Tuesday, July 08, 2008

If you own a unit in a sectional title scheme and you want more space, it is possible to extend the floor area or boundaries of your section provided you comply with the formalities set out in the Sectional Titles Act of 1986.
Installing a mezzanine floor would be regarded as an extension and you would have to comply with the formalities. Incorporating a balcony, verandah, roof terrace, garden or carport within the boundaries of a section would also require the formalities to be complied with.
As the proposed extension could affect other owners in the scheme, one has to arrange with the trustees of the scheme to call a special general meeting of owners to consider and approve the proposed extension by passing a special resolution at such a meeting. Thirty days notice is required for such a meeting.
The resolution would have to be passed by at least three quarters (3/4) of the owners present in person or by proxy at the meeting provided that half the owners were represented if the scheme had up to nine owners, 35% of the owners were represented if the scheme had ten to forty nine owners and 20% of the owners were represented if the scheme had 50 or more owners.
Instead of holding a formal meeting, it is possible to obtain a special resolution by having three quarters of the owners sign a “round robin” resolution.
After the special resolution has been passed you should have building plans prepared and passed by the local authority. Once the structural building work has been completed, you should instruct a land surveyor to prepare a plan of extension of the section.
When the plan of extension has been approved by the Surveyor General, you should instruct your conveyancer to register the extension at the Deeds Office. If the extension extends over a registered exclusive use area, the exclusive use area will have to be cancelled before the extension can be registered. If the extension extends over the common property of the scheme, a transfer duty clearance will have to be obtained from SA Revenue Service as the extension would be regarded as the acquisition of a larger share of the common property that had formerly belonged to all the owners in the scheme.
If the section is bonded, the bond and the bondholder’s consent would have to be lodged with the application to extend, so that the title deed of the section and any bonds registered over the section can be endorsed to record the increase in the floor area of the section.
As the floor area of a section governs the calculation of the participation quotas by which levies in the scheme are apportioned among the owners, the land surveyor preparing the plan of extension has to prepare an amended participation quota schedule which would be substituted for the existing participation quota schedule in the main file of the scheme at the deeds office when the plan of extension is registered.
If the extension results in a change of more than 10% to the participation quota of any section in the scheme, the conveyancer must obtain the consent of all the bondholders over every unit in the scheme to the extension. This can be an arduous task in a large scheme.
If a number of sections are extended at the same time, the plan of extension can cover all the sections being extended, but the 10% threshhold requiring the consents of all bondholders would be reached more easily.
One can thus extend the floor area or boundaries of a section in a sectional title scheme provided the necessary formalities are complied with and the sectional plan is amended accordingly to record such change.
It is advisable for the trustees of Sectional Title Schemes to insist that owners follow the correct procedures and formalities so that the sectional plans that are registered in the Deeds Office reflect the actual physical boundaries of the improvements on the ground.
Bobby Bertrand is a director in the Real Estate and Conveyancing Department at Bowman Gilfillan Cape Town.