SPECIAL EDITION: LAND & CUSTOMARY LAW

 

Lessons for Nigeria from the Experience of South Africa in Managing the Challenges of Transfer of Title and Administration of Fragmented Property Schemes

 

 

K Omidire

North-West University, South Africa. Email: kbomidire@yahoo.com

 

 

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ABSTRACT

A "fragmented property" or "multiple unit" property is one in which several persons have ownership or title interest in sections or parts of a single property scheme. The title interest could be in a block of flats/apartments or maisonettes in a building, and a building in a group of buildings, or townhouse(s), and fully detached houses in a complex or estate. Without clear rules regulating the nature and scope of title, the use of individual units in the scheme, and the conduct and interpersonal relations of the parties involved, incessant litigation or self-help remediation is likely to be common.
In Nigeria the first fragmented property scheme was established by the government in 1959 to provide accommodation for senior public servants. Several others have followed, and the establishment of housing estates is no longer restricted to the government. However, the intractable problem with schemes in Nigeria is that there is a lack of a specific legal framework to address the provision of an unimpeachable title to buyers, and for the administration of schemes for the benefit of all parties. There is therefore a need to address the problems associated with the transfer of title and the administration of fragmented property schemes. Doing so is the objective of this article.
To achieve that objective, the legal framework applicable to fragmented property schemes in South Africa is critically considered with a view to learn from the experience of the country's robust legislation developed by caselaw, in addition to academic opinions over a period exceeding half a century. Recommendations to deal with the challenges in Nigeria regarding the issues of transfer of title and management of fragmented property schemes are proposed.

Keywords: Fragmented property scheme; sectional title; transfer of title; management; South Africa; Nigeria.

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1 Introduction

The issue of "fragmented property" or "multiple unit" property arises where several persons have ownership or title interest in sections or parts of a single property scheme.¹ The title interest could be in a block of flats/apartments or maisonettes in a building, a building in a group of buildings, or townhouse(s), and fully-detached houses in a complex or estate.² A scheme could be in the form of a "share block scheme" where the owners have a beneficial interest in the shares of a share block company in whom the ownership of the property is vested, coupled with the grant of possession to a specific unit in the property.³ The shares cannot be mortgaged, although the transfer of the occupational right can be effected by a registration of the transfer of shares. Another type is the "sectional title" scheme, whereby multiple persons (natural or corporate) have the interest of ownership of individual units comprising a section and a share of the common area in the scheme. The interest of each unit holder is registered in his name at a deeds' registry.⁴

Fragmented property schemes provide an opportunity for groups to enjoy a share of lifestyle amenities in a complex or estate which would have been difficult or impossible for an individual to provide in his single personal abode. However, the potential for conflict of interests in schemes is high given that it is a relationship of several parties comprising the developer, the body corporate, homeowners, trustees, managing agents, non-owner occupiers, and service providers. Without clear rules regulating the nature and scope of title and the use of individual units in the scheme, as well as the conduct and inter-personal relations of the parties involved, a scenario akin to the case of too many cooks spoiling the broth would not be farfetched.

Regulated fragmented property schemes have been in existence for nearly a century.⁵ The post-second world war period in Europe and the United States of America witnessed an increasing desire of people to own their homes, which desire was hindered by the prohibitive costs of land, labour and building materials, which eventually necessitated a "substantial modification of the exclusive and individualistic features of conventional ownership".⁶

In South Africa the sectional title scheme is a creation of the law. The underlying objective of statutory enactment is to facilitate sectional titles to build a "national democratic society", making home ownership available to more people and alleviate "the plight of the homeless and historically disadvantaged".⁷ In that regard, appropriate legislation has been enacted constituting a legal framework to address different challenges, particularly issues of the individual title of owners, interpersonal relationships, and the management of the scheme to protect the interest of all parties. The critical provisions of the applicable statutes which are considered in part 4 of this article have been interpreted and developed over the years by the courts.

In Nigeria the first fragmented property scheme was established by the Western region government in 1959 to provide accommodation for senior public servants.⁸ Several others have followed, but the establishment of housing estates is no longer restricted to the government. Private initiatives include the development of finished housing units as well as the development of site and services schemes. In such developments, the developer undertakes a structured layout of a large lot to plots of different sizes, and makes available infrastructural facilities including an estate road network, drainage, street lighting, water boreholes, water, and a sewage treatment plant. The housing units or plots are subsequently sold to buyers.

The intractable problem with fragmented property schemes in Nigeria is that there is the lack of a specific legal framework to address the provision of an unimpeachable title to buyers into schemes, and the administration of schemes for the benefit of all parties. Parties tend to resort to applying the legal framework for contracts, corporate management and leasehold to deal with peculiar problems which arise in relation to the transfer of title and scheme administration, which regrettably creates other problems.⁹ For instance, when properties are sold to buyers, the parties apply a mishmash of legal documentation to find an acceptable way to transfer title.¹⁰ In relation to the administration of the scheme, owners and residents in schemes constitute themselves into associations, formally or informally agreeing the rules to be applied in dealing with issues affecting the scheme and their interpersonal relationships. Regrettably, in many cases disputes arise on different aspects, which may result in approaching the courts, or for the parties resorting to self-help in resolving the problems.¹¹

There is a need to address the problems associated with the transfer of title and the administration of fragmented property schemes in Nigeria.¹² That is the focus of this article, which in part 2 discusses fragmented property schemes in Nigeria by examining the challenges of the transfer of title to unit holders. The problems associated with the administration of schemes and the management of the interpersonal relationship of the unit holders are also discussed. Part 3 critically examines the legal framework relating to sectional title in South Africa. This is done with a view to learning from the country's experience to proffer suggestions for law reform in Nigeria. The legal framework on the subject in South Africa is chosen for consideration because the country has had a robust legislative framework developed by caselaw, in addition to academic opinions thereon, over a period exceeding half a century. In part 4, recommendations to deal with the challenges in Nigeria regarding the issues of the transfer of title and the management of fragmented property schemes are proposed, and part 5 is an evaluation of the issues discussed, to arrive at a conclusion.

 

2 Fragmented property schemes and their challenges in Nigeria

Fragmented property schemes in Nigeria initially started as government initiatives.¹³ Both the Gowon Housing Estate¹⁴ and FESTAC Town were developed as housing units initially to accommodate foreign participants who visited Nigeria for the 2^nd World Festival of Arts and Culture (FESTAC) held in the country in 1977.¹⁵ The increasing population of Nigeria over the years has exacerbated the problem of the shortage of accommodation for the people. The housing deficit in Nigeria was estimated at about 18 million units in 2019, requiring the construction of an estimated 700,000 units per annum to cover the gap.¹⁶ It is therefore no surprise that the private sector continues to take advantage of the opportunity to participate in the provision of housing units for Nigeria's teeming population.¹⁷ However, private developers' interest appears to be focussed on the upper end of the residential schemes. Furthermore, the development of high-rise buildings offering luxury apartments for the affluent and the expatriates' community in the low-density areas of the country like Ikoyi and Ikeja in Lagos State has become a common occurrence.

