no longer dealt with mineral rights. Mineral rights had to be balanced against service rights. Holders of mineral rights were not to encroach on communities or private property. Minerals and Energy had to create that balance. Landowners had to be consulted. In the past the Minister of Land Affairs granted mining consent. There had to be formal submission to the Minister.

Mr Lefafa continued that there was trust land that had not been transferred to communities. Currently chiefs were seen to have areas of responsibility, and they had to be consulted. The Mining Charter stipulated consultation with chiefs. With regard to the Ingonyama Trust, he noted that large tracts of land had been in that trust before 1994. The position of land in the reserves required attention. His Department had backing legislation to upgrade land there. Currently, there was informal protection of land rights in the reserves. The Communal Land Rights Act had upgraded the legislation, so that vulnerable people could request the upgrading of land rights. The local Land Reform office could be approached. Procedures had been set in place.

Regarding title deeds and deeds of grant, Mr Lefafa said that deeds of grant could be upgraded by mere endorsement. An application could be lodged at the Deeds Office, for deeds of grant to be upgraded to title deeds. Deeds of grant in fact carried enough weight, it was mostly to make the upgrading official.

Concerning the possible effect of the amendments on development, Mr Lefafa opined that development would not be affected. The amendments were there to regularise certain issues, and to clear up uncertainties in the deeds environment. There was other legislation more pertinent to development. In the deeds environment, his Department stood at the end of the process. It had to deal with issues of compliance. The Department did not attempt to control development.

Ms Steyn returned to the question about the safety and security of registered titles. She asked about reasons behind disputes about land claims issues. She asked when the registry of title deeds had commenced, and whether everything had been documented. She was still concerned about disputes 20 years into the future. She asked about the situation with respect to claims to land registered with someone else.

Mr Lefafa responded that under the new dispensation, land claims were dealt with in terms of the
Restitution of Land Rights Act of 1994. The Act gave direction on which claims were to be valued. Substantial historical research was available on how land had been acquired. It amounted to a history of acquisition. People would take chances by claiming that certain land had been owned by their ancestors. The Land Claims Commission had to investigate the claims. The Department had records going back to the 17th century. Chance takers would be exposed. In Northwest Province, landowners had stated that they could not sell their land for less than R800 million. Investigation revealed that the land had been acquired in 1965 for R800 000. The landowners had simply converted the thousands into millions. Claimants had to be backed up by the archives, in land claims. There had to be archival proof of ownership. Tension existed between landowners and the Land Claims Commission. The Commission could establish whether land had in fact been owned in the past. There were solid records that could not be corrupted.

Mr Cebekhulu asked about the rights to prospect of mining companies. There were cases were land was held communally, with people resident on it, where mining companies had resorted to surface rights. He asked if mining companies had rights in areas were people were well developed.

The Chairperson asked how much land was owned by the state in the former homelands, and processes for the transfer of land there.

Mr Lefafa replied that business rights in rural communities had to be applied for via the Minister of Land Affairs. Traditional authorities had chosen not to be part of municipalities in terms of the Municipal Structures Act. They had wanted independence. Concerning the extent of state owned land, he remarked that the position was difficult, but that an audit was under way. In the past state land had been owned by different entities, in the four former provinces. There was still land owned by diverse institutions. The Department was engaged with clearing up the issues. The Chief Surveyor General was cleaning up the data. An answer would be provided by the end of August. It was an advanced project.

Mr Swathe asked about the status of permission to occupy (PTO) rights. People in rural areas wanted upgrading of deed rights.

Mr Lefafa answered that PTOs were recognised in terms of the 1969 Act, and government was bound to continue doing so. There had been commercial exploitation on the strength of PTOs. They would be upgraded to title deeds.

Mr Swathe asked if people would have to apply for such upgrading, or whether it would be done on their behalf. Rural people were not familiar with the process. He asked about ways to make it understandable to them.

 Mr Lefafa replied that it was advisable for the people themselves to initiate the process. The political will to do it for them was there, but there were challenges. The Department now had a rural development mandate. He undertook to discuss the matter with his Land Reform counterpart. There was concern around PTO and Deeds of Grant upgrading. A communication strategy would be developed. He would report back on that matter.

