The Minister of Rural Development and Land Reform hereby publishes the Sectional Titles Amendment Bill, 2017 and the Explanatory Memorandum for public comment. Members of the public are invited to submit written comments within 30 calendar days of the publication of this notice to the following address: By post to: The Chief Registrar of Deeds: Rural Development and Land Reform Attention: Antoinette Reynolds Private Bag X918 PRETORIA 0001 By e-mail to: This gazette is also available free online at www.gpwonline.co.za 4 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 Government notices • GoewermentskennisGewinGs Rural Development and Land Reform, Department of/ Landelike Ontwikkeling en Grondhervorming, Departement van DEPARTMENT OF RURAL DEVELOPMENT AND LAND REFORM NO. 623 30 JUNE 2017 623 Sectional Titles Amendment Bill, 20 17: Explanatory Memorandum for public comment 40951 This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT,30 JUNIE 2017 No. 40951 5 (As introduced in the National Assembly as a section 75 Bill; Bill published in Government Gazette 40951 of 30 June 2017) (The English text is the official text of the Bill) ---------------------------------- --------------------------------- N amend the Sectional Titles Act, 1986, so as to amend certain definitions; to rovide for the developer to answer questions put to the developer by the gents of the lessees; to provide that a certificate issued by an architect or a land surveyor must also comply with section 26(2) of the Spatial Planning and Land Use Management Act, 2013; to further provide for the amendment of sectional plans in respect of exclusive use areas; to further provide for the amendment and cancellation of a sectional plan upon an order of the court; to provide for the noting of a title deed in respect of the lapsing of a reservation in terms of section 25; to provide for a lease of part of the common property with the consent of the holders of registered real rights; to amend the provisions relating to the alienation of common property; to further provide for the cancellation of a mortgaged section and mortgaged exclusive use area; to also provide for a developer to submit a plan for subdivision or consolidation to the Surveyor -General for approval to subdivide, consolidate and to extend a section; to extend the registration of subdivision of a section, the consolidation of sections, and the extension of sections to a developer; to provide for the filing of replacement documentation in respect of lost or This gazette is also available free online at www.gpwonline.co.za 6 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 1. Section 1 of the Sectional Titles Act, 1986 (hereinafter referred to as "the principal Act"), is hereby amended - (a) by the substitution for the definition of "exclusive use area" of the following definition: "'exclusive use area' means a part or parts of the common property for the exclusive use by the owner or owners of one or more sections or by the occupant or occupants thereof recognised by law, as contemplated in this Act;"; and (6) by the substitution for the definition of "Sectional Titles Schemes Management Act" of the following definition: "'Sectional Titles Schemes Management Act' means the Sectional Titles Schemes Management Act, [2010] 2011; ". Amendment of section 1 of Act 95 of 1986, as amended by section 1 of Act 63 of 1991, sections 1 and 11 of Act 7 of 1992, section 1 of Act 15 of 1993, section 1 of Act 44 of 1997, Proclamation No. R. 9 of 1997, section 1 of Act 29 of 2003, section 1 of Act 7 of 2005, section 1 of Act 6 of 2006, section 1 of Act 11 of 2010, section 20 of Act 8 of 2011 and section 1 of Act 33 of 2013 W This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT,30 JUNIE 2017 No. 40951 7 2. Section 4 of the principal Act is hereby amended by the substitution in subsection (3) for paragraph (b) of the following paragraph: "(b) a meeting contemplated in paragraph (a)(i) has been held and the developer has been available thereat to provide the particulars contemplated in the said paragraph, and has answered all reasonable questions put to the developer by the lessees or their respective agents present: Provided that a developer need not comply with this subsection if all such lessees have stated in writing that they are aware of their rights which shall also be set out in such statement and that they do not wish to purchase the proposed units which they occupy and a conveyancer has certified in writing that such statements have been received in respect of all the units in question: Provided further that a share block company applying for the approval of a development scheme need not comply with the requirements of this subsection if that share block company has, within a period of two years before such application, already complied with section 11A of the Share Blocks Control Act, 1980 (Act No. 59 of 1980). ". This gazette is also available free online at www.gpwonline.co.za 8 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 3. Section 7 of the principal Act is hereby amended by the substitution in subsection (2) for paragraph (a) of the following paragraph: "(a) a certificate issued by an architect or a land surveyor stating that the proposed division into sections and common property is- ID not contrary to any operative town planning scheme, statutory plan or conditions subject to which a development was approved in terms of any law, that may affect the development; and (ii) complies with section 26(2) of the Spatial Planning and Land Use Management Act, 2013 (Act No. 16 of 2013); ". 