Exclusive use rights in terms of sectional title legislation
Author JG Horn and GJ Pienaar
Affiliations: B Proc LLB LLM MA (HES) LLD, Senior Lecturer, University of the Free State; B Jur et COMM LLB LLD, Professor, North-West University (Potchefstroom)
Source: Stellenbosch Law Review, Volume 31 Issue 1, 2020, p. 91 – 109
In this article, the focus falls on exclusive use rights in sectional title ownership. It investigates the nature of the changes brought about to rights of exclusive use after the commencement of the Sectional Title Schemes Management Act 8 of 2011 (“STSM Act”) and the Community Schemes Ombud Service Act 9 of 2011 (“CSOS Act”). It is submitted that the aforementioned legislation streamlined the position for the creation of rule-based exclusive use rights and also relieved uncertainty about the existence of these rights. The fact that rules need to be submitted to the Community Schemes Ombud Service (“the CSOS”) for examination, approval and custodianship, will in future, when the ombud service becomes fully operational, facilitate the tracing of and provide confirmation of the existence of rule-based exclusive use rights within sectional title schemes. The article furthermore explores the nature of the rules of a sectional title scheme. The current position held by courts, albeit referred to in connection with homeowner’s associations, is that these rules are contractual in nature, which is dogmatically unsound. It is submitted that Willow Waters Homeowners Association (Pty) Ltd v Koka could be used as authority for the argument that these rules are the objective law of an autonomous statutory association. Furthermore, the interpretation of the agreement between the parties is not an accurate measure to determine the nature of the right, but that the subtraction from the dominium test should be applied cautiously to prevent the creation of real rights in a haphazard fashion that will exacerbate legal uncertainty.
This article also investigates the distinction between rule-based exclusive use rights created in terms of section 10(7) and (8) of the STSM Act and exclusive use rights created in terms of section 27 of the Sectional Titles Act 95 of 1986 (“Sectional Titles Act”). The difficulty that this distinction leads to in practice is illustrated by a critical discussion of case law and common-law principles of property law. It is proposed that rule-based exclusive use rights should be clearly described as such in contracts of sale to alleviate uncertainty regarding their existence. This article proposes to paint a clearer picture of the different types of exclusive use rights found in practice and how new legislation influences these rights.