Although there is continued interest in the development of fragmented property residential schemes in the urban centres of Nigeria, government appears to pay little or no attention to the fact that existing laws cannot effectively address the emergent problems peculiar to the needs of those involved. For instance, the nature of the title which unit holders could have in the schemes appears unsettled and may depend to a large extent on the ingenuity of the advising attorneys to come up with an innovative arrangement. The implication of this is that there is no certainty as to the title which unit holders may obtain in transactions, as this would differ depending on the developer or the buyer, and their respective attorneys.

Furthermore, in addition to the problem regarding the transfer of title, there is also a problem with how the scheme in which ownership is fragmented should be managed in the best interest of all occupiers, whether they are resident-purchasers or tenants of purchasers. The succeeding sections of this part will address the two critical questions.

2.1 The nature of and the transfer of title in fragmented property schemes in Nigeria

An understanding of the law regarding the title to property and the transfer thereof in Nigeria is necessary for an appreciation of the challenges faced by parties engaged in property transactions in schemes. In 1978 the Federal Government of Nigeria enacted the Land Use Act¹⁸ (hereafter the LUA) whose purpose is to vest all land in the state.¹⁹ With effect from the date of the enactment, "all land comprised in the territory of each state in the Federation is hereby vested in the Governor of that state, and such land shall be held in trust and administered for the use and common benefit of all Nigerians in accordance with the provisions of [the] Act."²⁰ Consequently, the statutes which hitherto existed in relation to "the registration of title to, or interest in land, or the transfer of title to, or any interest in land" remained applicable only to the extent that they could be modified to conform to the LUA.²¹ By necessary implication, the tenure of land recognised under the common law by which land could be held freehold, in fee simple was abolished. The interest which could now be held over land in Nigeria is a statutory right of occupancy for a term of years.²² The statutory right is granted by the state Governor in respect of land located in urban areas,²³ and by a local government in respect of land located in non-urban areas.²⁴

During the term of a statutory right of occupancy the holder has the sole right and absolute possession to the land and to all the improvements on the land. The holder also has the right to deal with the land in whatever way he chooses subject to the provisions of the LUA. The holder may transfer, assign or mortgage any improvements on the land.²⁵ However, the right to alienate²⁶ is subject to the consent of the Governor "first had and obtained".²⁷

In relation to stand-alone units within schemes, it is possible to survey each property, execute a deed of partition, and prepare respective deeds of assignment in favour of each buyer of the individual units, wherein the developer assigns the entirety of his rights in the specific unit to the unit holder.²⁸ Each of the unit holders is then required to obtain the Governor's consent to the assignment. The consent entitles him to the rights of a holder of a statutory right of occupancy for the remainder of the tenure of the certificate of occupancy assigned to him. Regrettably, while the provisions relating to the Governor's consent in relation to the transfer of property may not foment problems in relation to the transfer of a single stand-alone property, the experience is that the transfer of other type of units within multi-unit schemes is not that straight-forward.

In schemes comprising flat, apartment or maisonette units, and townhouses which share floors and/or walls in a common building, it is not possible to delimit the land area for each unit. Hence, a survey of the land delimiting specific units is not possible. If the land for each unit cannot be delimited, it is not possible to assign each unit subject to the consent of the Governor individually and specifically. To deal with this challenge, developers and buyers sometimes use subleases to attempt to pass title.²⁹

The approach of using a deed of sublease to pass title is not without problems under the LUA. The practice is for the developer to grant a deed of sub-lease on the unit to be sold for the remainder of the term on the certificate of occupancy less a few days. A clause is included in the deed of sublease that the sub-lessee (the buyer of a unit in a scheme) shall be entitled to apply with the sublessor (the developer) alongside other sublessors in the scheme on a common plot of land for a renewal of the title. Each sublessee will be required to bear the proportionate cost in relation to the interest in the property. There are problems with this arrangement.

A deed of sublease grants less right than the buyer of a unit would have envisaged, which is to obtain the totality of the rights of the developer in the certificate of occupancy covering the unit. Unfortunately, the buyer gets less tenor than the term of the certificate of occupancy. There is a reversion of the property to the developer at the expiration of the term of the sublease. While it may be argued that the sublessee gets a right to apply for a renewal of the head title (the certificate of occupancy) alongside other buyers in the scheme, it is only the developer as the lessee in the certificate of occupancy who could apply to the Governor for a renewal. The chance of that happening may be remote. The developer may be a company. Having sold all the units in the scheme the company has no further dealing with the buyers. Indeed, there is no guarantee that the company would still be in existence when the term of the certificate of occupancy is due for renewal. The same is probably true if the developer is a natural person. He sells units and moves on to his next project. There is hardly any guarantee that he would be alive when the term of the certificate of occupancy expires.³⁰

Meanwhile there are other issues which the idea of granting a sublease to the buyer of units in a scheme does not appear to have contemplated. For instance, section 26 of the LUA provides that "any transaction or any instrument which purports to confer on or vest in any person any interest or right over land other than in accordance with the provisions of this Act shall be null and void." The sublease created over the unit being purportedly transferred by the developer to the buyer of the unit has the character of a lease. According to the Supreme Court in Nlewedim v Uduma,³¹ a lease must have the following characteristics, namely, parties to the leasehold, a subject property, a term of years, an agreed rent, a commencement date, terms as to covenants, and a mode for determination. The question raised therefore is whether a deed of sublease that does not comply with the requirements of a valid lease can purportedly transfer title to a property in a fragmented property scheme. It should be noted that the sublease granted by the developer does not contain any covenant on the part of the sublessee (the buyer of a unit) to pay rent. Indeed, in his mind, the sub-lessee is buying the unit, but his interest in that property is not the same as that of a holder of a right of occupancy, who has a greater interest than the holder of a lease.³²

Different states in Nigeria have legislation regulating the administration of land, including the registration of titles. In Lagos state, for instance, the applicable law is the Lagos State Lands Registration Law.³³ Section 34 of the Lagos state law permits persons who hold land in common having received an order for the sale of an undivided share to apply to partition such land. The registrar is then authorised to partition the land, open new registers, and file the application together with the agreement or the order in the land registry. It is submitted, however, that this process may not be useful to persons holding units in fragmented property schemes comprising flats or apartments, mezzanine units and townhouses, as partitioning in the sense envisaged in section 34 is not possible. The buyers are entitled to units, not land. Furthermore, their interest is in the form of sub-lessees or some other form, but not as tenants in common in respect of a delimited land.

Meanwhile the challenges associated with the transfer of title in relation to fragmented property schemes are coupled with other non-technical challenges which may create additional problems. A critical consideration is that land administration in general in Nigeria is characterised by an uncoordinated regulations and legislation, non-transparent land titling registration system, the existence of multiple land management authorities, and the lack of a complaint and grievance resolution process.³⁴ With a total land area of over 900,000 km²,³⁵ only a paltry proportion thereof constituting 3% is registered.³⁶ The result is a dearth of documentary evidence of title which is required to be searched by persons intending to engage in property transactions. Moreover, in many states the land registration processes remain manual, there being inadequate technical and human resources to process them otherwise. The procedure for the registration of land in Lagos state, the economic capital of Nigeria, involves a matrix of at least 21 processes, the conclusion of which could span a period of over 270 days.³⁷The cost to do a registration of the transfer of land is rather high. In many states, land administration is considered a major source of revenue. Although the LUA is considered a tool for regulation, it is also considered a basis to charge fees and expenses in land administration to boost internally generated revenue for the state.³⁸ The all-in registration of an assignment of a right of occupancy can range between 3%and 5% of the fair market value of a subject property.³⁹ It is therefore not a surprise that many persons holding interest in land go without registering their interest in states' land registries as a result of the exorbitant cost involved.⁴⁰

From the foregoing, it is evident that a reform of the law is required at least in relation to providing a proper title with a status equal to that granted by the underlying certificate of occupancy covering the land on which the scheme is built. That is also necessary to guarantee an effective transfer of title in favour of a buyer into a scheme. Appropriate recommendations will be made in part 4 after a consideration of the experience of South Africa in dealing with similar problems. Meanwhile, apart from the issue of the nature and transfer of title, there is no specific statute or regulation addressing the question of how schemes and the interpersonal relationships of unit holders are to be managed. That problem is considered in the succeeding paragraphs.

