Issues to Consider when Buying into a Sectional Title Scheme: [an extract from an Article written by: Lisa Schmidt and Nicole Rens – Schindlers Attorneys – 6 August 2024]
This article will look at issues that any buyer in a Sectional Title Scheme should consider before purchasing. Once you have signed your sale contract, you might find yourself unhappy with the decision to purchase on the terms contained therein if you were not aware of these issues.
In discussing this topic, we will consider the Sectional Titles Act 95 of 1986 (“the STA”), the Sectional Title Schemes Management Act 8 of 2011 (“the STSMA”), Exclusive Use Areas (“EUA’s”) as defined in the STSMA and situations in which a developer reserves a right to extend a scheme as defined in section 25 of the STA.
Ownership v Use in Sectional Titles:
The concepts of “use” “ownership” are entirely different in law and should not be confused when dealing with sectional title schemes. When you buy a unit in a scheme, you are purchasing your home (referred to as the section) together with an undivided share in the common property in the rest of the scheme. Together, your section plus your undivided share in the common property make up your ‘unit’.
In the Deeds Office your unit will be registered in your name and you will be regarded as the owner of your unit.
However, when purchasing a home with a garage, balcony, patio, porch, garden or the like, do not automatically assume that these areas form part of the section that you are buying and that you will acquire ownership over these areas when you buy your section…
Exclusive Use Areas (EUA’s)
An EUA is defined in section 1(c) of the STSMA as “part or parts of the common property for the exclusive use by the owner or owners of one or more sections.”
The Developer’s Reserved Right / Right of Extension Clause ( section 25 of the STA)
Section 25 of the STA deals with the right of a developer to extend a scheme (“the right of extension”) and states as follows:
“A developer may, subject to the provisions of section 4 (2), in his application for the registration of a sectional plan, reserve, in a condition imposed in terms of section 11 (2), the right to erect and complete from time to time, but within a period stipulated in such condition for his personal account;…
Conduct Rules and Management Rules in a Sectional Title Scheme
Be well advised to read and familiarise yourself with a scheme’s conduct and management rules before purchasing a unit within a scheme…
Management Rules are defined in section 25(2) of the STSMA act as follows:
“Management rules, prescribed by regulation, which rules may be substituted, added to, amended or repealed by the developer when submitting an application for the opening of a sectional title register…
Conduct Rules are defined in section 25(2) of the STSMA as follows:
“conduct rules, prescribed by regulation, which rules may be substituted, added to, amended or repealed by the developer when submitting an application for the opening of a sectional title register…
The Original Full Article can be Viewed here → Issues to Consider when Buying into a Sectional Title Scheme – Schindlers Attorneys