Lexicon News Blog

In the bustling property market of South Africa, the concept of sectional title living has gained significant traction. With the rise in demand for apartments, townhouses, and other multi-unit properties, understanding the rules governing sectional titles has become paramount.

As attorneys of conveyancing and property law services in South Africa, we aim to shed light on the intricate web of sectional title rules in this blog.

What is a Sectional Title?

The concept of a sectional title is rooted in the unique property landscape of South Africa and caters to the evolving needs of urban dwellers. As cities expand and the demand for housing increases, the traditional model of property ownership has had to adapt. Enter the sectional title, a solution that allows multiple individuals to have ownership within a single property or development.

Understanding the Basics

At its core, a sectional title refers to a distinct form of property ownership. Instead of owning an entire property outright, individuals own a specific portion or 'section' of a larger property or development. This 'section' can be an apartment, a townhouse, or any other unit within a complex.

Comparison with Full Title Ownership

To truly grasp the concept of sectional title, it's essential to contrast it with full title ownership. In a full title scenario, an individual owns both the structure (like a house) and the land it's built upon. They have complete autonomy over the property and are solely responsible for its maintenance and upkeep.

On the other hand, sectional title ownership is more communal. While you own your specific unit or section, there are shared areas known as 'common property.' These can include hallways, gardens, swimming pools, and other amenities that all residents of the development can use.

The Sectional Titles Acts

In South Africa, the governance of sectional title schemes is primarily regulated by two acts: the "Establishment of Sectional Title Development" and the "Sectional Titles Management Act." Here's a more detailed explanation of each:

Establishment of Sectional Title Development

This is usually governed by the "Sectional Titles Act of 1986" (Act No. 95 of 1986), which provides the legal framework for the establishment and registration of sectional title developments. This act outlines the procedures for subdividing land into sections and common property, and it sets the rules for the registration of these subdivisions.

Key Points:

• Land Survey and Plans: The act specifies the requirements for land surveying and the preparation of sectional plans.
• Ownership and Rights: It defines how ownership is allocated for each section and the common property.
• Registration: The act outlines the process for registering the sectional title scheme with the Deeds Office.
• Legal Requirements: It sets out the legal requirements for the establishment of a body corporate, which will manage the common property on behalf of the owners.

Sectional Titles Management Act

This is governed by the "Sectional Titles Schemes Management Act of 2011" (Act No. 8 of 2011). This act focuses on the management and administration of sectional titles once they have been established.

Key Points:

• Body Corporate: The act mandates the establishment of a body corporate for every sectional title scheme, which is responsible for managing the scheme.
• Management Rules: It sets out the standard management rules that govern the conduct of the body corporate and the owners.
• Financial Management: The act outlines the financial responsibilities of the body corporate, including the establishment of a reserve fund for long-term maintenance.
• Dispute Resolution: It provides mechanisms for resolving disputes between owners and the body corporate.
• Governance: The act outlines the roles and responsibilities of the trustees who are elected to manage the body corporate.

Both acts work in tandem to ensure that sectional title schemes are both legally established and effectively managed. The "Sectional Titles Act" focuses on the legal creation of these schemes, while the "Sectional Titles Schemes Management Act" ensures their ongoing governance and management.

The cornerstone of sectional title ownership in South Africa is the Sectional Titles Act. This legislation provides the framework for the establishment and management of sectional title schemes. It outlines the rights and obligations of owners, and how common property should be managed and maintained.

Key Provisions of the Act

The Sectional Titles Act is comprehensive, covering a wide range of aspects related to sectional title schemes. Some of its key provisions include:

• Establishment of Sectional Title Schemes: The Act provides guidelines on how sectional title schemes can be established, including the requirements for the creation of sectional plans and the registration of these schemes.
• Rights and Obligations of Owners: One of the Act's primary objectives is to ensure that owners within a sectional title scheme are aware of their rights and obligations. This includes their right to use and enjoy their property, their responsibility to pay levies, and their obligations regarding the maintenance of their sections.
• Management of Common Property: The Act recognises that common property is a shared responsibility. It provides directives on how common areas, such as gardens, swimming pools, and parking lots, should be managed and maintained. This includes the allocation of costs and the establishment of processes for decision-making regarding these areas.
• Role of the Body Corporate: The Body Corporate is the governing entity of a sectional title scheme, and the Act outlines its powers, functions, and responsibilities. This includes the election of trustees, financial management, and the enforcement of rules.
• Dispute Resolution: Recognizing that disputes can arise in communal living setups, the Act provides mechanisms for resolving conflicts. This includes the establishment of tribunals or other bodies to mediate and adjudicate disputes.

Amendments and Updates

It's worth noting that the Sectional Titles Act has undergone various amendments over the years. These changes reflect the evolving nature of property ownership in South Africa and aim to address new challenges and scenarios that arise within the world of sectional titles.