Mr Swathe asked how many names would be available for alternate members to the Deeds Registries Regulation Board (DRRB).

Mr George Tsotetsi, Acting Registrar, replied that it would be four names.

Mr Lefafa added that the Department was in a difficult position, as Deeds Registries Regulation Board members could not always attend and meetings had to be postponed. Meetings only took place once a year. The Department tried to improve the environment each year. The purpose of the amendment was to fill in for the absences, so that a quorum could be reached.

Ms Steyn asked how members of the Board would be appointed.

Mr Lefafa answered that there would be nominations from the Law Society. The Chairperson could co-opt members of the South African Property Association, to advise the Board.

Mr Cebekhulu returned to the question about the rights of communities versus those of mining enterprises.

Mr Lefafa responded that it was easy to exploit mineral rights in rural areas. In developed areas, that could be difficult. Development was not to be disturbed in the interests of profits. No particular sector could be allowed to profit at the expense of development. Some forms of mining posed less risk of encroaching on development, for instance deep mining, unless the profits at stake were huge.

Sectional Titles Amendment Bill: briefing
Ms Reynolds explained that the Sectional Titles Act (No 95 of 1986) was the legislation that governed building developments where multiple owners held a type of property ownership known as “sectional title units”. She went through each clause of the Bill explaining its purpose (see Appendix 2 for Memorandum of Objects on this Bill).

Some of the issues that were to be amended:
● Clause 1(d) of the Bill proposed the amendment of Section 1(3A) of the Act to provide for a body corporate to approach the Court in instances where it had been unable to obtain a unanimous resolution.
● Clause 3(a) amended Section 11(3)(d) to eliminate confusion arising from a sectional title register opened on more than one piece of land.
● Clause 6 catered for a gap in Section 15B of the Act, which did not cater for the issuing of a certificate of registered title in respect of a fraction of an undivided share in a unit (for instance a title deed for a 1/52 share in a unit) in a sectional titles scheme.

Discussion
Ms Steyn asked about Clause 6 which amended Section 15(B). She asked how it worked and what it meant. In the case of special levies, what mechanism was there for the body corporate if it did not agree?

Ms Reynolds replied that if there was more than one owner, every individual could obtain title for the share of the land owned. There were townhouses in Clifton, for instance, where titles could be obtained for every month of the year, so that there could be mortgage or transfer for each title.

Ms Steyn asked about communal land under a common title system. Was it easy to transfer communal land that had not been surveyed?

Mr Tsotetsi replied that industry charged special levies. Amendments took existing practices into account. Sectional title in communal areas were linked to the building. In communal areas, land had to be surveyed, and building and sectional plans submitted. Sectional title could not be used otherwise in communal areas.

Mr Swathe asked for clarification. According to him it had been said earlier that everyone owned the title deed. He asked if the title would initially be awarded for land or for building.

Ms Reynolds responded that currently everyone still owned a registered sectional title. When someone bought a room in a flat, you owned that space, but also common ground shared by all, like the park. It would henceforth be possible to get a certificate for the fraction one owned. The principle was derived from timeshare, where people sold perhaps one week of a year of their space, and needed a title deed for that. Contribution to levies would be based on the size of one’s fraction.

Ms Steyn said that there could be unintended implications. Subdivision could cause problems. She asked about the reasons for including such a clause in the Act. Property was changing hands frequently. If people did not agree with special levies, the case could go back to court.

Ms Reynolds replied that management and rules of schemes, change of ownership and levies had to proceed in terms of Section 35. The Registrar of Deeds was not involved. The Sectional Titles Schemes Management Bill [B20-2010] would provide rules.

Mr Tsotetsi added that special levies currently resorted under Section 31 of the Act, when dues were not paid to the body corporate.

Mr Tsotetsi used the analogy of a loaf of bread, where the bread was owned collectively, but title could also be obtained for single slices.

The meeting was adjourned.

