This week our panel of experts addresses the issue of whether a sectional title scheme could be converted into a homeowners’ association.
As manager of a body corporate, one of our readers is often confronted by annoyed sectional title owners who cannot understand why they require permission to make alterations to their property. She would like to know if they could be appeased through a change in the structure of ownership.
“To answer this, we really have to look at each structure and how it comes about,” says Lucille Geldenhuys from Lucille Geldenhuys Attorneys in Stellenbosch. “The solution is then quite simple.”
Geldenhuys says the basic premise behind fixed property ownership is that, legally speaking, a landowner is also considered the owner of any building erected on that land.
“Furthermore, a building is seen as one unit with single ownership. In other words, different parts cannot be owned by different people.”
According to Geldenhuys, changing housing needs necessitated certain legal revisions with regard to the definitions of property ownership.
“The legislation now allows different owners to own a portion of, or unit in, one building or property,” says Geldenhuys. “This means different owners can obtain proprietary rights to buildings erected on one undivided piece of land.”
Geldenhuys says a sectional title owner would have exclusive ownership of a “section” plus ownership of an undivided share in the common property.
“This could include, for example, the pathways between the different units in a sectional title complex, swimming pool, stairways and lifts.”
The sectional owners form a body corporate, says Geldenhuys, which then nominates trustees to handle various administrative decisions.
By comparison, says Schalk van der Merwe from Rawson Properties Helderberg, a homeowners’ association (HOA) is usually found in so-called cluster housing.
“This is where a development is built on a piece of land with a shared, privately-owned open space for amenities. Each owner obtains a separate title deed for his or her piece of land and has a joint right to use the infrastructure and common facilities.”
Van der Merwe says the HOA, which is often established as a non-profit Section 21 company, would own the common areas and act on behalf of the various owners.
“So this is really just an instance where the local authority relaxes its normal building restrictions and houses are located closer together.
Each owner still has registered ownership of the subdivision, says Van der Merwe, and may use and maintain the land and buildings as he or she pleases.
“This is, of course, subject to any restrictions imposed by the title deed or the rules and constitution of the HOA.”
There are certain fundamental legal differences in the structuring of sectional title schemes and cluster housing under an HOA, says Van der Merwe. “One cannot simply be converted into the other.”
Van der Merwe advises buyers to ensure that they understand exactly which structure they are buying into and what the legal consequences and their associated responsibilities are.
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