2.2 The management of fragmented property schemes in Nigeria and the interpersonal relationship of the unitholders

Considering that the development of fragmented property schemes continues to increase, a new form of interpersonal relationship is emerging. The unitholders are not tenants; neither are they counterparties in a purely commercial relationship. They hold individual units in a scheme. That holding imposes a responsibility on them to maintain the services like internal roads and streetlights, to clean their environment, and to maintain equipment like electricity generators, and water and sewage treatment plants where applicable. Some sort of regulation is necessary as to the use of individual units so as not to cause inconvenience to co-unit holders in the scheme. The lack of specific legislation or public regulation has, however, resulted in the fact that different schemes try to devise different workable solutions to address their peculiar problems.

The structure adopted by a scheme to address the challenge of its management would depend to a large extent on the origin of the scheme. Estates set up by the government and those created by individual owners of properties in neighbourhoods tend to establish a form of Community Development Associations (CDAs). Schemes established by private developers tend to set up Homeowners and Residents Associations. In either case, the parties adopt rules and regulations to manage the estate and to regulate the conduct of residents. The sophistication of the rules may depend on the extent of the wealth, education and knowledge of the parties. Indeed, some of the high-end estates have their associations registered under Part F of the Companies and Allied Matters Act, 2020⁴¹ as incorporated associations. Association constitutions then provide for rules addressing inter alia aims and objectives, the appointment, powers, duties, tenure, and removal of trustees and the procedure for the disbursement of funds, accounts, and audit of the association.

However, the adaptation of a corporate law model of incorporated associations to the management of fragmented property schemes is not fit for purpose. Despite the sophistication of the association, disagreements are still common, and these agreements have a negative impact on the quality of the lifestyle that buyers had envisaged before becoming part of the property schemes. A major cause of disagreement often relates to a lack of cooperation on the part of unit holders or their tenants regarding compliance with the agreed rules relating to the use of units. Other problems relate to the conduct of occupiers, whether owners or tenants, the nonpayment of agreed charges, and the mismanagement of funds.⁴²Furthermore, facilities management skills and professionalism that could manage the infrastructure and services promised to residents do not appear to be growing as fast as the development of multi-unit buildings and estates.⁴³ These problems left unresolved have the potential to turn the schemes, particularly those established by government and those located in the lower end of the population demographics, into slums.⁴⁴

A problem that also requires resolution is the need to devise regulations to guide the calculation of service charges for the maintenance of schemes. Presently in many estates only the payment for electricity is dependent on consumption based on meter readings. The payment for other services like water and sewage treatment, security, cleaning, and the maintenance of equipment is levied by way of service charges distributed equally, based on the number of units in the scheme. A method which apportions service charges equally among units regardless of size of units is unfair and requires correction.

Meanwhile, if the problems enumerated in relation to the nature of title and the transfer thereof as well as the challenges relating to the management of schemes and the relationship between unit holders arise, the options open to the parties are to approach the courts or to resort to self-help. Unfortunately, self-help may result in injuries of different kinds to the parties. While resort to the courts should be encouraged, the cause lists of the courts are full, such that certain cases like those affecting human rights and high value claims are given priority.⁴⁵ It is submitted that the courts would be in a better position to resolve disputes and dispense justice if legislation were enacted to specifically address these problems. Delays in the conduct of litigation are also likely to be reduced if there were clarity in the law. Furthermore, both the parties and their attorneys would be better informed, benefitting from the greater certainty which specific statutes would likely bring. An understanding of the process for dealing with the challenges of the transfer of title and the administration of fragmented property schemes in another jurisdiction might facilitate the development of an effective process supported by appropriate legislation in Nigeria. South Africa has a working legal framework which has been developed over many years by the courts. The succeeding paragraphs engage in a critical discussion of the South African position and experience on the subject.

 

3 Sectional title schemes in South Africa

The need to introduce policy and legislation to facilitate the development of sectional title schemes in South Africa was driven by the necessity to encourage developers to actively increase such activities as would result in the increased availability of housing units.⁴⁶ The relevant legislation was expected to ultimately cause a shift from the "individualistic features of conventional ownership" to "communal and democratic" living.⁴⁷ On the part of the population, the considerations of buying into sectional title schemes include the possibility of an economy of scale via the contribution of members to provide increased security and affordability, and a communal lifestyle. While in its earlier days it was thought that sectional title schemes would be popular only with the lower economically empowered segment of the population, the tide is turning as the upmarket segment has witnessed significant growth in sectional title schemes.⁴⁸ It is estimated that the growth in sectional title schemes will continue in the years to come across all demographics. Indeed, since 2003 there has been a gradual decrease in the purchase of freehold properties year on year, compared to an increase of 5% in purchases in sectional title schemes. An annual average of 60% of all residential building plans approved, and of buildings completed in South Africa are sectional title units.⁴⁹ Interest in sectional title properties is no longer limited to the low-end segment of the property market.⁵⁰ The popularity of sectional title in South Africa necessitated the need for effective regulation which has been addressed by legislation over the years. The key provisions of the relevant statutes are considered in this part.

The legal framework for dealing with the challenge of the transfer of title and the administration of fragmented property schemes in South Africa comprises the Sectional Titles Act, 1986,⁵¹ the Sectional Titles Schemes Management Act, 2011,⁵² and the Community Schemes Ombud Service Act, 2011,⁵³ as developed by the courts.⁵⁴ The respective legislation makes copious provisions for what constitutes sectional title with the process for the registration of the transfer of ownership and other rights.⁵⁵ There are also provisions for the management of schemes and the regulation of the conduct of homeowners,⁵⁶ as well as the process for dispute resolution in community schemes.⁵⁷ The challenge vis-à-vis the legal framework is discussed in the next section.