4. Section 14 of the principal Act is hereby amended- by the substitution for subsection (3) of the following subsection: "(3) If in the opinion of the Surveyor -General any person could be prejudiced by an incorrect sectional plan, he or she shall advise the registrar as to which sections or exclusive use areas are affected by any such defect in question, and thereafter no transfer of such section and its undivided share in the common property or the registration of a real right therein, or the cession of an exclusive use D -ti 3 o m o o 3-n N CD G o rt -I pi* W O' 2 ' N A CD O 5.1. 11 s. n ' .... y 4: a a , a to 0 co N co N crt co -4, ,.9: -% O w 3 OD c? co - O k CT 01 3 m - 3 s a °. CD N pr a K s o m D I = Q. á N 3 tn co _rt o O -.% m a W n O? W CA This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 9 6 area shall be registered until the defect in the sectional plan has been rectified, unless the registrar is satisfied that the delay in causing the defective sectional plan to be rectified will cause undue hardship and the person in whose favour transfer of the section and its undivided share in the common property or of a real right therein, or cession of an exclusive use area is to be registered, consents in writing to the transfer or other registration being effected prior to the rectification of the defect. "; by the substitution for subsection (5) of the following subsection: "(5) The Surveyor -General shall advise the registrar and the local authority of any alteration, amendment or substitution of a sectional plan in terms of subsection (1) which affects the description or extent of any section or exclusive use area, and thereupon the registrar shall make the necessary endorsements reflecting any change of description or extent upon the deeds registry copy of the sectional title deed and upon any other registered document affected by such change, and shall likewise endorse the owner's or holder's copy of that sectional title deed or any such other registered document whenever subsequently lodged at the deeds registry for any purpose. "; and by the addition in subsection (8) of the following paragraph, the existing subsection becoming paragraph (a): "(b) The provisions of section 49(3) to 49(5) apply, with the necessary changes, in instances where a body corporate is in existence upon cancellation of the sectional plan by an order of the Court. ". This gazette is also available free online at www.gpwonline.co.za 10 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 5. Section 15B of the principal Act is hereby amended by the deletion in subsection (1) of the word "and" at the end of paragraph (c), the insertion of the word "and" at the end of paragraph (d) and the addition of the following paragraph: "(e) where a right in respect of a reservation in terms of section 25 has lapsed, the registrar must note such lapsing on the title deed of the right so reserved, if available, on application by the developer or by the body corporate in instances where the developer is no longer in existence: Provided that where the title deed of the right is not available, a certificate by a conveyancer must be submitted to the effect that the title deed to such right is not available, whereupon the registrar must endorse the deeds registry duplicate thereof, and, if the original title deed is at any time lodged with the registrar. he or she must make a similar endorsement thereon. ". -.. w 3 !A! co r á. N CID cO CD 3 O co .... y .+ N Ó we. .4, .C.4 Ö N N 3 ñ _ CD O r. 7 O V ñ O O r -h .1z. A a ñ ° 4' , w w ...1 o , CD ° V .,s. N to Ó co ñ .51' So = 01 y 7 N ó `0 3 ó, ui Q. ó ñ C. ,N rc .- o co -I% A N 2, O o Ó W ci Ñ .a .A-r + ö A 3 w A > W a 3 °, CD . ...). 7 a a °, ca 3 n, -I m o = ..a y r P m -. O CD O ñ C.. _% C. O IV -Oi. " O a (J1 O Cl W '41 '-i. > . O A a P. o . + o -1, 4,0 -ti co cn m Ó ... 2. -I, N .a -% (D ID CO _CO O. ó {A Ñ fD N w ., O 3 -" ó. cD St. o' a a °i . rt G y CD W O O ~ ` Ñ O Ó.n-w -i O a W = , Q1 a o c This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 11 8 by the substitution in subsection (4) for paragraph (b) of the following paragraph: "(b) Where pursuant to subsection (1) it is sought to let land which forms part of the common property or a portion thereof on which a section or part of a section is erected, the registrar shall not register the lease, unless it is made subject to any right which the owner of the section or part of the section may have, as well as the rights of holders of real rights in terms of sections 25 and 27. "; by the substitution for subsection (4B) of the following subsection: "(4B) (a) Where in terms of subsection (1) it is sought to alienate a portion of land on which an exclusive use area or part thereof is registered, the registrar shall not register the transfer, unless the registration of the exclusive use area [or part thereof] has been cancelled with the written consent of the holder. (b) The registrar shall notify the Surveyor - General and the local authority when the registration of an exclusive use area [or part thereof] has been cancelled in terms of paragraph (a), and on receipt of such a notice the Surveyor -General shall make the necessary amendments on the original sectional plan and on the deeds registry copy of the sectional plan."; and by the substitution for subsection (4C) of the following subsection: "(4C) [The provisions of subsection (4B) shall apply with the necessary changes where,] Where in terms of subsection (1), it is sought to alienate a portion of land on which a real right of extension in terms of section [25] 25(1) or any part of such right is This gazette is also available free online at www.gpwonline.co.za 12 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 18. The provisions of sections 56 and 57 of the Deeds Registries Act shall apply with the necessary changes to the transfer of any mortgaged unit or undivided share in a unit, the cession of any mortgaged