Appendix 1

 

MEMORANDUM ON THE OBJECTS OF THE DEEDS REGISTRIES

AMENDMENT BILL, 2010

1. OBJECTS OF BILL

The main objective of the Bill is to amend the Deeds Registries Act, 1937 (Act No. 47

of 1937) (hereinafter referred to as ‘‘the Act’’), in order to substitute certain obsolete

expressions and to enhance the application of the Act to conform to current and uniform

practices of the deeds registries.

 

2. CLAUSE BY CLAUSE ANALYSIS

 

2.1 Clause 1 of the Bill seeks to clarify the powers of the chief registrar by defining

‘‘supervision’’ to include the issuing of practice and procedure directives.

 

2.2 The amendment proposed in clause 2(a) of the Bill is consequential to the

promulgation of the Mineral and Petroleum Resources Development Act, 2002 (Act No.

28 of 2002), which provides for the discontinuation of the registration of mineral rights

in a deeds registry. The substitution for the expression ‘‘Supreme Court’’ of the

expression ‘‘High Court’’ seeks to rectify the present legal situation with reference to the

High Court.

 

2.3 Registrars of deeds are not obliged to follow the practice and procedure directives

that are issued from time to time by the chief registrar of deeds. The result is that

different practices and procedures are being followed in the different deeds registries.

The amendment proposed in clause 2(b) of the Bill seeks to eliminate this problem by

obliging registrars to comply with directives and thus promote uniformity in all deeds

registries throughout the country.

 

2.4 It often happens that members of the deeds registries regulations board cannot

attend meetings due to unforeseen circumstances. The absence of members of the board

at a meeting may lead to the absence of a quorum and the cancellation of that meeting.

The amendment of section 9, as proposed in clause 3 of the Bill, seeks to provide for the

appointment of alternate members to the board. This amendment will prevent

cancellation of meetings due to lack of a quorum and will ultimately save costs.

 

2.5 Section 17(2) of the Act provides for the disclosure of the full names and marital

status of a person in a deed that needs to be lodged for registration record or execution

in a deeds registry. The proposed amendment of section 17(2), in clause 4 of the Bill,

seeks to provide for the disclosure of the full names and marital status of a person in any

documents, other than deeds, that need to be registered, recorded or executed by a

registrar of deeds.

 

2.6 Section 34 of the Act allows an owner of a piece of land to apply for a certificate

of registered title for his or her undivided share in land, but only in instances where such

land is owned in joint ownership. The proposed amendment of section 34, in clause 5 of

the Bill, caters for the issuing, to any sole owner, of a certificate of registered title for any

fraction of his or her undivided share in such land.

 

2.7 The amendment of the definition of ‘‘Master’’, as proposed in clause 6 of the Bill,

is consequential to the change of name of the High Court, as contemplated in clause 2

of the Bill. The amendment of the definition of the ‘‘Minister’’ also proposed in clause

6 seeks to express the correct title of the Minister in view of the recently changed name

of the Cabinet portfolio.

 

Appendix 2

 

Memorandum On The Objects Of The Sectional Titles

Amendment Bill, 2010

 

1. OBJECTS OF BILL

The Sectional Titles Amendment Bill, 2010 (hereinafter referred to as ‘‘the Bill’’),

seeks to amend the Sectional Titles Act, 1986 (Act No. 95 of 1986) (hereinafter

referred to as ‘‘the Act‘‘), in order to, amongst others—

(a) amend certain definitions;

(b) redefine the boundaries between certain sections and common property;

(c) regulate the substitution of bonds registered in respect of different pieces of

land shown on the sectional plan;

(d) provide for the issuing of certificates of real rights of extension and certificates

of real right of exclusive use areas at the opening of a sectional title register;

(e) provide for the issuing of a certificate of registered sectional title in respect of

a fraction of an undivided share in a section;

(f) further provide for the vesting of rights of exclusive use areas where an owner

ceases to be a member of a body corporate; and

(g) provide for the cancellation of exclusive use area rights.

 

2. CLAUSE BY CLAUSE ANALYSIS

 

CLAUSE 1

2.1.1 The definition of ‘‘developer’’ provides, for purposes of sections 10 and

15B(3)(c), for the inclusion of an agent or his or her successor in title, or any

other person acting on behalf of any of the above-mentioned persons, to act

on behalf of a developer. However, the definition does not include the

developer’s agent or his or her successor in title in respect of the approval of

development schemes, as contemplated in section 4 of the Act. Clause 1(a)

of the Bill provides for the necessary inclusion.