3.1 The nature of and transfer of title in fragmented property schemes in South Africa

A sectional title property comprises three parts.⁵⁸ The first is the "section", a unit of the property over which a unit owner has the right of ownership, comprising the inner walls, floor, and ceiling of the unit. In addition to the section, the unit owner may also have the right to use part of the property other than the section to which he has ownership as an "exclusive use area".⁵⁹ The remaining part of the property not forming part of the section or exclusive use area⁶⁰ is the "common property" over which other owners of sections in the property have rights to use in accordance with rules applicable to all persons who are owners of sections in the property.⁶¹

The registration of a sectional title scheme commences with the developer who is required to lodge and register the sectional plans with the registrar of deeds, consequent upon which ownership in any unit or land, or any undivided share in such a unit or land shall be transferred by means of a deed of transfer signed by or attested to by the registrar.⁶² When a section or unit in a scheme has been registered in the name of a person, the ownership of that section is vested in the person by law,⁶³ concurrently with an ownership of such common property in undivided shares.⁶⁴ He is thereby entitled to a "participation quota",⁶⁵ which has an impact on the relative worth of the sectional unit held by him, upon which his vote is based in the determination of the affairs of the scheme,⁶⁶ and his undivided share in the common property.⁶⁷ The participation quota determines his proportionate contribution to the common expenses and the potential liability for his financial obligations.⁶⁸ In mixed-use sectional title schemes, the usual method of apportioning levies based on a quota relative to the size of units is jettisoned for other methods. This is because applying unit sizes to apportion levies would be unfair, considering that the use to which the varying units in the scheme is applied differs, necessitating different services and facilities for the benefit of different units.⁶⁹

Upon the registration of the owner's interest over a unit or an undivided share in a scheme in the register at the deeds registry, the owner may exercise all the rights of an owner, including obtaining a mortgage and creating a security interest over the unit, granting leases, and creating any other real right which could be presented to the registrar for registration.⁷⁰In the event of a sale, the registrar will register a transfer of a unit or of an undivided share upon receiving the required documents evidencing the sale.⁷¹

From the foregoing, there appear to be settled provisions of law addressing the issue of title and its transfer, as well as the effect of registration. The provisions are clear and potential parties do not need to guess at them, thereby making the transfer of title seamless if the parties follow the required process and submit the required documentation. A process which removes doubt or uncertainty on the part of developers and buyers into schemes, alongside their respective attorneys, has the potential to reduce if not to eliminate the challenges associated with the title to fragmented property schemes and their transfer in Nigeria.

The issue of the management of the sectional title scheme and the relationship between the parties is also addressed by statutory provisions in South Africa. This is considered in the next section.

3.2 The management of sectional title schemes in South Africa

The management of a sectional title scheme is entrusted to a "body corporate"⁷² created by law.⁷³ To avoid the occurrence of a time whereby a scheme would exist without a management system even when it is occupied by only a single homeowner, the Sectional Titles Schemes Management Act, 2011⁷⁴ (hereafter the STSMA) establishes a body corporate by operation of law. With effect from the date on which any person other than the developer becomes an owner of a unit in a scheme, the developer and that first homeowner and any person who thereafter becomes an owner of a unit in that scheme become members of the body corporate.⁷⁵ The body corporate has perpetual succession, giving it the capacity to sue and be sued in its corporate name.⁷⁶

The body corporate is responsible for the enforcement of the rules and for the control, administration and management of the common property for the benefit of all owners.⁷⁷ It is also endowed with authority to perform a myriad of functions including the establishment and maintenance of an administrative fund to cover operating costs, and a reserve fund to cover the cost of future maintenance and repair. The body corporate is endowed with the authority to require owners to contribute to the funds.⁷⁸

Contributions are levied on the owners in proportion to the quotas of their respective sections.⁷⁹ Other functions of the body corporate include the insurance of the buildings in the scheme,⁸⁰ and the maintenance of the common property to keep it in a state of good and serviceable repair,⁸¹complying with any notice or order by any competent authority.⁸² The body corporate is empowered to do all things reasonably necessary to carry out its functions and may employ the services of third parties as necessary.⁸³The trustees are appointed and hold office in terms of the STSMA.⁸⁴ They exercise the powers of the body corporate, standing in a fiduciary relationship to it.⁸⁵

Schemes are regulated and managed by rules which must provide for the regulation, management, administration, use and enjoyment of sections and the common property. The regulations are generally categorised under two headings, namely the management rules and the conduct rules,⁸⁶ which apply equally to all homeowners in the scheme.⁸⁷ The statutory provisions relating to the management of schemes have been tested in the courts over the years, and the courts have made pronouncements which have made the provisions clearer, developing the law in the process. For instance, in Wiljay Investments v Body Corporate, Bryanston Crescent⁸⁸ the court pointed out that the rules constitute the constitution of the body corporate, creating an agreement between the owners inter se and between the owners and the body corporate, and that the agreement

is intended to provide for a peaceful, reasonably certain, and presumably the most satisfactory arrangement possible under the circumstances for the use, enjoyment and maintenance of the property which forms the object of the hybrid rights of ownership created and introduced by the Act.⁸⁹

The trustees are to act in the best interest of the body corporate and ensure that its decisions on matters affecting the scheme are lawful, reasonable, and are related to the purpose of the body corporate as encapsulated in its rules. If decisions are taken in a procedurally unfair manner, such decisions are liable to be set aside.⁹⁰ Although the body corporate is empowered to enforce rules, any of its resolutions which would have an unfair adverse effect on any member will not be effective unless that member consents in writing within seven days from the date of the resolution.⁹¹ This requirement protects a minority member from the tyranny of the majority, where a decision of the latter would subject the former to undue injustice.⁹² A deadlock on such matters could be broken by referring the impossibility of a special resolution to the chief ombud for relief.⁹³

It is also necessary for the harmonious co-habitation of the members to abide by an unwritten code of mutual respect and forbearance, which requires them to recognise that compromises are necessary for the greater good, and that some measure of inconvenience has to be tolerated so that all can enjoy peace.⁹⁴ It is in that regard that duties are also imposed on homeowners to ensure that they use their sections, the exclusive use area and the common area in a manner that will not interfere unreasonably with the use by and enjoyment of other owners or cause nuisance to other occupiers.⁹⁵ The courts will interfere when necessary, for instance, to uphold the trustees' duty to administer and control the good governance of the property. This is necessary to preserve the character of the property or scheme, as those who buy into complexes should have a legitimate expectation that the quality of the scheme will be maintained.⁹⁶ Accordingly, a court will not interfere in decisions lawfully made to preserve the maintenance of a scheme's character and aesthetics.⁹⁷

To the extent that it may be necessary to have access through the section of a homeowner to carry out repairs in other sections, a duty is imposed on homeowners to grant the body corporate such access during reasonable hours and on due notice.⁹⁸

Meanwhile, the law recognises that the body corporate must have funds to carry out its functions, making it necessary that homeowners pay the levies assessed on their units timeously. It is reported that the greatest challenge in the audit of body corporates lies in the reconciliation of the municipal accounts attributable to incorrect accounting estimates and the allocations for water and electricity billings, with approximately 20% of individual homes of sectional title schemes being in arrears of levy payments at any given time.⁹⁹ Accordingly, where a homeowner fails to pay the levy assessed on his unit in terms of the participation quota, the rules empower the trustees of a body corporate to charge interest on overdue levy amounts, although the rate of that interest is limited to the maximum prescribed by the National Credit Act, 2005.¹⁰⁰ In relation to the imposition of a penalty on overdue levies or a special contribution, the body corporate is not permitted to debit a homeowner's account with an amount that is not a contribution or a charge in terms of the STSMA.¹⁰¹

Furthermore, to ensure that the funds accruing to the corporate body are not unduly depleted, section 10(1)(e) of the Income Tax Act, 1962¹⁰²exempts from taxation the levy and special levy¹⁰³ income of a body corporate, in addition to up to a maximum of R50,000 for their receipts other than levy income. Although the term "levy" is not defined in the Sectional Titles Act, 1986 the taxman recognises the levies collected from members to pay for expenditures arising from the management of the collective interests of members as tax exempt. However, penalties or interests charged on the late payment of levies do not qualify for tax exemption.¹⁰⁴

A scheme is likely to become dysfunctional due to a lack of maintenance of the property. Challenges with the collection of levies and the mismanagement of funds will ultimately result in the erosion of the value of the units,¹⁰⁵ a possible pointer to the trustees being ineffective. An owner may initiate proceedings on behalf of the body corporate when such an owner is of the opinion that he or she and the body corporate have suffered damages or loss or have been deprived of any benefit. The right arises where the body corporate fails to institute proceedings for the recovery of such damages, loss or benefit, or when the body corporate does not take steps against an owner who does not comply with the rules.¹⁰⁶ If the body corporate fails to institute the necessary proceedings within one month from the date of the service of a notice, the aggrieved owner may make application to the court for an order appointing a curator ad litem for the body corporate for the purpose of instituting and conducting proceedings on behalf of the body corporate.¹⁰⁷ Upon being satisfied on the existence of the conditions for appointing an administrator to manage a body corporate instead of the trustees, the court may make the appointment.

