perimeter around the enclave and to only have one access
point into the enclave to control the entry to the area. In
order to establish such an HOA all of the owners will be
required to consent to the formation of such an HOA and
in most instances the approval of the local Council will
be required. Once the HOA is formed the members will
contribute a monthly levy toward to HOA to cover the costs
of managing the security. This is only one example of such
a scenario.
“As a result, a property owner either automatically becomes
a member of an HOA which is created as a condition of
subdivision or the property owner must specifically consent
and agree to the establishment of an HOA subsequent to
the creation of a township/development. In both instances,
however, the property owner shall only cease to be a member
of the HOA when they cease to be the registered owner of
the property.”
What kinds of properties fall under sectional
title?
Dos Santos says technically any type of property can be
registered as a sectional title property (or better referred to
as a sectional title scheme), including a block of apartments
or flats, a townhouse complex, an industrial park, a block of
offices or a commercial retail building.
The qualifying factor which makes a development a
sectional title scheme is the approval and registration of a
sectional plan submitted to the Surveyor-General with the
intention of establishing such a scheme. A sectional plan
is a plan which shows the building or buildings and the
land comprised in the scheme, as divided into two or more
sections and common property respectively.
A sectional title scheme may relate to one or more
buildings either already constructed or in the process
of being constructed on the same piece of land, or on
more than one piece of land, whether connected or not -
provided that the building or buildings to be divided into
sections must be situated only on one piece of land or on
two or more such connected pieces of land which have been
notarially tied once the sectional plan has been approved. It
is therefore clear that a sectional title scheme will be need
to be established when a development is to be situated on
one piece of land or two or more notarially tied contiguous
pieces of l and.
Dos Santos emphasises that it’s also important to
understand what exactly constitutes a ‘section’ in the
context of a sectional title scheme. “A section is that part
of a sectional title scheme which an owner owns, whether it
is an apartment, townhouse, office, shop or factory. Many
people are confused by the difference between a section and
a unit. In simple terms a section consists of the ‘inner shell’
of a building, such as a flat or townhouse, while a unit on the
other hand is the collective reference to a section together
with its undivided share in the common property.
“Common property is regarded as the entire area of the
sectional title scheme that does not form part of any section
and is owned by all owners in the scheme in undivided
shares such as parking, roads, gardens, gates, corridors etc.
In general terms the ‘outer shell’ of a section is also regarded
as common property, including the roof and foundations of
the building.”
Dos Santos says while an HOA can apply to any type of
development, generally, however, they are established when
there is a certain amount of focus on the maintenance
of large tracts of land which will be included in the
boundaries of the HOA such as a golf course, parks,
sensitive environmental areas, bodies of water etc. “It
is not unusual to find an HOA which has one or more
sectional title schemes situated within its borders and in
fact we manage such an HOA comprising more than 800
erven and which has more than one sectional title scheme
situated within its fence line.
“It is important to understand that a development
can, for example, consist of 10 individual pieces of land
and one of those pieces of land can be zoned as a general
residential erf while the remaining nine pieces of land can
be zoned as singe residential erven. The erf zoned as a
general residential erf must be used for the establishment
of a sectional title scheme, while the erven zoned as single
residential may only be used for freestanding properties.
It is therefore crucial to understand the different zoning
types that exist as this will play an important role when
deciding on what type of property can be developed.
“Interestingly, there is no national legislation governing
HOAs and the function and concept of HOAs can differ
considerably depending on which province you find
yourself in. Sectional title schemes on the other hand, are
strictly regulated by the provisions of the Sectional Titles
Act 95 of 1986 and the newly introduced Sectional Titles
Schemes Management Act 8 of 2011. This fact is usually
taken into account when deciding between the two types
of developments as some people prefer the predictability of
sectional titles schemes while others enjoy the perceived
autonomy of HOAs.”
Why would a sectional title development
Body Corporate wish to form an HOA?
Explains Dos Santos: “Firstly, it is important to
understand that a sectional title scheme will always be
subject to the provisions of the Sectional Titles Act 95 of
1986 and the Sectional Titles Schemes Management Act
8 of 2011. Only the powers and functions of a sectional
title scheme can be assigned to an HOA, in which case the
governing document of the HOA (either a Constitution
or Memorandum of Incorporation) will replace the
Management and Conduct Rules as prescribed by the
Sectional Titles Schemes Management Act 8 of 2011.
It is important to note that the provisions of the HOA’s
governing document may not override or be in conflict
with the provisions of Sectional Titles Act 95 of 1986 and
the Sectional Titles Schemes Management Act 8 of 2011.
“The Body Corporate will therefore never fall away and
the HOA will exist over and above the Body Corporate.
A good example of such a development is an HOA which
we manage in the Southern Cape region and which is
registered as a sectional title scheme consisting of more
than 270 sections. The powers and functions of the
sectional title scheme have been assigned to the HOA.
The fact that the HOA in question is governed by the
provisions of a Memorandum of Incorporation this does
not imply that the provisions of the Sectional Titles Act
95 of 1986 and the Sectional Titles Schemes Management
Act 8 of 2011 are no longer applicable. These two Acts will
always apply, irrespective of the provisions of the MOI.”
THE ULTIMATE PROPERTY INVESTMENT RESIDENTIAL GUIDEBOOK
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