 

2.1.2 In view of the recently appointed members of Cabinet, the Minister’s title is

changed for legal certainty with regard to the administration of the Act.

Clause 1(b) therefore substitutes the definition of ‘‘Minister’’.

2.1.3 The definition of ‘‘owner’’ still makes reference to the Agricultural Credit

Act, 1966 (Act No. 28 of 1966), yet the said Act has been repealed by the

Agricultural Debt Management Act, 2001 (Act No. 45 of 2001). Clause 1(b)

of the Bill proposes the omission of such reference, so as to reflect the correct

legal position.

 

2.1.4 Section 1(3A) of the Act provides for a body corporate to approach the Court

for relief in instances where it is unable to obtain a unanimous resolution.

However, subsection (3A) is made subject to the provisions of subsection

(3)(c) which stipulates that where a resolution adversely affects the

proprietary rights or powers of any member as owner, such resolution shall

not be regarded as having been passed unless such member consents thereto

in writing. By making subsection (3A) subject to subsection (3)(c), the

opportunity remains for an unreasonable owner to jeopardise a body

corporate administration. The current wording creates an unbearable

situation whereby a Court’s discretion relating to the question whether the

‘‘proprietary rights or powers of any member as an owner’’ have been

affected, is excluded. Clause 1(d) of the Bill seeks to remedy this situation.

 

CLAUSE 2

2.2. The phrase ‘‘the median line of the dividing floor, wall or ceiling’’, used in

section 5(4) of the Act, stipulates the boundary of any section in a sectional

title scheme. The phrase suggests that in the absence of a contrary indication

on the sectional plan the legal nature of any window, door or other structure,

which fills an aperture in the exterior wall, floor or ceiling of a section, is

determined by reference to that wall, floor or ceiling. It would be of

considerable assistance to those who manage sectional title schemes if the

Act is amended to provide that the median line of a section will always pass

through the centre of exterior windows, doors and other structures built into

the section’s exterior walls, floors and ceilings. The amendment of section

5(5)(a), as proposed in clause 2 of the Bill, seeks to provide for the inclusion

of any window, door or other structure which divides a section from another

section or common property to form part of such floor, wall or ceiling.

 

CLAUSE 3

2.3.1 Section 4(2) provides for a sectional title register to be opened in respect of

more than one piece of land, without having to first consolidate such pieces

of land. If any of such pieces of land is hypothecated under a registered

mortgage bond, section 40(5) of the Deeds Registries Act, 1937 (Act No. 47

of 1937), which deals with the substitution of pieces of land mortgaged and

the issuing of certificates where the bonds are cancelled, must be complied

with. However, the application of section 40(5)(a) causes grave confusion,

especially with regard to the format and content of the application. The

amendment of section 11(3)(d) of the Act as proposed by clause 3(a) of the

Bill, seeks to eliminate this confusion.

 

2.3.2 Section 11 of the Act does not provide for the lodgement of certificates of

real rights of extension and certificates of real rights of exclusive use areas,

as contemplated in sections 25(1) and 27(1) of the Act. Section 12 of the Act,

however, provides for the issuing of the said certificates by the registrar of

deeds. The proposed amendments in clause 3(b) of the Bill seek to rectify

this anomaly.

 

CLAUSE 4

2.4. Section 12(1)(e) of the Act provides for the issuing of the certificate of real

right of extension of a scheme and a certificate of real right of exclusive use

areas in respect of a condition reserved or imposed by a developer in terms

of sections 25(1) and 27(1) of the Act, respectively. This creates problems in

instances where a real right of extension is subdivided and depicted on a

plan. The amendment of section 12(1)(e), as proposed in clause 4 of the Bill,

addresses the issue.

 

CLAUSE 5

2.5 Section 14(8) of the Act makes provision for the cancellation of a registered

sectional plan only by order of the Court. A registered sectional plan may,

however, also be cancelled upon the destruction of or damage to buildings

and upon the disposal of the destruction of buildings, as contemplated in

sections 48 and 49, without the necessity of a Court Order. Clause 5 of the

Bill seeks to make it clear that a Court Order is not necessary for the

cancellation of a sectional plan where the buildings are damaged or

destroyed.

