When is a body corporate of a sectional title scheme established?
Section 2 of the Sectional Titles Management Act (the Act) provides that with effect from the date on which any person other than the developer becomes an owner of a unit in a scheme, there shall be deemed to be established a body corporate of that scheme. Prima facia, the provisions of section 2 are clear and unambiguous, however, in practice a fair amount of uncertainty prevails about the date of establishment of the body corporate, and the members thereof.
DATE OF ESTABLISHMENT
Where a sectional title register is opened, and sections are simultaneously transferred with the opening of the register, the body corporate is only deemed to be established on registration of the batch of deeds as a whole, i.e. on the registration of the last deed in the batch. The proviso to section 13 of the Deeds Registries Act 47 of 1937 provides that deeds, which are one of batch of interdependent deeds, shall only be deemed to be registered when all the deeds in such batch have been signed by the registrar, i.e. the signing of the last deed in such batch.
It is thus clear that when a sectional title register is opened, and sections simultaneously transferred, the body corporate is only established after registration of all the deeds in the batch. It is for this reason that the conveyancer cannot provide a certificate, in terms of section 15B(3)(a)(i) (aa) of the Act, with the transfer of any of the sections in such batch. The certificate for the transfer of all units in the batch will be to the effect that no body corporate is deemed to be established, and that no monies are payable (see section 15B(3)(a)(i) (bb)).
It also often occurs in practice that a sectional title scheme is opened on a piece of land, and in view of the situation of the land on which the scheme is to be opened, the scheme is land locked, i.e. surrounded by other land usually also owned by the developer. It is then practice that on approval of the scheme by the local authority, one of the conditions will be that a right of way must be registered over the other land belonging to the developer. In view of the maxim nulli res sua servit the servitude cannot be created simultaneously with the opening of the scheme, as the body corporate is only deemed to be established once the register is opened, irrespective of the simultaneous transfers. One also cannot provide for a stipulatio alteri as there would be nobody to accept the servitude, even where such condition is created in the section 11(3)(b) ‑ schedule of conditions. The servitude can only be created once the register has been opened and the body corporate is established. The only way of achieving this is by registering a notarial agreement in terms of section 29 of the Sectional Titles Act, between the developer, as owner of the adjoining land, and the body corporate of the sectional title scheme. It cannot be registered simultaneously with the opening of the scheme and the transfer of the first section, given the provisions of section 13 of the Deeds Registries Act, alluded to above. The only concern is that, pending the registration of the servitude, the body corporate will have no right of way over the adjoining land, and might find itself land locked. However, the developer is also a member of the body corporate, provided not all the sections are transferred, and will very seldom prohibit access to members of the body corporate.
MEMBERS OF THE BODY CORPORATE
Section 2 of the Act provides that the body corporate shall consist of the developer and every person who becomes an owner of a unit in a scheme. The developer ceases to be a member of the body corporate once the ownership in every section is held by any person or persons other than the developer, and the developer no longer has a real right of extension, as provided for in section 25 of the STA
In terms of the definition of developer, in section 1 of the STA, the holder of a right of extension, as provided for in section 25 of the Act, or his successor in title is also deemed to be a developer. This could have the result that a body corporate might never, or take a very long time to, be established in the event of the initial developer creating two insignificant sections, approximately two square metres in size, and subdividing the remainder of the common property into various real rights of extension, which are in turn ceded to “co‑developers” of the scheme. Given the same scenario as discussed supra relating to a land locked scheme the creation of the right of way as discussed will not be an option, and the scheme will remain land locked until a body corporate is eventually established some day.
CREATION OF BODY CORPORATE IN THE EVENT OF PARTITION
In terms of RCR 31 of 1987 it was held that where joint developers enter into a partition agreement whereby each become sole owners of sections, a body corporate does come into existence. This was confirmed by RCR 2 of 2011 whereby it was held that the resolution taken in 1987 is not ultra vires section 2 of the Act as the parties to the partition agreement become “owners” and are no longer “developers”.