In Bouramis v Body Corporate of the Towers¹⁰⁸ the court held that the appointment of an administrator in place of the trustees is not to be made for flippant reasons. The applicant must show that breaches of the duties required under the law have occurred and that substantial prejudice to the homeowners may be caused if an administrator is not appointed by the court. A mere disagreement between the body corporate and a homeowner or group of homeowners will not suffice as a ground to appoint an administrator.¹⁰⁹ If made, the effect of the appointment is to take away the control of the body corporate from the elected trustees and hand it to the administrator, who will carry out the necessary remedial action with a view to restoring the affairs of the body corporate to the members of the body corporate in due course.¹¹⁰

Finally, the disputes likely to emanate from the management of the conflicting interests in sectional title schemes are better suited to be resolved by alternative dispute resolution mechanisms, rather that resort to litigation.¹¹¹ In that regard the Community Schemes Ombud Service Act¹¹² establishes a service to develop and provide a dispute resolution mechanism to regulate, monitor and control the quality of all sectional titles scheme governance issues.¹¹³ Any aggrieved person may make an application to the Ombud if such a person is a party to or affected materially by a dispute relating to a fragmented property scheme.¹¹⁴

 

4 Proposal for the potential reform of Nigerian law on fragmented property schemes

The experience in South Africa regarding residential fragmented property schemes considered in part 3 could provide a guide for law reform on the subject in Nigeria. It is evident from the discussion in part 2 that two critical issues require attention. First, there is a need to consider a reform in respect of the nature of title which a person who buys into a fragmented property scheme obtains, when the land on which the scheme is built is incapable of delimitation. In such a situation, the typical method of transferring title by an assignment of the whole of the interest of the unexpired residue on the certificate of occupancy of the developer is not possible. Secondly, reform is also required to address the challenges faced by homeowners in fragmented property schemes to make specific provisions for how the schemes are to be managed for the benefit of all parties concerned. Specific legislation is required to regulate the conduct of homeowners or their tenants on the one hand, and the interpersonal relationship of homeowners on the other hand.

A straightforward reform would be a proposal for each state in Nigeria to make specific provisions making it possible to register an interest equivalent to that in a statutory right of occupancy, which gives the owner exclusive rights to the unit against all persons. Like other holders of a certificate of occupancy, a unit owner in a fragmented property scheme should have unimpeachable title and a right to the absolute possession of his unit. He should also have a right to the exclusive use of the area set apart for his use. Alongside other unit holders, he should have a right to the common area in the scheme and any improvement thereon. Above all, he should have a right, subject to the prior consent of the Governor, to transfer, assign or mortgage the unit, which should be registered in his name.

A process for the realisation of that objective would require legislation containing appropriate provisions to require a developer of a fragmented property scheme to submit plans of the units appropriately identifying and describing the units at the land registry of the state where the scheme is located. That would make it possible for the public to search details on individual units in a scheme in the records at the land registry. As the units are allocated to buyers, deeds of assignment are to be executed between the developer and the buyer, which also are to be subsequently registered at the land registry. The deed of assignment will transfer the residue of the developer's interest in respect of the unit, thereby creating a registered title.

The process suggested above does not change the character of the alienation of property provided for in section 22 of the LUA which subjects an alienation of land to the consent of the Governor. The assignment of a unit by the developer to the buyer of a unit in a fragmented scheme remains subject to the consent of the Governor. Equally important is that a search will be possible at the land registry regarding the interest of a unit holder consequent upon the registration of the assignment. The buyer whose interest is registered can exercise the rights of a holder of a statutory right of occupancy over his unit in the scheme.¹¹⁵

Resolving the problem of homeowners in managing their scheme for the benefit of all parties and regulating the conduct of homeowners or their tenants as well as the interpersonal relationship of homeowners is not as difficult as resolving the problem of title. What is urgently required is for each state to enact laws to specifically provide for rules to govern the management of schemes, recognising schemes as legal entities capable of suing and being sued. The law should contain provision empowering unit holders to create a body corporate for each registered scheme. The body corporate should be empowered to levy a service charge based on a budget approved by the scheme as a body, reflecting the size of constituent units to ensure some element of fairness. Regulation of the use of units and the conduct of occupiers should be included in the rules to ensure that the use of individual units does not cause harm others, and to guide interpersonal relationships. The management and conduct rules annexed to the South African STSMA as regulations could provide some guidance.

 

5 Conclusion

The foregoing shows that sectional title schemes have been properly established in South Africa for over half a century. The legislation applicable has been subjected to review as necessary over the years to bring the phenomenon in line with the reasonable expectation of the population. The courts have also played an important role in that development, while academics and jurists continue to research into how the legal framework can be improved. The same cannot be said about such schemes in Nigeria. They are a recent phenomenon, particularly with the entry of the private sector into the development of fragmented property schemes, which appears to be focussed on the financially enabled upper segment of the demography.

With the enactment of the LUA in Nigeria in 1998, land law as it used to be understood changed to a large extent. Statutes and case law, particularly in relation to the nature of the title which a person could have in land, were altered, in addition to the requirements for the transfer of the title to land. Although some principles of law are not altogether eliminated, they are required to be modified to conform to the LUA. The effect is that the greatest form of title which could be held over land in Nigeria is a statutory right of occupancy for a term of years. For stand-alone properties not susceptible to delimitation there is no problem, even if such property forms part of a scheme.

However, there is a problem with the nature of the title which a person who is buying into a scheme comprising flats, apartments, or maisonettes and townhouses can obtain, and how that title can be transferred. The approach of using a deed of sublease to pass title cannot satisfy a person whose intent is to obtain the greatest form of title over property which the LUA offers. A deed of sublease as a title over property offers less than that, as that form of title will never be the same as that of a holder of a right of occupancy. Buyers into fragmented property schemes are also confronted with a lack of rules to regulate the management and conduct of homeowners. These problems require solutions. This article considers the problems with the potential available for reform. The proposals for reform in part 4 above would go a long way towards solving the problems.