 

CLAUSE 6

2.6 Section 15B contains provisions with regard to the registration of the transfer

of ownership and other rights in a deeds registry. However, it does not cater

for the issuing of a certificate of registered sectional title to a sole owner of

a unit in respect of a fraction of an undivided share in a unit in a sectional

titles scheme. Clause 6 of the Bill seeks to rectify this situation.

 

CLAUSE 7

2.7.1 Section 24(4)(b) of the Act provides that the submission of a draft sectional

plan of extension of a section shall be accompanied by a revised schedule, in

substitution for the schedule referred to in section 7(2)(b). However,

section 7(2)(b) does not make reference to any schedule. Clause 7(a) of the

Bill seeks to remedy this defect.

 

2.7.2 Section 24(6)(d) of the Act requires the consent of every mortgagee in a

scheme if the extension of a section would result in a deviation of more than

10 per cent in the participation quota of any section. Conveyancers are not in

a position to determine any deviation and this determination must be

determined either by a land surveyor or an architect. The amendment of

section 24(6)(d), as proposed in clause 7(b) of the Bill, seeks to address this

problem.

 

CLAUSE 8

2.8.1 Section 25 of the Act provides for the extension of a scheme by the addition

of sections and exclusive use areas. The extension of a scheme by the

addition of exclusive use areas is only provided for where the addition of

rights to exclusive use is incidental or linked to the extension of the scheme

by the creation of new sections in the scheme. Section 25 does not provide

for the extension of a scheme by the addition of rights to exclusive use only.

Clause 8(a), (b), (c), and (f)-(m) of the Bill seeks to rectify the situation

pertaining to the addition of further rights.

 

2.8.2 The Act does not provide for a mechanism to extend the period of time in

which a right of extension in terms of section 25 must be exercised. The

amendment of section 25(1) by clause 8(b) of the Bill caters for this situation

by way of certain agreements which must be unanimously agreed upon

between the body corporate and bond holders.

 

2.8.3 Section 25(1) of the Act provides that a right of extension can only be

reserved in respect of a right to erect and complete a further building or

buildings or the horizontal or vertical extension of an existing building.

However, the Act does not provide for the reservation of a right of extension

in respect of a building or buildings that already exist. Clause 8(b) and (c)

provide for such a reservation.

 

2.8.4 Sections 25(4)(a) and 27(6) refer to ‘‘a right to urban immovable property’’.

The Mutual Building Societies Act, 1965 (Act No. 24 of 1965), and the

Building Societies Act, 1986 (Act No. 82 of 1986), which have since been

repealed, limited loans on mortgages to urban immovable property. Loans

for the acquisition of immovable property are regulated by the National

Credit Act, 2005 (Act No. 34 of 2005). Whereas the latter Act in general

deals with ‘‘immovable property’’, it is necessary, also for the sake of legal

certainty, to reconcile the provisions of sections 25(4)(a) and 27(6) with the

provisions of the National Credit Act, 2005. The proposed amendments in

clauses 8(f) and 9(d) of the Bill seek to achieve this goal.

 

2.8.5 Acertificate by a conveyancer issued in terms of section 15B(3)(a) of the Act

is applicable only to money due to the body corporate in respect of a unit or

undivided share therein to be transferred, and is silent with regard to money

due to the body corporate in respect of an exclusive use area and a right to

extend a scheme, as contemplated by section 25. This state of affairs is

prejudicial to the body corporate as it makes the cession of exclusive use

areas and rights of extension possible, without ensuring that moneys due to

the body corporate by holders of such rights have been duly paid. The

insertion of section 25(4A), as proposed by clause 8(g) of the Bill, remedies

this defect.

 

CLAUSE 9

2.9.1 Section 27(1) of the Act makes the registration of exclusive use areas

depicted in a sectional plan, optional. This creates an untenable situation

whereby it is possible to partially register a sectional plan. The amendment

proposed by clause 9(a) of the Bill will render the registration of exclusive

use areas depicted in a sectional plan obligatory and make it impossible to

register a sectional plan partially.