lease of a unit or undivided share in a unit, the cession of any mortgaged real right in or over a unit or an undivided share in a unit, the cession of any mortgaged real right under sections 25 and 27 of this Act or an undivided share therein, [and] the transfer under section 17 of this Act of any mortgaged common property or land or an undivided share therein and the cancellation under section 17 of any mortgaged section and exclusive use area, and real right under section 25. ". a CD This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 13 9. Section 22 of the principal Act is hereby amended by the insertion after subsection (1) of the following subsection: "(1A) The provisions of subsection (1) apply with the necessary changes where a developer, prior to the establishment of a body corporate, wishes to register a sectional plan of sub -division of a section."; insertion in subsection (2) of the following paragraph after paragraph 8. Section 21 of the principal Act is hereby amended by the insertion after subsection (1) of the following subsection: "f1A) The provisions of subsection (1) apply with the necessary changes where a developer, prior to the establishment of a body corporate, intends to subdivide his or her section or to consolidate two or more sections registered in his or her name. ". y O This gazette is also available free online at www.gpwonline.co.za 14 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 11 conveyancer must be submitted to the effect that the lease or other deed is not available, whereupon the registrar must endorse the deeds registry duplicate thereof, and, if the original lease or other deed is at any time lodged with the registrar, he or she must make a similar endorsement thereon;'; by the substitution in subsection (2) for paragraph (d) of the following paragraph: "(d) certificates of registered sectional title in the prescribed form for each of the new sections and their undivided shares in the common property created by the subdivision, made out in favour of the owner [or, in the case of a partition, in favour of the persons entitled thereto in terms of the partition agreement];' ; by the deletion in subsection (2) of paragraph (e); and by the insertion after subsection (2) the following subsection: "(24) (a) Where an application as contemplated in subsection (1) is made by a developer, such application must also be accompanied by a certificate from a conveyancer certifying that at the date of the application, no unit in the scheme has been sold, donated or exchanged, or if a unit was so alienated but not vet registered in the name of the acquirer, the developer had disclosed in writing to the acquirer thereof that application has been made for the registration of the sectional Ian of subdivision of the relevant section. This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 15 10. Section 23 of the principal Act is hereby amended by the insertion after subsection (1) of the following subsection: "(1A) The provisions of subsection (1) apply with the necessary changes where a developer, prior to the establishment of a body corporate, wishes to register a sectional plan of consolidation of two or more sections. "; by the insertion in subsection (2) of the following paragraph after paragraph (C): "(cA) any lease or other deed embodying any other real right registered against the section at the time of consolidation, if available: Provided that where the lease or other deed embodying the real is not available, a certificate by a conveyancer must be submitted to the effect that the lease or other deed is not available, whereupon the registrar must endorse the deeds registry duplicate thereof, and, if the original lease or other deed is at any time lodged with the registrar, he or she must make a similar endorsement thereon : "; and by the insertion after subsection (2) the following subsection: Ó = O -a N This gazette is also available free online at www.gpwonline.co.za 16 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 13 "12A) (a) Where an application as contemplated in subsection (1) is made by a developer, such application must also be accompanied by a certificate from a conveyancer certifying that at the date of the application, no unit in the scheme has been sold, donated or exchanged, or if a unit was so alienated but not vet registered in the name of the acquirer, the developer had disclosed in writing to the acquirer thereof that application has been made for the registration of the sectional plan of consolidation of the relevant sections. (b) A deed of alienation in which the consolidation has not been disclosed, shall be voidable at the option of the acquirer. ". 11. Section 24 of the principal Act is hereby amended by the insertion after subsection (3) of the following subsection: "(3A) The provisions of subsection (3) apply with the necessary changes where a developer, prior to the establishment of a body corporate, intends to extend the boundaries or floor area of his or her section."; by the deletion in subsection (6) of the word "and" at the end of paragraph (d) and the insertion of the following paragraph after paragraph (d): This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 17 14 "(dA) any lease or other deed embodying any other real right registered against the section at the time of extension, if available: Provided that where the lease or other deed embodying the real is not available, a certificate by a conveyancer must be submitted to the effect that the lease or other deed is not available. whereupon the registrar must endorse the deeds registry duplicate thereof, and, if the original lease or other deed is at any time lodged with the registrar, he or she must make a similar endorsement thereon: and "; by