SA Affordable Housing September - October 2019 // ISSUE: 78 | Page 37

LEGAL MATTERS “…shown on a general plan, the owner of land subdivided shall furnish a copy of the general plan to the Registrar, who shall, subject to compliance with requirements of the Section and any other law, register the plan and open a register in which all registrable transactions affecting the respective lots or erven shown on the plan shall be registered.” The substratum for registrable transactions affecting the respective erven shown on the plan is the general plan, and comes into being once the general plan is registered in the deeds registry. The purpose of the provisions of section 46 is thus to ensure the recognition of the existence of each and every individual erf depicted on the general plan and adherence to that plan in regard to all registrable transactions. The Articles of Association of the HOA provided that the HOA’s members were the developer and all other persons who are registered owners of residential property in the township. It was therefore clear that the developer was a member of the HOA as well as the registered owner of the erven reflected on the general plan that have not been transferred to third parties. Accordingly, the conclusion that the developer fell within the group that can be described as ‘members of the HOA who are owners of erven and units in the township’, was inescapable, and it was therefore liable for levies in the same way as are all other owners of erven. The ‘remaining extent’ (which is those erven not yet transferred to third parties) is not a ‘stand’ (also referred to as an erf), nor is it a unit, and the levies are not apportioned to it but to its components, being the erven. Note that the court indicated that the present matter can be distinguished from previous judgments (in Florida Hills and Rhynfeld) where the court concluded that when township property is sold as individual erven, the remainder of the property is reduced from time to time by the sale of individual erven, but that the unit of the remainder retains its own identity and continues to appear as the remainder in the deeds registry. It accordingly concluded that it was that remainder which had to be entered in the municipal valuation roll as a unit in the ownership of the township SPONSORED BY STBB owner. These judgments had to do with the relationship between a local authority and a township developer and with the valuation of unsold lots in a township. The legal nature of the relationship between the parties in those matters was one that flowed ex lege, and the dispute centered around the method used to value such erven. The context of the present dispute was certainly distinguishable. CONCLUSION This judgment is part of a growing string of matters in which developers approach a court for clarification on the basis for which they are held liable for homeowners’ association levies in respect of unsold erven in a new township. Their liability is first and foremost determined by the association’s governing documentation read in the context of the local authority approval conditions. As soon as the liability is linked to ownership of a property or erf in the township, it will include the developer who becomes owner of the unsold erven in the township register on registration, unless there are specific provisions to the contrary. Developers can and often do, by way of special conditions in the association's constitution, exempt themselves from paying levies in respect of unsold properties still owned by the developer. The rationale is that the developer is usually liable for the expenses of providing services, roads and infrastructure during the development period, and should not be burdened with levies in respect of its unsold erven in that period. Clearly much care must therefore be applied, and specialist opinion obtained by the developer in the planning of the development, the interaction with the local authority and the drafting of all the governing documentation of the relevant HOA. STBB offers a variety of legal services where our expertise and friendly approach allows us to deal with every legal matter in an effective and efficient manner ensuring a pleasant experience for our clients. In the property sector we cover: • Property law We offer benchmark services for both retail and development property transactions. We are reputed for our teams of seasoned property law practitioners who share an extensive set of skills to smoothly address every aspect of property law and land development transactions. • Local Government, Planning, Development and Environmental law Our Development Law Unit has nine specialists addressing development requirements in the fields of planning law, environmental law, construction law, renewable energy law and local government law. The Unit partners with land developers to function as a vital watchdog and one-stop-shop for all legal requirements of land development projects, including low cost housing projects. For more information related to the information published, please contact Gert Minnaar at [email protected] or visit our website https://www.stbb.co.za to view contact information for your nearest branch. www.saaffordablehousing.co.za SEPTEMBER-OCTOBER 2019 35