Sectional Title
Key Takeaways:
Sectional title ownership offers shared property rights within a community.
Owners contribute to upkeep via levies, and decisions are made collectively in body corporate meetings.
Understanding regulations and active participation are key for a harmonious sectional title living experience.
Conveyancing relates to the legal process that transfers ownership of the home from the seller to the buyer. The conveyancer (who is an attorney) is usually appointed by the seller, but paid for by the buyer (the fact that the fees are normally covered by the buyer is simply a rule of thumb.
It’s not something that is necessarily set in stone and a different arrangement can be negotiated in your agreement of sale).
What is Conveyancing?
Conveyancing is not only a complicated process, but a time consuming one as well. Particularly in transactions related to the subdivision or consolidation of properties, the registration of servitudes or transfers of both divorce or deceased estates. Benaters are specialists in the field of property and conveyancing and are perfectly poised to assist their clients with all matters of property transfers. Get in touch with them today to see how they can assist you.
What does the transfer of property entail?
Once a seller has accepted an offer to purchase (meaning the transfer process has officially begun), the buyer must produce proof that that their bond application has been successful.
Following that, the seller must then appoint a transfer attorney, (who is a conveyancing attorney) to handle the transfer process. Transferring attorneys are one of three attorneys who will play an important role in the home buying process. This team of attorneys includes
the transfer attorney, or the conveyancer who is responsible for registering the property in the new owner’s name,
the bond attorney (appointed by the bank) who is responsible for registering the bond in the home buyer’s name, and
the cancellation attorney (appointed by the bank) who is responsible for attending to the existing bond cancellation.
Once the transfer duty has been paid, all documents have been lodged at the Deeds Office and the transfer attorney has finalised their accounts and paid over all proceeds to the seller, commission to the agent and refunded any credit that is due to the seller (within 12 months), registration of the property (meaning the purchaser is now the new rightful owner of the home) should then occur.
What does a Conveyancer do?
Firstly, it must be noted that no property sale or transfer can be concluded without having a qualified conveyancer on board.
A conveyancer is a lawyer that has passed an additional conveyancing qualification exam and is a specialist in the field of property and conveyancing. They perform a vital function where completing a property transaction is concerned.
Conveyancers attend to the process of transferring legal ownership of fixed property from one person (or a company or trust) to another. In a nutshell, this process amongst other things, involves ensuring the deed of sale meets all the legal requirements, including requesting and collecting supporting information (such the mortgage bond, cancellation figures, title deeds from the seller’s bank, compliance certificates from the seller, and the amounts from the municipality for a rates clearance certificate).
The conveyancer is also tasked with drafting all the necessary documentation (such as a “power of attorney to pass transfer” for the seller to sign, a declaration in respect of marital status, ID Number as well as the bond registration documentation for the purchaser when registering the bond) that needs to be lodged with the deeds office to finalise the registration of the sale.
What is a sectional title?
A sectional title consists of a part of a building or a separate building on a piece of land that has been converted into a sectional title scheme by means of the Sectional Titles Act No 95 of 1986.
Note: Prior to the Sectional Title Act, there was no provision in our law for the shared ownership of immovable property in undivided shares. Our law only made provision (under the Share Block Control Act 59 of 1980) for a company to own shares in property which entitled it to the use of a specific portion of the building.
The Sectional Titles Act now makes provision for individual owners to own a specific sectional-title unit or section (which comprises of the section and an undivided share in the common property).
All the sections together with the common property comprise the “Scheme”.
How is a sectional title scheme established?
Freehold (or standalone) property is converted in the Deeds registry to a sectional title property my means of an application to the Deeds office.
Amongst the various documents filed together with such application will be the sectional title plans, which are drawn up by a land surveyor and approved by the Surveyor General. The sectional plans will indicate the section, common property and any exclusive use areas.
Note: the door numbers on each unit may differ from the Deeds registry section number. Both should be recorded in any sale agreement.
Is ownership in a sectional-title actually transferred?
In short – yes.
Once the transfer of the sectional title has been registered in the Deeds Office (see above) the title holder is owner of that unit (together with an undivided share in the common property). A Title Deed is issued upon registration of transfer of the sectional title unit, as proof of ownership.
Note: A Notarial Deed of Cession is issued in respect of certain exclusive use areas.
What is common property?
The common property comprises of areas which are utilised by all owners of each sectional-title unit, e.g. the grounds, driveways, roads, recreation facilities, corridors, entrance areas and exteriors of the building.
What is an exclusive-use area?
Exclusive use areas represent a portion of the common property over which a particular owner has exclusive use.
NOTE: the exclusive use area is not actually owned by the section or unit owner but rather the section owner has the right of exclusive use of that portion of the common property.
A perfect example of an exclusive use area are parking bays, garages, storerooms, balconies, stairwells and unit gardens.
When a section or unit owner sells his/her section or unit, any exclusive use area (such as the parking bay) must be sold at the same time.
Exclusive use areas are one of the most problematic sectional title issues. Each Scheme is different with regard to the registration and recording of exclusive use areas.
To avoid confusion and to seek guidance on sectional title exclusive use areas, get in touch with Benaters who will be able to guide you in the right direction.
What is a Body-Corporate?
All the owners of sections in the Scheme automatically constitute the Body Corporate. At an annual general meeting (AGM) of all the owners, trustees are elected to act on behalf of the body corporate and to carry out the day to day running of the Scheme.
In situations where there are a large number of units, the trustees often make use of managing agents to assist them (quite a common practice).
Are Deeds Office searches necessary?
Prior to dealing with sectional title property a person and property deeds search should be conducted.
The property search will contain the details of the property searched (the property search will indicate if there is a Section 25 Real Right of extension registered) whilst the person search will describe what properties are registered in the name of the person searched (i.e. different Schemes are registered in different ways and the details of ownership need to be established. The property owner may in fact own more than one section or unit. A perfect example is where the actual home and the garage are registered as different sections in which case both sections must be referred to in the sale agreement).
Note: a real right of extension is the extension of a sectional title scheme by the addition of sections and/or exclusive use areas. Section 25(1) of the Sectional Titles Act (the Act) describes a real right of extension as “the right to erect, complete or include from time to time, but within a period stipulated in such condition or such extended period as may be agreed upon by unanimous resolution of the body corporate and bondholders from time to time, prior to the expiry of the stipulated period”.
Why should you hire a Conveyancer to handle your sectional-title scheme?
When it comes to sectional title schemes, there are many legal aspects that need to be taken into account and with that, a fair amount of misunderstanding that needs to be clarified.
These “misunderstandings” often gives rise to many problems and disputes in sectional title schemes which can be easily avoided, especially when properly advised and supported.
It is therefore crucial to involve a qualified Conveyancer (like those at Benaters) in the whole process (from the very beginning) in order to establish which procedures to follow in relation to a particular Scheme (remember there are many nuances here).
But an experienced Conveyancer will be able to guide and advise you properly, ensuring that any involvement you have with a sectional-title scheme is smooth sailing.
Why should you trust Benaters with your sectional title?
We have successfully handled many sectional-title transfers across South Africa. Sure, there are many pitfalls that exists with sectional-titles but with us at your side, they will be easy to navigate your way around.
We are proud to be able to offer Conveyancing, a specialised niche service to you, our clients. We take our duties as Conveyancers very seriously (always keeping in mind the impact a property transfer can have on an individual or family) and therefore hold our work to very high standards. You can trust us with your property, because we treat the entire process as if we were going through it ourselves.
We are here to help you. In any way we can!
So please, get in touch and let us handle your property transfer in the best way we know how – professionally and with the utmost due care.