the insertion of the following paragraphs after paragraph (e): (eA) (a) Where an application as contemplated in subsection (6) is made by a developer, such application must also be accompanied by a certificate from a conveyancer certifying that at the date of the application, no unit in the scheme has been sold. donated or exchanged. or if a unit was so alienated but not yet registered in the name of the acquirer, the developer had disclosed in writing to the acquirer thereof that application has been made for the registration of the sectional plan of extension of the relevant section. (b) A deed of alienation in which the extension has not been disclosed, shall be voidable at the option of the acquirer; and ". This gazette is also available free online at www.gpwonline.co.za 18 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 12. Section 25 of the principal Act is hereby amended by the insertion after subsection (2) of the following subsection: "(2A) A registrar of deeds must, if any of the documentation referred to in subsection (2) (a), (b). (c), (d) or (q) have been lost or destroyed, on written application by the body corporate or if a body corporate has not been established, on written application by the developer, and in the prescribed form and manner, file such replacement documentation in the relevant sectional title register."; by the substitution in subsection (5A) for paragraph (a) of the following paragraph: "(a) If the right reserved in terms of subsection (1) is exercised, the developer or his or her successor in title shall immediately after completion of the relevant unit or exclusive use area apply for the registration of the relevant plan of extension and the inclusion of such unit or exclusive use area in the relevant sectional title register."; by the substitution for subsection (6) of the following subsection: "(6) If no reservation was made by a developer in terms of subsection (1), or if such a reservation was made and for any reason has lapsed, the right to extend a scheme including land This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 19 16 contemplated in section 26, shall vest in the body corporate which shall be entitled, subject to this section section í5(1)(b) of the Sectional Titles Schemes Management Act and after compliance, with the necessary changes, with the requirements of paragraphs (a), (b), (c), (d) and (g) of subsection (2), to obtain a certificate of real right in the prescribed form in respect thereof :. Provided that the body corporate shall only exercise or alienate or transfer such right with the written consent of all the members of the body corporate [as well as with the written consent of the mortgagee of each unit in the scheme]. the mortgagees of the units and real rights over the units, and the holders of registered real rights over the units in the scheme: Provided further that a member [or]Lmortgagee or a holder of a real right shall not withhold such approval without good cause in law."; by the substitution in subsection (10) for paragraph (c) of the following paragraph: "(c) the certificate of real right by which the reservation in terms of subsection (1) or (6) is held [, together with any mortgage bond registered against the certificate of real right and the consent of the mortgagee to the substitution of the sections depicted on the sectional plan of extension and their undivided shares in the common property, as security in lieu of the real right held under the certificate of real right mortgaged under the bond]; ; by the substitution in subsection (10)(dÁ) for the words preceding subparagraph (i) of the following words: This gazette is also available free online at www.gpwonline.co.za 20 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 17 "any mortgage bond [which may be affected by] registered against the certificate of real right, together with the consent of the mortgagee to the registration of the extension of the scheme and the endorsement of such bond to the effect that it is attached to-"; and by the substitution in subsection (10)(dA) for subparagraphs (i) and (ii) of the following subparagraphs respectively: "(i) each section [shown on the sectional plan] and its undivided share in the common property as well as all exclusive use areas, shown on the sectional plan; (ii) the certificate or certificates of real right [in respect of a right of exclusive use] as contemplated by subsection (10)(d) and section 27(1); and ". 13. Section 26 of the principal Act is hereby amended by the addition of the following subsections: "(8) The provisions of subsection (1) and subsections (4) to (7) apply with the necessary changes to instances where land, to extend the common property, is purchased or acquired by the developer. (9) (a) Where a developer purchases or otherwise acquires land to extend the common property there must be lodged with the registrar a certificate from a conveyancer certifying that at the date of N a co ..< This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 21 14. Section 27 of the principal Act is hereby amended by the insertion after subsection (5) of the following subsection: "(5A) The provisions of subsection (5) apply with the necessary changes to the cancellation of a right to exclusive use of part of the common property registered in favour of a developer: Provided that such right may be cancelled by the developer prior to the establishment of a body corporate, with the written consent of the mortgagee of the exclusive use area, by means of the registration of a unilateral notarial deed of cancellation. ". 