Prospective buyers of sectional title units should not only inspect the property for defects, but ensure they are buying the correct property.
Before entering into an agreement of sale, sectional plans should be requested from the developer or seller to confirm the location and description of the property. Although uncommon, there is a real risk of owning a neighbouring property and, even worse, paying its electricity and water bilIs. The sheriff of the court may foreclose a unit for a debt owed by a neighbour.
Because property developers handle large volumes of units and their transfer to end purchasers, errors can occur. For example, a sectional title unit may be incorrectly numbered on the sectional plan and not correspond with the title deed. The sectional plan and title deed information must correspond. However, when sectional titles are registered, the numbers may mistakenly be swapped. Such an error is seldom noticed until a valuation of the unit is conducted to finance its re-purchase.
The consequence is that affected owners do not have proper title to their unit and cannot sell or mortgage it. The financial institution is also impacted by unknowingly mortgaging an incorrect unit which means its security over the unit is prejudiced. In turn, the municipality is likely to charge rates to the incorrect unit; similarly the body corporate may charge incorrect levies.
One needs to investigate whether the incorrect numbering was an isolated issue or extended to other units and if so, to what extent. A land surveyor and conveyancer would need to visit the scheme to determine that the numbering of the units corresponds with those on the title deeds, not the locality plan.
This issue of who is liable to bear the costs of correcting such an error is contentious. Section 14(2) of the Sectional Titles Act states that the body corporate may recover its costs incurred as a result of an alteration, amendment or substitution of the sectional plans from the developer, land surveyor or architect.
The body corporate and owners can pursue a damages claim against the party that created the error. In a number of instances, the developer may have been deregistered or liquidated due to its activities being completed on transfer of the last unit, and a land surveyor may no longer be practising. The body corporate will have no option but to bear the costs which it will pass onto the unit owners on a pro rata basis in the form of monthly levies.
Where the plans are found to be incorrect, the body corporate must initiate a high court application to cancel or amend the sectional plan in terms of Section 22 of the Land Survey Act and section 14 of the Sectional Titles Act. A finite group of affected parties needs to be cited in the application. A land surveyor must be instructed to re-survey the land and scheme and prepare the draft sectional plans and report to attach to the court application.
The body corporate and its attorneys will prepare the notice application setting out the facts and the relief sought. The affected unit owners must all sign confirmatory affidavits confirming their agreement with the application which is then served on all interested parties, including the municipality and financial institutions.
The high court will consider and grant a final order allowing the land surveyor time to register the amended sectional plans with the Surveyor General’s office. The court order is served on the Surveyor General to register the amended sectional plans and the Registrar of Deeds to update their records.
If successful, the Registrar of Deeds will endorse the original deeds as and when they are presented and will record a new caveat against the affected properties to record the cancellation, substitution or amendment of the sectional plans.
The unit owner will now have proper title to their unit and be able to sell or mortgage it.