Allen West Conveyancing Update

Once the developer ceases to be a member of the body corporate, as contemplated in Section 2(2) of the Sectional Title Schemes Management Act, 8 of 2011,(STSMA), the right to all exclusive use areas still registered in its/ his/her name, vests in the body corporate, free from any mortgage bond (s 27(1)(c)). Pending the amendment to the Sectional Titles Act 95 of 1986(STA), it will also vest in the body corporate free from any other registered real rights (consult RCR75/2011). One will have to differentiate between exclusive use areas that will vest in the body corporate in terms of s 27(1)(c) and exclusive use areas created as a result of exercising a right to extend a scheme by the addition of exclusive use areas only, in terms of s 25(1). In the latter instance the developer will have 12 months to cede the exclusive use areas, where after it will also vest in the body corporate. A caveat must be noted against the exclusive use areas to indicate that it must be ceded within the 12-month period (RCR 74/2011). For purposes of calculation of the 12 months, the date of the cession will be the date of execution of the notarial deed (RCR 72/2011). Section 25(5) will not find application where the developer is still the owner of a section in the scheme (RCR 73/2011). 

If the right to exclusive use areas is vested in the body corporate, as contemplated in s 27(1)(c) of the STA, the body corporate may obtain a title deed for the exclusive use area upon lodgement of the following deeds and documents: 

• An application in the prescribed Form AG for the issuing of a certificate or certificates of real right of exclusive use area (s 27(1)(d)(i) and reg 28(4)(a)). One should take note that Form AG and Form AH have been amended to indicate ‘the description of the land as indicated on the sectional plan’; however, CRC 9/2017 has suspended the implementation of the new forms. The status quo as before the amendment must therefore remain, eg ‘to insert name of township/suburb and local authority’. 

• A certificate of compliance with any law dealing with vesting, issued by the body corporate (s 27(1)(d)(ii) and reg 28(4)(e)). 

• A certificate or certificates of registered real right in favour of the body corporate in prescribed Form AH (s 27(1)(e) and reg 28(4)(a)). 

• Title deed of the real right of exclusive use area for endorsement regarding the vesting of the exclusive use area in the body corporate and the issuing of the certificate of real right (reg 28(4)(c)). If the body corporate is unable to obtain the title deed, it must submit to the registrar an affidavit stating the reasons why it has been unable to produce the title deed. The registry duplicate will then be endorsed regarding the fact of the vesting of the exclusive use area and issuing of the certificate of real right (reg 28(4)(d)). 

• The sectional mortgaged bond registered over the exclusive use area, if available. Alternatively, the Registrar will endorse the registry duplicate of the bond regarding the fact of the vesting of the exclusive use area in the body corporate, free from the bond, and for the issuing of the certificate of real right in favour of the body corporate (reg 28(4)(b)). 

Issuing of a certificate of real right of exclusive use areas in favour of the body corporate in terms of s 27(4)(c) 

Once a sectional owner ceases to be a member of the body corporate as contemplated in s 2(3) of the STSMA, without ceding his/her interest in an exclusive use area registered in his/her favour, such right(s) vest(s) in the body corporate free from any mortgage bond or registered real right (s 27(4)(b)). 

If the right to exclusive use areas is vested in the body corporate, as contemplated in s 27(4)(b) of the STA, the body corporate may obtain a title deed for the exclusive use area upon lodgement of the following deeds and documents: 

• An application in the prescribed Form AG for the issuing of a certificate of real right of exclusive use area (s 27(4)(c)(i) and reg 28(4)(a)). 

• A certificate of compliance with any law dealing with vesting, issued by the body corporate (s 27(4)(c)(ii) and reg 28(4)(e)). 

• A certificate of registered read right in favour of the body corporate in the prescribed Form AH (s 27(4)(d) and reg 28(4)(a)). 

• Title deed of the real right of exclusive use area for endorsement regarding the vesting of the exclusive use area in the body corporate and the issuing of the certificate of real right (reg 28(4)(c)). If the body corporate is unable to obtain the title deed, it must submit to the Registrar an affidavit stating the reasons why it has been unable to produce the title deed. The registry duplicate will then be endorsed regarding the fact of the vesting of the exclusive use area and issuing of the certificate of real right (reg 28(4)(d)). 

• The sectional mortgaged bond registered over the exclusive use area, if available. Alternatively, the Registrar will endorse the registry duplicate of the bond regarding the fact of the vesting of the exclusive use area in the body corporate, free from the bond and for the issuing of the certificate of real right in favour of the body corporate (reg 28(4)(b)). 

Should you require any more information on this matter, do not hesitate to contact us. 

Allen West
TONKIN CLACEY PRETORIA 
012 346 1278

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