18 purchase or acquisition of such land no unit in the scheme has been sold, donated or exchanged, or if a unit was so alienated but not yet registered in the name of the acquirer, the developer had disclosed in writing to the acquirer thereof that application has been made for the registration of a plan of extension of the common property. (b) A deed of alienation in which the extension has not been disclosed, shall be voidable at the option of the acquirer. ". GI a C.4 3 O co -es = s o. cCO n 3 O = Cl) ... ñ 1 ,Lit Cm O ñ N r 0 7 - Oh N > V O O i-s -Is t o O ' H I 40 j fil co fo ól .74 -% DI (1) ID ii W O N 7 d W 3 OM1 cl, ái m * a N Q. to ..c °1 u, Pi O o o ó w ' = Cl) -% CD y .Ow O O ñ . A. rl This gazette is also available free online at www.gpwonline.co.za 22 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 15. Section 32 of the principal Act is hereby amended- by the substitution for subsection (1) of the following subsection: "(1) Subject to the provisions of section [48] 17 of the Sectional Titles Schemes Management Act, in the case of a scheme for residential purposes only as defined in any applicable operative town planning scheme, statutory plan or conditions subject to which a development was approved in terms of any law the participation quota of a section shall be a percentage expressed to four decimal places, and arrived at by dividing the floor area, correct to the nearest square metre, of the section by the area, correct to the nearest square metre, of all the sections in the building or buildings comprised in the scheme."; and by the substitution in subsection (2) of the words preceding paragraph (a) of the following words: "(2) Subject to the provisions of section [48] 17 of the Sectional Titles Schemes Management Act, in the case of a scheme other than a scheme referred to in subsection (1), the participation quota of a section shall be a percentage expressed to four decimal places, as determined by the developer: Provided that-". CO This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 23 16. Section 54 of the principal Act is hereby amended (a) by the substitution in subsection (2)(c) for the words preceding subparagraph (i) of the following words: "(c) [seven] nine members appointed by the Minister, who shall consist of the following persons - "; (b) by the substitution in subsection (2)(c) for subparagraph (i) of the following subparagraph: "(i) [a conveyancer] two conveyancers nominated by the Executive Council of the Law Society of the Republic of South Africa ; "; (c) by the deletion in subsection (2)(c) of the word "and" at the end of subparagraph (v), the insertion of the word "and" at the end of subparagraph (vi), and the addition of the following subparagraph: "(vii) an officer occupyina an office mentioned in section 2(1)(b) of the Deeds Registries Act, alternatively, an officer contemplated in section 2(1)(c) of the said Act. "; (d) by the substitution for subsection (5) of the following subsection: "(5) When any nomination in terms of subsection (2)(c)(i), (ii), (iii), [or] (iv), or (v) becomes necessary, the body concerned shall at the request of the Director -General of Rural Development and Land Reform furnish the nomination required for appointment to the regulation board, within a period of 60 days from the IV Q This gazette is also available free online at www.gpwonline.co.za 24 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 21 date of such request, failing which the Minister may appoint, subject to the provisions of that subsection, any suitable person as a member in place of the person he or she would have appointed if the said body had not so failed to nominate a person. "; by the insertion after subsection (9) of the following subsection: "(9A) The provisions of subsections (6), (7). (8) and (9) are, with the necessary changes. applicable to the appointment of an alternate member."; by the insertion after subsection (11) of the following subsection: "(11A)The board may make recommendations to the Minister concerning matters specified in section 55 also without holding a meeting, provided any recommendation so made have been agreed to by all the members of the board. "; and by the addition of the following subsection: "(14) Regulations made by the Minister shall be published in the Gazette at least one month before the date specified in the relevant notice as the date of commencement thereof. ". This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 25 17. Section 60 of the principal Act is hereby amended by the substitution for subsection (3) of the following subsection: "(3) (21 Where an owner has, prior to the commencement of this Act, acquired in terms of an agreement or been granted in terms of rules made under the Sectional Titles Act, 1971, the right to the exclusive use of a part or parts of common property, the body corporate concerned shall, if so requested after the commencement date by the owner, transfer] cede such right to the owner by the registration of a notarial deed entered into by the parties, in which the body corporate shall represent the owners of all relevant sections as transferor. (b) The notarial deed of the cession of the right to exclusive use as referred to in paragraph (a). must be accompanied by a sectional plan on which is delineated, in the manner prescribed in terms of section 5(3)(f), a part or parts of the common property for the exclusive use by the owner or owners of one or more sections: Provided that no such delineation shall be made on the sectional plan in terms of this subsection if such delineation will encroach upon a prior delineation on the sectional plan of a part of the common property for the exclusive use by one or more of the owners. ". 11 w 3 ñ o N s . ...16 CO " to 3 , 1 m N el" N (D °, o 3 13.1 ñ O. 4t fl N 2. 