Sectional Titles Amendment Bill [B8-2006]: Briefing; Deeds Registries Amendment Bill: voting

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Meeting report

 

AGRICULTURE AND LAND AFFAIRS PORTFOLIO COMMITTEE
24 May 2006
SECTIONAL TITLES AMENDMENT BILL: BRIEFING; DEEDS REGISTRIES AMENDMENT BILL: VOTING

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Sectional Titles Amendment Bill
Presentation to the Portfolio Committee on Agriculture and Land Affairs on the Sectional Titles Amendment Bill 2006 – by the Chief Registrar of Deeds

SUMMARY
The Committee adopted the Deeds Registries Bill with only minor amendment to the Memorandum of the Objects of the Bill.

It was briefed on the five clauses of the Sectional Titles Amendment Bill. Its key objective is to provide for the extension of the registration of a sectional mortgage bond to include exclusive use areas. The current Act allowed only for registration over a unit and the right does not extend to exclusive use areas which are linked to the main area or unit. Other of the amendments are necessary to update the Bill especially where reference had been made to the old Land Survey Act.

MINUTES
Deeds Registries Amendment Bill: voting
Two minor amendments were made to the Memorandum on the Objects of the Bill before the Bill was adopted by the Committee.

Sectional Titles Amendment Bill
Mr Colin Brocker, Head of Legal Services: Department of Land Affairs, noted that the Bill amended the Sectional Titles Act, No 95 of 1986, which is legislation governing ownership of flats, apartments and townhouses and other building developments where there are multiple owners.

Clause 1 deals with the definition of a 'sectional mortgage bond'. The proposed amendment seeks to extend the registration of a 'sectional mortgage bond' to exclusive use areas and undivided shares in exclusive use areas. It also provides consequential amendments to the definition of "Surveyor General" as it contained reference to the Land Survey Act of 1927 which had been repealed.

Clause 2 deals with the problems encountered in terms of section 15B. Where a joint holder of an exclusive area or reserved real right is not able to obtain a separate title deed for his or her undivided share. It is necessary that a separate title deed be issued, therefore the clause proposes the registration of a certificate of real right in respect of a share in an exclusive use area.

Clause 3 proposes an amendment to section 26 of the Act, which empowered the body corporate to purchase land to extend the common property but did not provide for the acquisition of land in any other manner such as donation, exchange or bequest.

Clause 4 seeks to delete the proviso to section 36(2), as a consequential amendment to the definition of 'owner', which had been amended previously.

Clause 5 is a general amendment which seeks to reflect the correct statutory situation as many of the sections of the Act still refer to the Land Survey Act of 1927, which had in fact been amended and substituted by the 1997 Act.

Mr S Ogunroubi, Legal Services: Department of Land Affairs, noted the deficiency in the Act that while there is a certification over the unit itself, this does not extend to any exclusive use area, which is fixed to a particular unit. This certification should be extended to exclusive areas such as a garage for example that forms part of the unit.

Discussion
The following questions were raised:
What was the role of managing agents and who monitors them? The management agency appeared to have more power than the body corporate.

The Department replied that the managing agents were appointed by the body corporate. They in effect take over the functions of the owner. The managing agents manage the property / development on behalf of the body corporate, and perform general maintenance and address day-to day issues of the development. They should be monitored therefore by the body corporate. There is legislation drafting currently underway to address this issue.

Had the draft Bill been sufficiently canvassed in order to obtain a broad range of views?

The Department replied that the Sectional Titles Regulation Board, on which all stakeholders were represented, was in support of these amendments. A decision taken by this Board is a collective decision. All the representatives have voting rights. He named examples of representatives such as the South African Banking Council and the Property Owners Association. These representatives are entitled to refer the matter to anyone who has an interest. Therefore even ordinary members of the public can give their input through their representatives. In effect, a three layer consultation process would have occurred.

Did individual owners own the entertainment areas of a sectional title building? Is the price of the entertainment area included in the purchase price of the common property?

The Department replied that entertainment areas were part of the common property, which was enjoyed by all the owners collectively. Property which is owned communally by the owners is not registered in an individual's name but belongs to the body corporate. Ownership in a sectional unit provides a pro-rata share in the common property. The purchase price would always include the pro rata share in the common property.

In reply to concerns of misuse of powers, the Department said that it was drafting legislation to provide an ombudsman to deal with problems relating to sectional titles. Other relevant departments such as Finance and Housing were being consulted about the ombudsman legislation. The Sectional Titles Act referred only to arbitration as a mechanism to solving conflict and this was very expensive.

Will this Bill be referred to the House of Traditional Leaders?
The Department replied that there still needed to be clarity as to whether or not the Bill needed to be referred to the House of Traditional Leaders

Will Sectional Titles Amendment Bill apply to communal land areas?
The Department replied that the Sectional Titles Bill can apply to Communal Land areas but with certain notifications. Communities will have to play an important role.

In cases where a development is phased, can registration happen while other units are still being built?
The Department replied that registration can happen in instances of phased development.

In the long run, how will RDP (Reconstruction and Development Programme) Houses fit into the Sectional Titles legislation and ultimately, who do those houses belong to?

In the instances of RDP houses owned by municipalities and other government departments such as in social housing schemes, the houses are leased rather than sold.

Meeting adjourned.

 

 

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