 

Bibliography

Literature

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Case law

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Ibrahim v Mohammed (2003) LPELR-1409 (SC)

Nlewedim v Uduma (1995) 6 NWLR (Pt 402) 383 (SC)

Osho v Foreign Finance Corporation (1991) 4 NWLR (Pt 184) 157 (SC)

South Africa

BAE Estates and Escapes (Pty) Ltd v The Trustees for the Time Being of the Legacy Body Corporate and Pam Golding Property Management Services (Pty) Ltd 2020 4 SA 514 (WCC)

Body Corporate - Montpark Drakens v Smuts 2007 JOL 19484 (W)

Body Corporate of Marine Sands v Extra Dimensions 121 (Pty) Ltd 2020 2 SA 61 (SCA)

Bouramis v Body Corporate of the Towers 1995 4 SA 106 (D)

Central Developments Tshwane (Pty) Ltd v Body Corporate, Twee Riviere Aftree Oord (635/2019) [2020] ZASCA 107 (21 September 2020)

De La Harpe v Body Corporate of Bella Toscana (10088/2013) [2014] ZAKZDHC 63 (28 October 2014)

Herald Investments Share Block (Pty) Ltd v Meer; Meer v Body Corporate of Belmont Arcade 2011 2 All SA 103 (KZD)

Khyber Rock Estate East Home Owners Association v 09 of Erf 823 Woodmead Ext 13 CC (7689/2006) [2007] ZAGPHC 137 (14 August 2007)

Oribel Properties 13 (Pty) Ltds v Blue Dot Properties 271 (Pty) Ltd 2010 4 All SA 282 (SCA)

Wiljay Investments v Body Corporate, Bryanston Crescent 1984 2 SA 722 (T)

Legislation

Nigeria

Companies and Allied Matters Act 3 of 2020

Constitution of the Federal Republic of Nigeria, 1999

Lagos State Lands Registration Law 1 of 2015

Land Use Act 6 of 1978

South Africa

Community Schemes Ombud Service Act 9 of 2011

Income Tax Act 58 of 1962

National Credit Act 35 of 2005

Sectional Titles Act 95 of 1986

Sectional Titles Amendment Act 63 of 1991

Sectional Titles Schemes Management Act 8 of 2011

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Adesomoju A and Ramon O 2018 CJN Says Supreme Court's Diary Filled till 2021, Lawyers Worry https://punchng.com/cjn-says-supreme-courts-diary-filled-till-2021-lawyers-worry/ accessed 15 February 2023        [ Links ]

Allied Market Research 2020 Nigeria Facility Management Services Market Outlook - 2027 https://www.alliedmarketresearch.com/nigeria-facility-management-services-market-A06327 accessed 14 February 2023        [ Links ]

FESTAC Online Date Unknown FESTAC Town: History and Background https://festaconline.com.ng/festac-town-history-and-background/ accessed 13 February 2023        [ Links ]

Ghebru H and Okumo A 2016 Land Administration Service Delivery and Its Challenges in Nigeria: A Case Study of Eight States International Food Policy - International Food Policy Research Institute Working Paper 39 https://www.canr.msu.edu/fsp/publications/research-papers/Land_administration_service_delivery_and_its_challenges_in_Nigeria_A_case_study_of_eight_states.pdf accessed 12 February 2023        [ Links ]

Lagos State Land Use and Allocation Committee 2022 Schedule of Fees and Levies https://landsbureau.lagosstate.gov.ng/schdule-of-fees/ accessed 12 February 2023        [ Links ]

Libra Law Office Date Unknown Land Tenure and Land Use in Nigeria: Towards the Innovative Use of Sectional Title Ownership https://libralawoffice.com/wp-content/uploads/2020/09/LAND-TENURE-AND-LAND-USE-IN-NIGERIA-TOWARDS-THE-INNOVATIVE-USE-OF-SECTIONAL-TITLE-OWNERSHIP-LATEST.pdf accessed 13 February 2023        [ Links ]

Lightstone Property 2018 Sectional Title Buying Performance https://www.lightstoneproperty.co.za/news/Sectional_Title_buying_performance_September_2018.pdf accessed 15 February 2023        [ Links ]

Nigeria Property Centre Date Unknown VGC Area Guide https://nigeriapropertycentre.com/area-guides/lagos/lekki/victoria-garden-city accessed 13 February 2023        [ Links ]

Ojie E 2022 In Nigeria, Residential Associations are the New LGAs https://nairametrics-com.cdn.ampproject.org/c/s/nairametrics.com/2022/11/27/in-nigeria-residential-estates-associations-are-the-new-lgas/?amp=1 accessed 13 February 2023        [ Links ]

Okon D 2022 76% of Residents are into Energy Theft, Says 1004 Estate Chairperson https://www.thecable.ng/76-of-residents-are-into-energy-theft-says-1004-estate-chairperson accessed 13 February 2023        [ Links ]

South African Revenue Service 2012 Interpretation Note No 64 in terms of Section 10(1)(e) of the Income Tax Act No 58 of 1962 https://www.sars.gov.za/wp-content/uploads/Legal/Notes/LAPD-IntR-IN-2012-64-Arc-85-IN64-Issue-2-Archived-on-17-August-2015.pdf accessed 15 February 2023        [ Links ]

Schindlers Attorneys 2017 Penalty Fees/Charges and Sectional Title Body Corporate https://www.schindlers.co.za/2017/penaltychargesbodycorp/?pdf=8302 accessed 15 February 2023        [ Links ]

Sunday O 2020 1004 Estate Residents Bicker over Electricity Crisis https://guardian.ng/news/1004-estate-residents-bicker-over-electricity-crisis/ accessed 15 February 2023        [ Links ]

World Bank 2023 Land Area - Nigeria https://data.worldbank.org/indicator/AG.LND.TOTL.K2?locations=NG accessed 14 February 2023        [ Links ]

List of abbreviations

CILSA Comparative and International Law Journal of Southern Africa

FESTAC Festival of Arts and Culture

JIDS Journal of International Dispute Settlement

LUA Land Use Act 6 of 1978

OJLS Oxford Journal of Legal Studies

SARS South African Revenue Service

Stell LR Stellenbosch Law Review

STSMA Sectional Titles Schemes Management Act 8 of 2011

TSAR Tydskrif vir die Suid-Afrikaanse Reg

 

 

Date Submitted: 16 February 2023
Date Revised: 18 July 2023
Date Accepted: 18 July 2023
Date Published: 23 November 2023

 

 