3 ñ O) O O ims. ' _v -ft NI °, 0 °, _, co co co °, e+ . _. N CO CO N ,ri 03 Ç) O 3 Ñ " " N 61 co 3 ós co D- O a ltb. IT D I< o (II -el cD it a. co ö :4 3 H N 0 C11 - O h o ñ 1 .. .P. This gazette is also available free online at www.gpwonline.co.za 26 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 27 060417nim MEMORANDUM ON THE OBJECTS OF THE SECTIONAL TITLES AMENDMENT BILL, 2017 1. OBJECTS OF BILL The Sectional Titles Amendment Bill, 2017 (hereinafter referred to as the Bill), seeks to amend the Sectional Titles Act, 1986 (Act No. 95 of 1986) (hereinafter referred to as "the Act "), in order to, amongst others - (a) amend certain definitions; (b) provide for the developer to answer questions put to the developer by the agents of the lessees; (c) provide that a certificate issued by an architect or a land surveyor must also comply with section 26(2) of the Spatial Planning and Land Use Management Act, 2013 (Act No. 16 of 2013) ( "Spatial Planning and Land Use Management Act "); (d) further provide for the amendment of sectional plans in respect of exclusive use areas; (e) further provide for the amendment and cancellation of a sectional plan upon an order of the court; (f) provide for the noting of a title deed in respect of the lapsing of a reservation in terms of section 25; (g) provide for a lease of part of the common property with the consent of the holders of registered real rights; (h) amend the provisions relating to the alienation of common property; (i) further provide for the cancellation of a mortgaged section and mortgaged exclusive use area; This gazette is also available free online at www.gpwonline.co.za 28 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 2 (j) also provide for a developer to submit a plan for subdivision or consolidation to the Surveyor -General for approval to subdivide, consolidate and to extend a section; (k) extend the registration of subdivision of a section, the consolidation of sections, and the extension of sections to a developer; (I) provide for the filing of replacement documentation in respect of lost or destroyed documentation; (m) amend the provisions relating to the extension of a scheme; (n) amend the provisions relating to participation quotas of sections; (o) regulate the membership of the sectional titles regulations board; (p) amend the transitional provision; and (q) provide for matters connected therewith. 2.1.1. Clause 1 of the Bill seeks to amend section 1 of the Act, which provides for the definitions used in the Act. The current wording of the definition of "exclusive use areas" makes reference to the exclusive use by only the `owner or owners of one or more sections ". The definition can therefore be interpreted as to exclude any person other than the owner from using the exclusive use area, such as a lessee, usufructuary or even the owner's spouse or other member of the owner's household. The proposed amendment in clause 1(a) of the Bill aims to rectify the position. This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 29 2.3 Clause 3 Clause 3 of the Bill seeks to amend section 7 of the Act, which deals with the approval of the draft sectional plans by Surveyors -General and provides, amongst other things, for the submission of a certificate by an architect or land surveyor stating that the proposed division into sections and common property is not contrary to any operative town planning scheme. However, the interpretation of section 7(2)(a) is ambiguous and difficult to interpret, and the certificate is usually submitted without the architect or land surveyor giving any thought or consideration to its implications. The amendment proposed in clause 3 of the Bill seeks to address the situation by providing that an architect or a land surveyor must comply with the provisions of section 26(2) of the Spatial Planning and Land Use Management Act. 2.2 Clause 2 Clause 2 of the Bill seeks to amend section 4 of the Act, which deals with the approval of development schemes and provides for the developer to have a meeting with every lessee of a building in instances where part of such building is to be wholly or partially let for residential purposes. Section 4(3)(b) provides for the developer to answer all reasonable questions of lessees that are present at such meeting. However, a need has been identified to also provide for a lessee's representative to act on behalf of such a lessee in instances where a lessee is absent from a meeting. Clause 2 of the Bill provides for this insertion. w This gazette is also available free online at www.gpwonline.co.za 30 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 2.5 Clause 5 Clause 5 of the Bill seeks to amend section 15B of the Act, which provides for the registration of the transfer of ownership in a sectional title scheme. However, this section is silent on the noting of the lapsing of a right reserved in terms of section 25(1) of the Act. The insertion of subsection 1(e), as proposed in clause 5 of the Bill, provides for the noting of the relevant title deed upon application by the developer, or by the body corporate in instances where the developer is no longer in existence. m æ z O. 2 Q. k ] æ 7 O. ED x C. CD k CO (D § é M 3 W CD k * - a) ó 0 m _ B' Æ C 13) a) <. Ti S. u) % -a n § FT; o. m CD u) -6' o % m o < q FilR o o. k_ m o g Æ p # W S. q '.< Fi D a- n ro CL c :4, < M. N O (A (D O 7 =I 7 Ñ. g _L f! ^ 7. (D ) co C) X Q O N. 7 á ñ ó D CD * 0 N O < a á m ó < m 7m m C) CD cn C Q. ó Ei o . ill 07 m A"' v CD `G o ? N 7 CD 07 E. O O (D (A 7 - 1, E. o O O - - 7 D) Ñ 7. 7 ca o to O 11) Ñ -0 .