I bought a unit with illegal alterations - what to do? (Carryn Durham, Specialist Sectional Titles Lawyer at Paddocks: 17 Jul 2015)

I have a situation I can find no precedent or article on and I think it is becoming quite common. I bought a unit in a sectional scheme a year ago. A month ago I was informed by the Body Corporate (BC) that an owner who owned the property 6 years (and several owners) ago, illegally extended the veranda and put a louvre roof on top (with their permission I might add). This extension was made on common property. The BC want me to now carry all the cost of legalising this alteration (i.e. adding it to the sectional plans etc.). I find this to be highly unreasonable and unfair especially since the BC has the fiduciary responsibility to "to ensure compliance with any law relating to the common property or to any improvement of land comprised in the common property" in terms of section 37(1)(n) in the Sectional Titles Act. I enquired why the BC did not fulfil their duty and ensure that the owner who made the alteration did it according to the law and section 24 of the act. Their response was that no-one cared at the time, but they care now.

Carryn Durham, specialist sectional titles lawyer at Paddocks, advises: If the veranda area, which is unregulated common property, was extended and enclosed by a louvre roof then the effect is that it is an "extension of the boundaries or floor area" of the existing section, and the process set out in section 24 of the Act should have been followed. It is a common problem in sectional title schemes that owners illegally extend their sections. Section 24 of the Sectional Titles Act 95 of 1986 (the “Act”) requires owners to follow a specific process when extending their sections. There are three elements to extending a section legally, which includes getting the required permissions, completing the process of building and registering the extension. These requirements include: • A special resolution of the body corporate is necessary to authorise the extension. • If there is a bond on the unit, the owner must get the bond holder to consent to the change, and if the extension will change that section’s participation quota by more than 10% all the bondholders in the scheme must be notified of the proposed extension and given the opportunity to withhold consent. • It is also worth noting that just about any kind of construction requires an approved building plan from the local municipality. • Once the building work has been completed, the owner must appoint a land surveyor or architect to prepare a draft sectional plan of extension including adjustments to the participation quotas of the section and submitted to the Surveyor General's office for approval. • Once approved the plan must be registered at the local Deeds Office. In theory no building works should take place until the required special resolution is taken, bondholders have consented and the building plans are approved by the local municipality. As one can see this is a difficult, time consuming and expensive process, which is probably the reason why so many sectional title owners simply don’t bother following the process or deliberately avoid doing it. It is also possible that the owner concerned and trustees in office do not realise that there are legal requirements for the extension process. Ideally the trustees should stop the illegal building operations and ensure that the legal procedures are followed before building can be commenced or completed. Quite often the owner gets the required approvals and completes the buildings but does not register the extension. Until the extension is registered the owner is not required to pay increased levies based on the increased participation quota. This is another reason why owners do not rush to register the extension. One way of avoiding this is to make the special resolution conditional on all these requirements being first met. In phased developments, the developer is allowed 90 days to register the sectional plan of extension after a new section is sufficiently complete for occupation. If this is not done the developer must pay a levy on the new section even if the plan is not registered. There is unfortunately no similar provision applying to owners who extend their sections. Ultimately it is up to the trustees to be vigilant and to make sure the owner registers the extension within a reasonable time. One way of addressing this issue is for the special resolution that approves the extension to be made conditional on the owner agreeing to pay increased levies from a fixed date, whether or not the sectional plan of extension is registered. The body corporate is obliged to enforce the provisions of the Act and rules. The fact is that the trustees should have ensured that the correct procedure was followed six years ago in terms of the requirements contained in section 24 and 37(1)(n). Furthermore, the trustees should not have issued a levy clearance certificate allowing this unit to be transferred until the extension was registered. Unfortunately the reality is that the trustees will only be liable if it can be shown that they were mala fide or grossly negligent in failing to follow the correct procedure. This is because the trustees are indemnified by the body corporate in terms of prescribed management rule 12. That being said, the situation still has to be regularised. A person inherits all the problems associated with the property that he or she buys. The fact remains that the owner is using the increased space, and the body corporate should be getting increased levies.

About the Author

Carryn Durham Carryn Durham [B.A LL.B LL.M (Stellenbosch)] is a Specialist Sectional Titles Lawyer at Paddocks, a sectional title and homeowners' association (HOA) specialist firm - www.paddocks.co.za. Carryn provides legal services to Paddocks consulting clients and is part of the support team at Paddocks Club, an online support service for the sectional title and HOA community.