select
|

Sectional Title: Look out for any right to extend

When a new sectional title (ST) complex is launched, the developer can elect to build fewer units than may be allowed on the site, and reserve the right to develop the rest at a later stage.

This is known as a "Section 25 right to extend", and those buying homes in both new and established sectional title schemes should always check, before signing an agreement of sale, to see if such a right is noted says Berry Everitt, MD of the Chas Everitt International property group.

The Sectional Titles Act does set out very strict conditions under which a developer can exercise a Section 25 right. Among other requirements the developer must:

- Reserve the right to extend at the same time as making application to register the original sectional plan;
- Specify the timeframe within which the extra sections could be built;
- State exactly how many extra sections will be built;
- Show where and how they will be built;
- Show the size of those sections and the effect that they will have on the existing participation quotas; and
- Show the external appearance of the new sections.
- The Act also stipulates that after the original body corporate has been established, the developer cannot alter any of the above specifications without the consent of every single member of that body corporate.

To further protect buyers and owners, the Act also requires that for as long as the right to extend lasts, every new purchaser must be made aware, in writing, of that right, failing which the buyer is entitled at any time to cancel the sale.

The reason for this is that the effects of a developer deciding to exercise his right to extend could be very significant for existing owners in both personal and financial terms.

Imagine, for example, the building dust and mess that a well-settled community might have to endure if builders were to move back on site. Or the shock when you realise that a new building is about to obscure the lovely view that is one of your home's best features. Or the distress when you realise that a new floor of units is about to be added above your top-floor flat.

Meanwhile, it is worth noting that reserving the right to extend a scheme on an undeveloped portion of land does not confer ownership of that land on a developer. Rather, the land forms part of the common property and is owned in undivided shares by the members of the body corporate.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK