Owners of units in a sectional scheme often want to incorporate a balcony or a garage into their section, or enclose a garden area for their own use. Technically, this has the effect of increasing the floor area, as described in the owner’s title deed and on the sectional plans that are registered in the Cape Town deeds office. Therefore, although it is definitely possible to extend the floor area of a section in this way, the Sectional Titles Act 95 of 1986 (“the STA”) prescribes certain procedures that must be adhered to in order to validly incorporate such areas (called “exclusive use areas”) into your section.
Understanding the concepts ‘common property’ and ‘exclusive use area’
‘Common property’, in a sectional title scheme, is that part of the land in the scheme that is owned by all the owners jointly, in undivided shares. Examples of common property include passages and pathways between the different sections, staircases and lifts, swimming pools, entrance roads and the like. If a person owns a section, then he or she automatically also owns an undivided share in the common property of that scheme.
Exclusive use areas, on the other hand, are a part or parts of the common property that is reserved for the exclusive use by the owner of a section. Although exclusive use areas are reserved for use by specific owners, such areas (strictly) still form part of the common property and is therefore owned by the body corporate (which is made up of all the owners), not the owner of the specific section. Examples of exclusive use areas include gardens, parking bays, storerooms, balconies and patios.
What is the prescribed procedure?
Section 24 of the STA sets out the procedure to extend a section.
- First, the owner of the section must obtain the approval of the body corporate through a special resolution of the members. A special resolution requires the consent of at least 75% of the members. A notice calling the meeting for a special resolution must be sent to all members 30 days prior to the meeting. Alternatively, the decision can also be taken by way of a round-robin resolution. Should the owner fail to obtain a special resolution in his favour, he or she can consider applying to the Community Schemes Ombud Service for a resolution of the issue.
- Once the necessary consent has been obtained, a land surveyor or architect must be appointed to prepare and submit a draft sectional plan of extension to the Surveyor-General. Application must also be made to the relevant local authority in Cape Town for approval of the proposed extension. The land surveyor or architect must attach to the submission of the draft sectional plan, a certificate of approval by the local authority.
- If the extension relates to the floor area (as opposed to extending the area of an exclusive use area), an amended schedule of the affected participation quotas (PQ) must also be obtained and submitted. (‘Participation quota’, in essence, is a calculation showing the percentage floor ownership held by an owner, relative to the floor space of all the sections in the scheme.)
- The owner will then appoint his or her conveyancer to apply to the Registrar of Deeds for the registration of the amended sectional plan and for the endorsement on the existing title deed to reflect the extension of the section. A transfer duty receipt must be obtained from SARS to reflect the increase in the value of the property and this must be lodged together with the application.
The 10% rule
Should any of the sections in the sectional title scheme be subject to a mortgage bond, and the amendment of the sectional title plan does not cause a deviation of more than 10% in the PQ of the section to be extended, the land surveyor or architect must issue a certificate confirming this. On the other hand, if the deviation in the PQ of the section is 10% or more, the bondholders (usually banks) must be notified thereof. This means that each bank that holds a mortgage bond over any section in the scheme, must receive notification of this amendment to the PQ and the proposed extension. Thereafter, a conveyancer’s certificate, verifying that the consent of all the bondholders have been obtained, must be lodged with the application in the deeds office.
Should you have any questions or queries with regards to this topic, feel free to contact us at email@example.com or on 021 673 4700.