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Addition of land to common property

14 November 2013

Extension of a scheme by the addition of land to the common property must not be confused with the extension of a scheme by the addition of sections and exclusive use areas. In the latter instance the developer reserves the right to extend the scheme in terms of section 25 of the Sectional Titles Act, 95 of 1986, (“the Act”) in order to extend the scheme by the addition of sections and/or exclusive use areas. The developer thereafter exercises his/her right of extension, so reserved and registered. In this article it is not the extension of a scheme in terms of section 25 that will be entertained, but the extension of a scheme by addition of land to the common property, as provided for in section 26 of the Act.

Section 26 of the Act provides as follows:

“(1) A body corporate, authorized thereto in writing by all of its members, may purchase or otherwise acquire land to extend the common property and such land must be registered in the name of the body corporate in terms of this Act and the Deeds Registries Act.

(2) Land purchased or otherwise acquired by and registered in the name of a body corporate in terms of subsection (1) shall be deemed to be owned by the owners of the sections in the building concerned in the same proportion as their relevant participation quota as reflected on the relevant sectional plan.

(3) ……

(4) The provisions of section 7(2), (3) and (4) shall apply with the necessary changes to the preparation and submission to the Surveyor General of a draft plan of extension of the common property, and the approval of such plan by him or her.

(5) The registrar shall, upon the submission of the prescribed documents, register a plan of extension of the common property in terms of this section by making on endorsement on the relevant title deed to reflect that the land concerned has been incorporated in the sectional plan, shall make such further endorsements and entries in his or her records as may be necessary to give effect thereto, and shall furnish a copy of the sectional plan of extension to the local authority concerned and notify the Surveyor General of the registration of such plan of extension, and thereupon the Surveyor General shall amend the original sectional plan and deeds office copy of the sectional plan to reflect such extension.

(6) The registrar shall not register a plan of extension in terms of this section if the additional land to be incorporated as common property is subject to a mortgage band.

(7) Upon the registration of a plan of extension of the common property in terms of this section, such plan shall be deemed to be incorporated in the sectional plan registered in terms of section 12(1)(a), and the land to which such sectional plan of extension relates shall be deemed to be incorporated as common property in such registered sectional plan.”

As indicated in the said section 26(1), the body corporate may purchase or acquire land, subject to the provisions as provided for in this section, and thereafter the land must be incorporated into the sectional title plan, as provided for in subsection(s).

Firstly, the land must be registered in the name of the body corporate, it must be kept in mind that such property will be conventional land and prescribed Form “E” of the regulations to the Deeds Registries Act No.47 of 1937 must be followed for the deed of transfer. The description of the transferee, the body corporate, must follow the description as provided for in section 36(3) of the Act, i.e. “The Body Corporate of the ...,.. (name)...... Scheme, No. SS……..”‘. All documents usually lodged with a conventional deed of transfer must be lodged, together with the written consent of all the members of the body corporate. The sectional mortgage bonds or consents of the bondholders of sectional mortgage bonds registered over the units must not be lodged.

The deed of transfer is a conventional deed and therefore it must be endorsed with a “T” — code.

The next step will be to incorporate the land into the scheme. Section 26(5) must be read in conjunction with regulation 27 of the Act. The following documents must be lodged for purposes of incorporating the land in the sectional plan:

  • An application for the registration of sectional plan of extension of the common property. The body corporate must apply and it must be in prescribed Form “0”.

  • Two copies of the sectional plan of extension of the common property.

  • The land to be incorporated as common property must not be subject to a mortgage bond. If such a bond is registered it must be lodged for disposal.

  • If the land to be incorporated is subject to conditions different from the conditions registered at the opening of the scheme and which are included in the section 11(3)(b) schedule, then an amended schedule must be lodged. This amended schedule will substitute the schedule already filed in the sectional title file. The conditions in the section 11(3)(b) schedule must be qualified to indicate which portion of the common property is subject to which conditions. If there were endorsements on the existing schedule of conditions it must be brought forward as conditions mentioned in respect of the land on which the scheme was originally opened. If the conditions are the same an amended section 11 (3)(b) need not be lodged.

The title deed, i.e the deed of transfer in favour of the body corporate, will be endorsed to the effect that the land is now included in the sectional title register, with reference to the SS number of the initial sectional title register. The section 11(3)(b) schedule will also be endorsed to the effect that the common property of the scheme has been extended. If an amended schedule had been lodged, the original schedule must be endorsed to the effect that it has been substituted. It is advisable that the deed of transfer of the land be registered simultaneously with the application for the registration of the sectional plan, in one batch.

According to regulation 27(2) the Registrar will allot a distinctive number to the plans. It will therefore be provided with a new “SS” number. The new plans and relevant documents will therefore be filed in another sectional title file with another SS” number. If the section 11(3)(b) schedule is replaced the “new” schedule will be filed on the new file. The section 11(3)(b) which is replaced and flied in the initial sectional title file, will have to be endorsed that it has been replaced with a new section 11(3)(b) schedule with reference to where it is filed, that will be the new SS number allocated to the plans of extension. The amended schedule must also be endorsed to indicate that it substitutes the original schedule.

The provisions of section 4(5) of the Act must be adhered to when the land is added to the common property with the intention to extend the scheme. It is not necessary for the new land to be contiguous to the existing land. However if a right of extension is to be reserved in respect of the “new” land, and buildings to be divided into sections are to be erected on this land, then the “‘new” land must be contiguous and be notarially tied with the existing land. The notarial tie agreement must be registered by means of a bilateral notarial deed entered into by the body corporate and the Local Authority. It must be registered simultaneously with the deed of transfer of the land in favour of the body corporate, but prior to the application to incorporate the land into the sectional title scheme. The description of the conventional land will follow the description as set out in the deed of transfer. The description of the sectional title property will follow mutatis mutandis the description as per paragraph 3 in Form “H”, i.e. as follows:

“The land and buildings in the scheme known as (name of scheme) situated or (name of township/suburb/local authority/description of farm) ……………… as shown and more fully described on Sectional Plan no SS……”.

Once the land is incorporated in the sectional title register the right to extend the scheme will vest in the body corporate, in terms of section 25(6) whereby the body corporate may, subject to the provisions of the Act, obtain a certificate of real right of extension of the scheme. The body corporate may exercise the right to extend or cede the right to a developer.

All of the above may be lodged and linked as one batch, as follows:

No 1 — Deed of transfer of conventional land in favour of the body corporate;

No 2— Bilateral Notarial tie agreement;

No 3— Application in prescribed form “O” for Incorporation of the land in the sectional title register;

No 4—Certificate of real right to extend the scheme in terms of section 25(6): and

Rest of batch — Further dealings pertaining to the right to extend the scheme, as provided for in section 25(10), if required.

Marie Grovè
Law Lecturer, Deeds Training
Pretoria

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