Role of the Body Corporate

Every sectional title scheme has a governing body known as the Body Corporate. This entity is responsible for managing the common property and ensuring that the rules of the scheme are adhered to. All owners within the scheme are automatically members of the Body Corporate.

Key Responsibilities

The Body Corporate wears many hats, but its primary responsibilities can be distilled into the following:

• Management of Common Property: The Body Corporate oversees the maintenance, repair, and overall management of common areas such as gardens, lobbies, swimming pools, and parking spaces. This includes everything from landscaping to security measures.
• Financial Management: One of the Body Corporate's crucial roles is to manage the scheme's finances. This involves setting budgets, determining levies, managing funds, and ensuring that expenses like insurance, utilities, and maintenance are covered.
• Enforcement of Rules: Every sectional title scheme operates under a set of rules, both management and conduct. The Body Corporate ensures that these rules are adhered to, addressing violations and, if necessary, taking corrective actions.
• Decision Making: The Body Corporate is the decision-making body for the scheme. This includes decisions about improvements to common property, the hiring of service providers, and any other matters that affect the community.
• Conflict Resolution: In a community of diverse individuals, disputes are inevitable. The Body Corporate often plays a mediating role, helping to resolve conflicts and ensuring harmony within the scheme.

Management and Conduct Rules

The Sectional Titles Act prescribes two sets of rules – the Management and Conduct Rules:

Management Rules

Management Rules are the backbone of the administrative and governance aspects of a sectional title scheme. They provide a blueprint for how the Body Corporate should operate and make decisions.

Key components of management rules include:

• Formation of the Body Corporate: These rules outline the automatic establishment of the Body Corporate upon the registration of a sectional title scheme.
• Election of Trustees: The rules provide guidelines on how trustees are elected, their tenure, and the process for their removal if necessary. Trustees play a pivotal role in the day-to-day management of the scheme, acting on behalf of all owners.
• Meetings: The frequency, nature, and procedures for meetings, including Annual General Meetings (AGMs) and Special General Meetings (SGMs), are detailed in the Management Rules. This ensures transparency and participation from all members.
• Financial Management: These rules offer a framework for the financial responsibilities of the Body Corporate, including budgeting, levy determination, and financial reporting. They ensure that the scheme remains financially viable and that funds are used judiciously.
• Insurance: Given the communal nature of sectional title schemes, insurance is crucial. The Management Rules provide directives on insuring the property, determining the value, and handling claims.

Conduct Rules

While Management Rules focus on governance, Conduct Rules are all about behavior. They aim to ensure that all residents can coexist peacefully, respecting each other's rights and the communal nature of the property.

Key components of conduct rules include:

• Noise and Disturbances: Recognizing that close living can lead to disturbances, these rules set guidelines on acceptable noise levels, especially during certain hours, to ensure that all residents can enjoy peace and quiet.
• Pet Ownership: Not all sectional title schemes allow pets, and those that do often have specific rules. These can pertain to the type and number of pets, leash requirements, and areas where pets are allowed.
• Use of Common Property: With shared spaces like gardens, pools, and gyms, it's essential to have rules that dictate their use. This includes operating hours, guest policies, and maintenance responsibilities.
• Alterations and Renovations: To maintain the aesthetic and structural integrity of the property, rules regarding alterations to individual units and common areas are set. This often requires approval from the Body Corporate before any changes are made.
• Parking and Vehicles: Given the limited space in many schemes, rules regarding parking spots, guest parking, and vehicle maintenance are crucial to avoid disputes.

While the Act provides default rules, the Body Corporate can amend them, provided they do not contravene the Act's provisions.

Exclusive Use Areas

Certain parts of the common property, like parking bays or gardens, can be designated as exclusive use areas. This means that while they remain part of the common property, a specific owner has the exclusive right to use them.

Examples of Exclusive Use Areas

• Parking Bays: In many sectional title schemes, parking is at a premium. While there might be communal parking areas, certain bays might be designated as EUAs, ensuring that a specific owner always has a spot available.
• Gardens and Patios: In some developments, ground-floor units might have access to a garden or patio area. While this space is technically part of the common property, it might be designated as an EUA for the ground-floor unit owner.
• Storage Units or Lockers: In complexes where storage is limited, specific storage spaces might be allocated as EUAs, ensuring that certain owners have exclusive storage rights.
• Balconies: Even though they are attached to specific units, balconies can sometimes be considered common property. However, they are typically designated as EUAs, granting exclusive rights to the unit owner.

Legal Framework and Registration

Exclusive Use Areas are typically defined and delineated in the sectional plan of the property. This plan will clearly indicate which parts of the common property are designated as EUAs and to which unit or owner they are allocated.