-. O 7 W CS O -1 ` -h O W fl) This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 31 5 2.6.1. Clause 6 of the Bill seeks to amend section 17 of the Act, which deals with the alienation and letting of the common property in a scheme. In terms of section 17(4)(b), the registrar shall not register a lease over land which forms part of the common property, unless such lease is made subject to all the rights of the owner of the section. Section 17 does not provide for the lease to be subjected to the rights of holders of real rights in terms of sections 25 and 27. The amendment of section 17(4)(b), as proposed in clause 6(a) of the Bill, seeks to rectify the situation. 2.6.2. Section 17(4B) provides for the alienation of a portion of the common property on which an exclusive use area or part thereof is registered. However, registration of the transfer of the common property can only be affected after cancellation of the exclusive use area, or the part thereof, that is situated on the common property that is to be transferred. The Act does not provide for dealings with a part of an exclusive use area and section 17 must therefore be amended to state the correct position. The amendment of section 17(4B)(a) and (b), as contained in clause 6(b) of the Bill, aims to rectify the position. s CO O J1) C v i-- d ID U) CD o 0. -" N N íÜ (0) (D CO Ó . '=;" N cp' Cn m ß) > N n .-.. 0. ...: Cr "0 O "0 .-. ñ' 3 co CD o (D (D * Q CO sO m (0 Vs- ; m. Cn > 0 o . -», - m -- CD ó ca cñ D Q) O cn " O. Z o c ED ó . This gazette is also available free online at www.gpwonline.co.za 32 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 2.8. Clause 8 Section 21 of the Act deals with the approval of the sectional plans of subdivision and consolidation. However, section 21 does not provide for a developer, prior to the establishment of the body corporate, to cause a land surveyor or architect to submit a draft sectional plan of subdivision or consolidation, as the case may be, to the Surveyor -General for such approval. Clause 8 of the Bill seeks to insert section 21(1A) in the Act, to provide for a developer, prior to the establishment of the body corporate, to cause a land surveyor or architect to submit a draft sectional plan of subdivision or consolidation, as the case may be, to the Surveyor -General for approval. 6 mortgaged common property, and the cession of a mortgaged lease of a unit and mortgaged real right over a unit. The said section, however, is silent in respect of the cancellation, under section 17, of a mortgaged section, exclusive use area, and real rights of extension. Clause 7 of the Bill provides for the necessary inclusion. This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 33 7 However, section 22(2) that provides for the lodgement of the relevant title deeds for purposes of endorsement, omits reference to the lease. Clause 9(b) of the Bill, seeks insertion section 22(2)(cÁ) in the Act in order to provide for the inclusion of a lease. 2. 9.3. Clauses 9(c) and (d) of the Bill, seeks to amend section 22(2)(d) and delete section 22(2)(e) of the Act. Section 22(2)(d) of the Act provides for the issuing of certificates of registered sectional titles in favour of the persons entitled thereto in terms of a partition agreement. However, the correct position upon subdivision is for the certificates of registered sectional title to be issued in the names of the joint owners of the original unit. Partition transfers may then be registered subsequent to the issuing of the certificate of registered sectional titles. T3 Cl ó ° < co o. O m Q. Ó .-« O = a (D o C) O. Ñ CO c CD 3 N m CD -a o ó á CD o \V s .,. FT; CD ( CO. G - N - .m. (D . (U CD m a g CD (D ID a N m ó ' - , a '0 N CD O. Ñ N W O Ñ CD o M CL ,, O Fil CO (D 3 ñ m r^ a ó a 2.10.1 Clause 10 of the Bill seeks to amend section 23 of the Act, which deals with the registration of a consolidation of sections in a scheme. The proposed amendment seeks to provide for a developer, prior to the establishment of the body corporate, to apply for the registration of a sectional plan of consolidation of two or more sections. This gazette is also available free online at www.gpwonline.co.za 34 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 2.11.1 Clause 11 of the Bill seeks to amend section 24 of the Act, which deals with the registration of an extension of a section in a scheme. Section 24 does not provide for a developer, prior to the establishment of the body corporate, to cause a land surveyor or architect to submit a draft sectional plan of extension of a section, to the Surveyor -General for such approval. The insertion of sections 24(3A) and 24(6)(dB), as contained in clauses 11(a) and (b) of the Bill, seeks to provide for a developer to apply for the registration of such a sectional plan of extension of a section. 2.11.2 Clause 11 of the Bill seeks to amend section 24(7) of the Act, which provides for the endorsement of deeds that have been registered against the title deed of the section in order to reflect such extension. Section 24(6) provides for the lodgement of the relevant title deeds for purposes of endorsement, omits the reference to a lease. The proposed clause 11(b) of the Bill, seeks to provide for the reference to a lease. This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 35 2.12.2 Section 25 provides for the extension of a scheme by the addition of sections and exclusive use areas. However, section 25(5A)(a) only makes reference to the inclusion of a unit in the relevant sectional title register. The amendment of section 25(5A)(a) as proposed in clause 12(b) of the Bill, seeks to address this. 2.12.3 Section 25(6) provides for a body corporate to apply for the extension of a scheme in instances where no reservation was made by a developer in terms of section 25(1), or if such a reservation was made, and had lapsed. Such a right may be exercised by the body corporate with the written consent of all the members of the body corporate and bondholders of all units in the scheme. Section 25(6) does not provide for holders of registered real rights and bondholders of real rights to also consent in this regard. The amendment of section 25(6), as proposed in clause 12(c), seeks to provide for this inclusion. 