Guest Editors: Prof C Rautenbach, Prof JM Pienaar
Journal Editor: Prof C Rautenbach
* Kolapo Omidire. LLB LLM (Ife) LLM (Wits) LLD (NWU). Faculty of Law, North-West University, South Africa. Email: kbomidire@yahoo.com. ORCiD: https://orcid.org/0000-0003-0874-2925. This article is dedicated to Prof Willemien du Plessis, to wish her a blissful retirement, and to appreciate her unwavering kindness and support from our very first meeting. The author also acknowledges and thanks the anonymous peer reviewers whose comments improved the quality of the article. The opinions and any errors in the article are, however, those of the author in their entirety.
1 Throughout this paper, reference to a "scheme" or "schemes" is to a collection of units in a building or units of buildings in a group of buildings in a residential complex or estate.
2 Baboolal-Frank 2021 JIDS 659.
3 See Edward 2022 OJLS 1021.
4 See the definition of "owner" in s 1(1) of the Sectional Titles Schemes Management Act 8 of 2011 (hereafter the STSMA). Discussion in this article is restricted to residential fragmented property schemes.
5 See Cowen 1973 CILSA 2.
6 Cowen 1973 CILSA 2.
7 Edward 2022 OJLS 1023.
8 See Ojie 2022 https://nairametrics-com.cdn.ampproject.org/c/s/nairametrics.com/2022/11/27/in-nigeria-residential-estates-associations-are-the-new-lgas/?amp=1.
9 The challenges and the attempts to resolve the problems relating to the transfer of title and the administration of schemes in Nigeria are considered in part 2 of the article.
10 See Libra Law Office Date Unknown https://libralawoffice.com/wp-content/uploads/2020/09/LAND-TENURE-AND-LAND-USE-IN-NIGERIA-TOWARDS-THE-INNOVATIVE-USE-OF-SECTIONAL-TITLE-OWNERSHIP-LATEST.pdf.
11 Okon 2022 https://www.thecable.ng/76-of-residents-are-into-energy-theft-says-1004-estate-chairperson; Egidiaro et al 2013 International Journal of Education and Research 9.
12 The author is not aware of any full academic article having been published, which considers the issues discussed in this article in relation to Nigeria.
13 The first housing estate in Nigeria was developed as a site and service scheme to provide plots to senior public servants by the government of Western region in 1959 in Bodija, Ibadan. See Ojie 2022 https://nairametrics-com.cdn.ampproject.org/c/s/nairametrics.com/2022/11/27/in-nigeria-residential-estates-associations-are-the-new-lgas/?amp=1.
14 Originally referred to as the "Federal Low-income Housing Estate", the estate has over 1,500 housing units.
15 Some of the housing units and serviced plots of land in the housing estates were allocated to different cadres of the armed forces and the remainder were sold to Nigerians by ballot. See FESTAC Online Date Unknown https://festaconline.com.ng/festac-town-history-and-background/.
16 See Yahaya 2019 Central Bank of Nigeria Economic and Financial Review 109.
17 For example, Victoria Garden City, the first gated lagoon-front residential community in Lagos, was developed in the early 1990s over a land area exceeding 200 hectares to provide accommodation for the upper segment of the Lagos population. See Nigeria Property Centre Date Unknown https://nigeriapropertycentre.com/area-guides/lagos/lekki/victoria-garden-city.
18 Land Use Act 6 of 1978 (hereafter the LUA).
19 The Long Title to the LUA.
20 Section 1 of the LUA.
21 Section 48 of the LUA.
22 See s 8 of the LUA. The statutory right of occupancy granted by the Governor of a State is typically for a term of 99 years.
23 See s 5 of the LUA.
24 Local government authorities are empowered to grant customary rights of occupancy for the use of land in the local government areas for agricultural, residential, and other purposes. See s 6 of the LUA.
25 Section 15 of the LUA. Also see Ibrahim v Mohammed (2003) LPELR-1409 (SC).
26 That is, the right to transfer, assign, or mortgage any improvements on the land.
27 See s 22 of the LUA.
28 See Libra Law Office Date Unknown https://libralawoffice.com/wp-content/uploads/2020/09/LAND-TENURE-AND-LAND-USE-IN-NIGERIA-TOWARDS-THE-INNOVATIVE-USE-OF-SECTIONAL-TITLE-OWNERSHIP-LATEST.pdf.
29 See Libra Law Office Date Unknown https://libralawoffice.com/wp-content/uploads/2020/09/LAND-TENURE-AND-LAND-USE-IN-NIGERIA-TOWARDS-THE-INNOVATIVE-USE-OF-SECTIONAL-TITLE-OWNERSHIP-LATEST.pdf.
30 The same problems face a sub-sublessee who may acquire the unit from an original sublessee.
31 Nlewedim v Uduma (1995) 6 NWLR (Pt 402) 383 (SC).
32 See Osho v Foreign Finance Corporation (1991) 4 NWLR (Pt 184) 157 (SC) 41.
33 Lagos State Lands Registration Law 1 of 2015. S 7 of the Lagos State Lands Registration Law (hereafter the Lagos state law) empowers any person who has power to assign or is entitled in law or equity to any land to apply to be registered as the land holder. The Lagos state law is discussed to show the challenges faced by the component states in Nigeria.
34 See Adeyinka 2020 African Journal on Land Policy and Geospatial Sciences.
35 World Bank 2023 https://data.worldbank.org/indicator/AG.LND.TOTL.K2?locations=NG.
36 Ghebru and Okumo 2016 https://www.canr.msu.edu/fsp/publications/research-papers/Land_administration_service_delivery_and_its_challenges_in_Nigeria_A_case_study_of_eight_states. pdf.
37 See Aderibigbe et al 2015 https://www.semanticscholar.org/paper/An-Assessment-Of-Land-Title-Registration-Process-In-Aderibigbe-Gbolahan/56abcd9f0b7e7278d8bd60bd2f82cee45f87da0a.
38 Banire "Administration of Consent Provision" 101.
39 See Lagos State Land Use and Allocation Committee 2022 https://landsbureau.lagosstate.gov.ng/schdule-of-fees/.
40 34% of a sample survey in Kaduna State of Nigeria reportedly indicate that they never bothered to undergo the process of registration of their interest in land, citing high costs and inordinate delay as among the reasons. See Nwuba and Nuhu 2018 Journal of African Real Estate Research 157.
41 Companies and Allied Matters Act 3 of 2020.
42 For instance, in 1004 Estate, a highbrow residential estate in Lagos, which is home to over 5,000 residents of different nationalities, there is an allegation of fraud of up to N5 billion and a lack of accountability levelled against the management (comprising facilities managers and the association executive) over a 5-year period. On the other hand, the chairperson of the 1004 Estate Residents' Association indicated that there had been a terrible loss of revenue affecting efficiency in the estate's administration caused by at least 76% of residents who are stealing power by bypassing their meters partially or fully from the actual reading of their consumption. See Sunday 2020 1004 https://guardian.ng/news/1004-estate-residents-bicker-over-electricity-crisis. Also see Okon 2022 https://www.thecable.ng/76-of-residents-are-into-energy-theft-says-1004-estate-chairperson.
43 See Allied Market Research 2020 https://www.alliedmarketresearch.com/nigeria-facility-management-services-market-A06327.
44 In many of the lower-end schemes, unit holders reportedly have added bedrooms to their units without obtaining any planning approval, some as many as three additional bedrooms, turning the estate into a slum. See Olatunbosun 2018 Journal of Geography and Regional Planning 56.
45 See Adesomoju and Ramon 2018 https://punchng.com/cjn-says-supreme-courts-diary-filled-till-2021-lawyers-worry/.
46 See Edward 2022 OJLS 1021.
47 See Cowen 1973 CILSA 4.