In terms of legal registration, there are two primary methods:

• By Title Deed: Here, the EUA is registered in the Deeds Office, providing the owner with a title deed for that specific area. This method offers a more robust legal standing.
• By Rule: The Body Corporate can establish EUAs by adopting a conduct rule. While this method is simpler, it doesn't provide the same level of legal protection as a title deed.

Rights, Responsibilities, and Levies

Owners with Exclusive Use Areas have the right to use and enjoy these areas without interference. However, they also typically bear the responsibility for their maintenance and upkeep. This means that if a garden designated as an EUA needs landscaping or a parking bay requires repainting, the costs usually fall on the owner with the exclusive rights.

Furthermore, the Body Corporate might impose specific levies related to EUAs. These levies cover the costs of managing and maintaining these areas and can vary based on the nature and size of the EUA.

Financial Responsibilities

Owners within a sectional title scheme have financial obligations. They are required to pay monthly levies, determined by the Body Corporate, to cover expenses like maintenance, insurance, and management fees. Failure to pay these levies can result in legal action.

Monthly levies are the lifeblood of a sectional title scheme. They are collective contributions made by all owners to fund the various expenses associated with managing and maintaining the property.

Components of Monthly Levies

• Maintenance Costs: This covers the upkeep of common areas like gardens, swimming pools, hallways, and roofs. It also includes expenses for repairs, painting, and other necessary works to keep the property in good condition.
• Insurance: The Body Corporate is typically responsible for insuring the building and common areas against risks like fire, theft, or damage. Owners' contributions to this insurance are part of the monthly levies.
• Management Fees: If the Body Corporate hires a managing agent or other professionals to assist in the administration of the scheme, their fees are covered by the levies.
• Security and Services: In many complexes, there are costs associated with security services, cleaning, and other utilities for common areas. These are also funded through monthly levies.
• Reserve Fund: A portion of the levies might be allocated to a reserve fund. This fund is set aside for long-term or unexpected expenses, ensuring the scheme can handle significant repairs or upgrades without financial strain.

Determining the Amount

The amount each owner pays as a monthly levy is usually determined by the Body Corporate, often during the Annual General Meeting (AGM). Factors considered include the scheme's budget, upcoming projects or repairs, the size of the reserve fund, and the participation quota of each unit (which can be based on its size or value).

Consequences of Non-Payment

Paying levies is not optional; it's a legal obligation. Failure to meet this responsibility has consequences:

• Interest: Owners who default on their levies might be charged interest on the outstanding amount, increasing their financial burden.
• Legal Action: The Body Corporate has the right to take legal action against defaulting owners to recover unpaid levies. This can result in a judgment against the owner, which can have further financial and legal implications.
• Limited Participation: In some schemes, owners who are in arrears might be restricted from participating in certain Body Corporate decisions until their debts are settled.

Dispute Resolution

Disputes within a sectional title scheme can arise for various reasons, from levy disputes to conduct rule violations. The Community Schemes Ombud Service (CSOS) is a statutory body that provides an alternative dispute resolution service for sectional title schemes, ensuring that conflicts are resolved amicably and efficiently.

Common Causes of Disputes

• Levy Issues: Disagreements over the amount, frequency, or use of levies can be a significant source of contention. Some owners might challenge the fairness of their levies or dispute arrears.
• Conduct and Management Rule Violations: Breaches of the scheme's rules, whether intentional or due to ignorance, can lead to conflicts. This could range from unauthorized renovations to noise complaints.
• Exclusive Use Areas: Misunderstandings or disagreements about the rights and responsibilities associated with Exclusive Use Areas can lead to disputes.
• Maintenance Responsibilities: Conflicts can arise over the maintenance of common areas or individual units, especially regarding who should bear the costs.
• Behavioral Issues: Personal disagreements, nuisances, or anti-social behavior can also lead to disputes within the community.

Selling a Sectional Title Unit

When selling a sectional title unit, owners must ensure that all levies are up-to-date. The Body Corporate will issue a levy clearance certificate, which is essential for the transfer process. Additionally, potential buyers should be made aware of the scheme's rules and any potential special levies.

The Role of Conveyancers

Conveyancing, the legal process of transferring property from one owner to another, is a complex procedure that requires expertise and precision. At the heart of this process are conveyancers, legal professionals specialized in property transfers. Their role is especially crucial in the context of sectional title properties, given the unique considerations these entail.

 

Sectional title living offers numerous benefits, from shared maintenance costs to enhanced security. However, it also comes with its set of rules and responsibilities. By understanding the intricacies of the Sectional Titles Act and the associated rules, owners can ensure harmonious living and protect their investment.

LexIcon Attorneys – Conveyancing and Property Law Attorneys South Africa

For expert guidance on sectional title rules and other property law matters, consider seeking the services of a reputable law firm specializing in conveyancing and property law in South Africa.