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RCR 39/2003

8 November 2007

RCR 39/2003
A real right to extend the scheme is reserved in terms of Section 25. The right, however, lapsed. Is it permissible for an owner of a unit in the scheme or the body corporate to apply in terms of Section 68(1) of Act 47 of 1937 to note the lapsing of the right to extend or must the developer apply?

RESOLUTION
The body corporate on behalf of the owners may apply in terms of the provisions of Section 68(1) of Act 47 of 1937 to note the lapsing of the right to extend.

RCR 1/1991
Must the building(s) to be erected be completed within the period reserved in terms of the Section 25 reservation or must the registration of the sectional plan of extension also be completed within this reserved period?

RESOLUTION
The intention is that only the building(s) must be erected and completed within the stipulated time.

PROBLEM
Even though the right may have lapsed by effluxion of time, RCR1/1991 provides that only the building(s) need to be completed within this period, the developer can bring his application for the registration of the extension of the scheme at any time, even years after the reserved period has lapsed. The developer will however have to prove that the building(s) were completed within the reserved period.

It may further appear from the perusal of the estimated PQ filed with the Section 25 reservation that the developer has exhausted his right by the registration of all the units reflected in such estimated PQ.

Section 25(13) of Act 95/1986 provides,"with due regard to changed circumstances the developer does not need to strictly follow the Section 25(2) plans" (my paraphrase); see also Knoetze v Saddlewood CC - 2001 I All SA 42 S.E. in this regard.

The developer may therefore still have further registrations pending under such Section 25 reservation and it will not be possible for anyone besides the developer to know whether the right has lapsed or not.

It is therefore imperative that RCR 39/2003 be withdrawn to the effect that only the developer may apply in terms of the provisions of Section 68(1) of Act 47 of 1937 to note the lapsing of the right to extend. The danger is that the body corporate could extinguish a title in terms of which the developer still has pending registrations.

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