2.12.4 There is a duplication in so far both section 25(10)(c) and section 25(10)(dA) provides for the lodgement and endorsement of mortgage bonds registered against co This gazette is also available free online at www.gpwonline.co.za 36 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 2.15 Clause 15 Clause 15 of the Bill seeks to amend section 32 of the Act, which deals with the participation quotas of sections. Sections 32(1) and (2) contain provisions pertaining to the determination of participation quotas and make such provisions subject to section 48 of the Act. Section 48 of the Act has been repealed by the Sectional Titles Schemes Management Act, 2011. The amendment of sections 32(1) and 32(2) in clause 15(a) and (b) rectifies the position. 2.13 Clause 13 Clause 13 of the Bill seeks to amend section 26 of the Act, which deals with the extension of schemes by the addition of land to the common property. Section 26 does not provide for a developer, prior to the establishment of the body corporate, to apply for the registration of a plan of extension of the common property. The insertion of sections 26(8) and 26(9), as proposed in clause 13 of the Bill, seek to provide for this. 2.14 Clause 14 Clause 14 of the Bill seeks to amend section 27(5) of the Act, in order to make it possible for the owners to cancel their rights to the exclusive use of parts of the common property. The Act is silent in respect of the cancellation of rights to exclusive use by developers. The insertion of subsection (5A), as proposed in clause 14 of the Bill, seeks to provide for this. -1. 0 This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 37 2.16.1 Clause 16 of the Bill seeks to amend section 54 of the Act. The Executive Council of the Law Society of the Republic of South Africa ('LSSSA') nominates one conveyancer for appointment by the Minister as member of the Sectional Titles Regulations Board. However, the LSSA is represented by two conveyancers on the Deeds Registries Regulations Board, established in terms of section 9 of the Deeds Registries Act. The amendment of section 54(2)(c)(i), in clause 16(b) of the Bill is necessary and is in line with the provisions of section 9 of the Deeds Registries Act. The amendment in clause 16(a) is consequential to the amendments proposed in clauses 16(b) and (c). 2.16.2 There is a need for a representative of the board to have practical knowledge on matters pertaining to the registration of sectional title units and the opening of sectional title registers. The insertion of section 54(2)(c)(vii) as proposed in clause 16(c) of the Bill seeks to address this matter by providing for the appointment of a registrar of deeds, deputy registrar of deeds, or assistant registrar of deeds with the necessary practical knowledge, as the ninth member of the board. The amendment is also in line with the provisions of section 9 of the Deeds Registries Act. This gazette is also available free online at www.gpwonline.co.za 38 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 2.17 Clause 17 Clause 17 of the Bill seeks to amend section 60 of the Act which deals with savings and transitional provisions in respect of transactions registered in terms of the Sectional Titles Act, 1971 (Act No. 66 of 1971). Section 60 (3) provides for an owner who has acquired a right to the exclusive use of parts of the common property, to request the body corporate to transfer such right to the owner by means of a notarial deed. However, those rights were not delineated on the 1971 sectional plans; it was created in the rules. The body corporate cannot cede the rights without causing it to be delineated on the plans. The amendment of section 60(3), as proposed in clause cn 3 n) Q {n O. o n * ° 3 ; N CD D (1) CTI .7 pi Ñ CD Ó :-: 3 3 o N Ç 7C' .. co O. ai 5 co co 0 +... a a) cr ó o -I 3 rn 3 ^ (7, o St 3 m m o ó, 3 ' 0- en /J' çD, ^ m o 7 41 o ... - ro m ó úi C- 72 CO ID ó Z o < cn á o - r. o CD ó " CD 73 Om o co C .5... fl: O O Ñ C O Q) Q ZD 7 1:3 O C O. Q C") M. co o o D. 7 5- co This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 39 This gazette is also available free online at www.gpwonline.co.za 40 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017 7.2 The test for tagging is not concerned with determining the sphere of government that has competence to legislate on a matter, nor the process concerned with preventing interference in the legislative competence of another sphere of government. In Tongane y Minister of Agriculture and Land Affairs 2010 (6) SA 214 (CC), the Constitutional Court ruled on the test to be used when tagging a Bill. V -.L This gazette is also available free online at www.gpwonline.co.za STAATSKOERANT, 30 JUNIE 2017 No. 40951 41 7.6 The State Law Advisers and the Department of Rural Development and Land Reform are of the opinion that it is not necessary to refer this Bill to the National House of Traditional Leaders in terms of section 18(1)(a) of the Traditional Leadership and Governance Framework Act, 2003 (Act No. 41 of 2003), since it does not contain provisions pertaining to customary law or customs of traditional communities. N -o C -1 rr o a) á. 7 c = -, ID CD 3 CCR CD á1 O O- N C a FD` 7' M V Q. CD cr a I.< ai s 2 ET a. 3 ° 7 = v O Cil ÿ O - .' . ' 7 Ñ N Q. 0 5 O 7 cn u) 3 C (D = O. O c 7 (D ca. Ñ !]. S Gt1 CD Ó VJ . 7. ' _ fD CL O (7 m O Cfl 7 D N O .. ñ 5 N 7 U1 This gazette is also available free online at www.gpwonline.co.za 42 No. 40951 GOVERNMENT GAZETTE, 30 JUNE 2017

Sectional Titles Amendment Draft Bill, 2017

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