2.9.2 Section 27(4)(b) of the Act provides for the vesting of an exclusive use area

in the body corporate free from any mortgage bond. The Act, however, is

silent with regard to the position of the holder of a registered lease or holder

of a registered right to usufruct, habitatio or usus. The amendment of section

27(4)(b), as proposed by clause 9(b) of the Bill, provides for the vesting of an

exclusive use area in the body corporate free from any mortgage bond, a

registered lease, usufruct, habitatio or usus if the owner ceases to be a

member of a body corporate.

2.9.3 No provision is made in the Act for the consent by the holder of a registered

personal common law servitude or the holder of a lease to the cancellation of

an exclusive use area. The amendment of section 27(5), as proposed by

clause 9(c) of the Bill, remedies this defect.

 

CLAUSE 10

2.10 Section 29(3) of the Act provides for the consent of all bondholders for the

registration of a servitude or restrictive agreement over land in a sectional

title scheme. New bonds are registered over sections and exclusive use areas

on a daily basis and it becomes virtually impossible to get the consent of

every such bondholder. Clause 10 of the Bill proposes the amendment of

section 29(3) to make provision for the obtaining and filing, in the protocol

of the notary, of the consent of bondholders that exist on the date of

execution of such servitude or agreement. This will eliminate the problem

and also facilitate and expedite the work of conveyancers and the registrar of

deeds in this respect.

 

CLAUSE 11

2.11.1 Section 37 of the Act, to the detriment of the body corporate, does not

oblige a developer to pay attributable costs in respect of areas of common

property subject to future development rights as provided for in section 25

of the Act. The amendment of section 37(1)(b), as proposed in clause 11(a)

of the Bill, addresses this problem.

 

2.11.2 Section 37 of the Act provides for the levying of contributions. In terms of

section 37(2) contributions so levied are due and payable on the passing of

a resolution by the trustees of the body corporate and the persons who were

owners of units at the time the resolution was passed, are liable for the

payment thereof. The Act, however, does not regulate the payment of

contributions where ownership has changed. The addition of the proviso to

this subsection, as proposed in clause 11(b) of the Bill, seeks to give clarity

on the question pertaining to the payment of contributions in cases where

ownership of units has changed. Payment of contributions is also extended

to right holders of exclusive use area and real rights of extension.

 

2.11.3 Section 37 of the Act does not provide for the levying of special

contributions. Over the years the levying of special contributions by the

trustees of bodies corporate has, however, become a general established

practice. The amendment proposed in clause 11(c) of the Bill merely

confirms and legalises a situation that has existed for a considerable number

of years.

 

CLAUSE 12

2.12 Section 44(1)(g) of the Act provides for the use of a section as shown on a

registered sectional plan. This section, however, does not deal with the use of

an exclusive use area. This state of affairs has resulted in the use of exclusive

use areas for purposes for which they could not have been intended, for

example garages being used for residential purposes. Clause 12 of the Bill

seeks to include the regulation of the use of exclusive use areas for purposes

shown on the registered sectional plan.

 

CLAUSE 13

2.13 Clause 13 of the Bill proposes the amendment of section 54(2)(c)(i) of the

Act, in order to provide for the change of name of the Association of Law

Societies of the Republic of South Africa to the Law Society of South Africa.

 

CLAUSE 14

2.14 Section 60 of the Act still contains provisions in respect of savings and

transitional provisions that have already lapsed. The amendment of section

60, as proposed in clause 14 of the Bill, seeks to omit these provisions.

 

CLAUSE 15

2.15 The amendment of section 60A of the Act, as proposed in clause 15 of the

Bill, is a consequential amendment due to the amendment of section 60, as

referred to in paragraph 2.14 above.

 

CLAUSE 16

2.16 Clause 16 of the Bill contains the short title.

3. DEPARTMENTS / BODIES / PERSONS CONSULTED

• The Law Society of South Africa

• The South African Council for the Architectural Profession

• The South African Council for Professional and Technical Surveyors

• The Banking Council of South Africa

• The Institute of Estate Agents of South Africa

• National Association of Managing Agents