48 Purchases in Centurion and Sandton in the Gauteng province have recorded a growth of 11% since 2013, and while purchases of freehold properties have declined steadily by 2%, purchases of sectional title schemes recorded an average growth of 3%, with the Strand recording a 12% increase in 2017 when compared with the status in 2013. See Lightstone Property 2018 https://www.lightstoneproperty.co.za/news/Sectional_Title_buying_performance_September_2018.pdf.
49 Moloto 2020 SA Affordable Housing 29.
50 See Lightstone Property 2018 https://www.lightstoneproperty.co.za/news/Sectional_Title_buying_performance_September_2018.pdf.
51 Sectional Titles Act 95 of 1986.
52 Sectional Titles Schemes Management Act 8 of 2011.
53 Community Schemes Ombud Service Act 9 of 2011.
54 See Pienaar and Horn Sectional Titles. The authors undertake an exposition and analysis of the South African law relating to fragmented property schemes, highlighting how property law has responded to land reform in the post-apartheid constitutional dispensation.
55 Section 15B of the Sectional Titles Amendment Act 63 of 1991.
56 See the STSMA, and the regulations made thereunder.
57 See the Community Schemes Ombud Service Act 9 of 2011.
58 See Edward 2022 OJLS 1022.
59 See s 1 of the Sectional Titles Act 95 of 1986.
60 See s 1 of the Sectional Titles Act 95 of 1986.
61 See Horn and Pienaar 2021 Stell LR 96.
62 See s 15B of the Sectional Titles Amendment Act 63 of 1991.
63 See the definition of "owner" in s 1 of the Sectional Titles Act 95 of 1986.
64 See s 2(c) of the Sectional Titles Act 95 of 1986.
65 See s 32(3) of the Sectional Titles Act 95 of 1986.
66 See s 32(3)(a) of the Sectional Titles Act 95 of 1986.
67 Section 32(3)(b) of the Sectional Titles Act 95 of 1986.
68 See Van Schalkwyk and Van der Merwe 2008 TSAR 226. For residential schemes, the floor area of each section is used for the determination of the participating quota. See Body Corporate of Marine Sands v Extra Dimensions 121 (Pty) Ltd 2020 2 SA 61 (SCA).
69 See Van der Merwe 2018 TSAR 36.
70 See s 15B(1)(b)-(d) of the Sectional Titles Amendment Act 63 of 1991.
71 See s 15B(3) of the Sectional Titles Amendment Act 63 of 1991.
72 Section 1 of the Sectional Titles Act 95 of 1986 defines a "body corporate", in relation to a building and the land in a sectional title scheme, as the body corporate of that building referred to in s 2(1).
73 The Long Title to the STSMA explains the objective of the legislation as providing "for the establishment of bodies corporates to manage and regulate sections and common property in sectional titles schemes and for that purpose to apply rules applicable to such schemes; to establish a sectional titles schemes management advisory council; and to provide for matters connected therewith."
74 Sectional Titles Schemes Management Act 8 of 2011 (the STSMA).
75 See s 2(1) of the STSMA.
76 See s 2(7) of the STSMA.
77 Section 2(5) of the STSMA.
78 See s 3(1)(a)-(c) of the STSMA.
79 See s 3(1)(0 of the STSMA.
80 See s 3(1)(h)-(k) of the STSMA.
81 See s 3(1)(I) of the STSMA.
82 See s 3(m) of the STSMA.
83 See s 4 of the STSMA. Also see Oribel Properties 13 (Pty) Ltds v Blue Dot Properties 271 (Pty) Ltd 2010 4 All SA 282 SCA.
84 See s 7 of the STSMA.
85 See s 8(1) of the STSMA.
86 See s 10(2) of the STSMA.
87 See s 10(3) of the STSMA.
88 Wiljay Investments v Body Corporate, Bryanston Crescent 1984 2 SA 722 (T).
89 Wiljay Investments v Body Corporate, Bryanston Crescent 1984 2 SA 722 (T) para 727D.
90 See BAE Estates and Escapes (Pty) Ltd v The Trustees for the Time Being of the Legacy Body Corporate and Pam Golding Property Management Services (Pty) Ltd 2020 4 SA 514 (WCC).
91 See s 6(8) of the STSMA.
92 It has been argued that the insistence on the consent of a minority may fetter the discretion of the courts to do justice, considering that the courts are appropriately endowed with powers to balance individual interests against community interests. See Van der Merwe 2011 Stell LR 118.
93 See s 6(9) of the STSMA.
94 See Body Corporate - Montpark Drakens v Smuts 2007 JOL 19484 (W) para 21.
95 See s 13(1)(d)-(e) of the STSMA.
96 Central Developments Tshwane (Pty) Ltd v Body Corporate, Twee Riviere Aftree Oord (635/2019) [2020] ZASCA 107 (21 September 2020).
97 Khyber Rock Estate East Home Owners Association v 09 of Erf 823 Woodmead Ext 13 CC (7689/2006) [2007] ZAGPHC 137 (14 August 2007).
98 See s 13(1)(a) of the STSMA.
99 Steenkamp and Lubbe 2015 Corporate Ownership and Control 553.
100 National Credit Act 35 of 2005.
101 See Management Rule 25(5). Also see Schindlers Attorneys 2017 https://www.schindlers.co.za/2017/penaltychargesbodycorp/?pdf=8302.
102 Income Tax Act 58 of 1962.
103 Special levies are those raised to pay for capital improvements (such as the installation of a satellite dish, the laying of paving or the upgrading of security fencing) or to create a reserve for future capital expenditure (such as the future resurfacing of a tennis court or the future upgrading of an entrance and guard house).
104 See SARS 2012 https://www.sars.gov.za/wp-content/uploads/Legal/Notes/LAPD-IntR-IN-2012-64-Arc-85-IN64-Issue-2-Archived-on-17-August-2015.pdf.
105 See Moloto 2020 SA Affordable Housing 30.
106 See s 9(1) of the STSMA.
107 See s 9(2) of the STSMA.
108 Bouramis v Body Corporate of the Towers 1995 4 SA 106 (D) 109G-I.
109 See De La Harpe v Body Corporate of Bella Toscana (10088/2013) [2014] ZAKZDHC 63 (28 October 2014).
110 See Herald Investments Share Block (Pty) Ltd v Meer; Meer v Body Corporate of Belmont Arcade 2011 2 All SA 103 (KZD) para 46.
111 See Baboolal-Frank 2021 JIDS 659.
112 Community Schemes Ombud Service Act 9 of 2011.
113 See s 4 of the Community Schemes Ombud Service Act 9 of 2011.
114 See s 38(1) of the Community Schemes Ombud Service Act 9 of 2011.
115 The question may be asked as to why an amendment of the LUA is not proposed to incorporate the proposal above? The answer to that question lies in the fact that the LUA contains a peculiar provision which ties it to the Constitution of the Federal Republic of Nigeria, 1999 (hereafter the Constitution). S 315(5)(d) of the Constitution provides that "nothing in this Constitution shall invalidate the following enactments, that is to say ... (d) the Land Use Act, and the provisions of those enactments shall continue to apply and have full effect in accordance with their tenor and to the like extent as any other provisions forming part of this Constitution and shall not be altered or repealed except in accordance with the provisions of section 9(2) of this Constitution". Section 9(2) of the Constitution contains provision for the amendment of the Constitution for the sections dealing with the boundaries of the states (s 8) and the provisions of Ch IV thereof containing the provisions relating to fundamental human rights, and it demands a more stringent process than for the other sections of the Constitution. See Olanipekun "Constitutionality of an Unconstitutional Act" 155. Furthermore, section 315(6) further provides that the LUA shall continue to have effect as Federal enactments and as if it related to matters included in the Exclusive Legislative List set out in Part I of the Second Schedule to this Constitution. The combined effect of the constitutional provisions affecting the status and amendment of the LUA as they stands may make any proposed amendment thereof rather difficult if not impossible to realise.