Understanding the Sectional Title Act



If you live in a sectional title, semi-detached or an apartment complex where decisions usually go through a body corporate and call for unanimous votes, then you would like the recently enacted Sectional Title Act.

According to the Sales Manager at Bank Windhoek’s Property Division, Nancy McNab, the new Sectional Title Act brought sweeping changes to the industry and does away with limitations and shortcomings that restricted development, access to land and property. It also enables potential buyers to obtain finance from banks much easier.

Some material changes in the new Act affect transfer by endorsement, provision for free standing units, a right to phase development and right of exclusive use areas.

The Act also provides for the separate rating of units, the establishment of a regulation board and arbitration, and amended the definition of unanimous resolutions.

“The new Act provides for individual titles – this will also satisfy financial institutions in terms of security of title. The system of individual titles will also bring the registration of sectional titles in line with normal land registrations,” says McNab.

The previous Act stipulated that buildings had to be divided into two or more units tied at least with a common wall the size of a standard door.

“The new provision states that at least one of the buildings of a scheme must be divided into two or more sections. The new Act provides for loose standing units, which makes these types of properties more marketable.”
Though the old Act provided for the right to phase development, such right had to be reserved in the opening of the scheme.

“This was not viable, since it was nearly impossible to access finance. The new Act now provides for a Certificate of Registered Real Rights, which makes it possible for the extension of schemes upon adjacent land,” says McNab.
She says previously the right to exclusive use of areas was only possible by amendment and that it could become problematic if a unanimous decision could not be obtained.

“The Certificate of Real Rights can be mortgaged. There is now even the possibility of levying those areas.”
Another welcoming change in the Act is the separate rating of units. In the previous Act, land within the scheme was valued as a whole and the body corporate was deemed to be the landowner and became liable for payment of debts.
This resulted in unfair practices where innocent owners were required to pay debts of other owners.

“The new Act provides for the separate levying of proportionate rates against each unit,” says McNab
The establishment of a newly composed Regulation Board is also a positive development.

This board will advise the minister of rural and urban development on the making of regulations and rules and propose amendments to such regulations, including the amendment of legislation or any other matter relating to sectional titles.

In the previous Act no provision was made for any determination of disputes except by way of application to courts or instituting legal action.

The new Act provides for an arbitration procedure and the appointment of an arbitrator by the body corporate through unanimous resolution.

“This procedure now caters for the expedient solving of any dispute by members of the body corporate. This procedure will be far more cost effective and decisions and the finality thereof will be forthcoming in a much shorter period,” says McNab.

The amendment of unanimous resolutions is also welcoming since it provides that a decision be taken by 80 percent of body corporate members who are present in person and 80 percent of members reckoned in value.

“This makes the implementation of decisions more practical and effective. In practice one would usually find that one ‘stubborn’ owner would delay the process. This provision now prevents unnecessary and delayed objections and is to the benefit of the body corporate as a whole,” McNab said.


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