Critically assessing sectional-title adjudications in South Africa - Fellows' seminar by Cornelius van der Merwe

Sectional title of apartments, condominiums and gated estates has become ubiquitous across the world – not least in South Africa – but what happens when you have annoying neighbours and interfering or useless bodies corporate? Cornelius van der Merwe of the Faculty of Law at Stellenbosch University is looking at this in more detail with the aim of writing a case book on adjudications in terms of the Community Service Ombud Service Act together with sectional title practitioner Graham Paddock. “In 2016 the South African government introduced a Community Schemes Ombud Service for the swift and inexpensive resolution of disputes in community schemes of which sectional title schemes are the most important,” he explained. “Any person who is a party to, or materially affected by, a dispute, may lodge an application with a regional ombud. My aim is to critically assess the quality (degree of excellence) of the almost 2000 adjudications (judgments) given by adjudicators from October 2016 to date.” He explained that sectional title ownership involves a threefold legal relationship namely the acquisition of ownership of a section, undivided co-ownership shares in the common property and membership of a body corporate or apartment ownership association which acts through general meetings and trustees, assisted by managing agents. As such it straddles property and corporate l law. “Some authors regard it as a form of nebulous ownership with many limitations which continuously poses the question - are you a genuine owner?” he said. It’s also not a new phenomenon - the first known case of this type of subdivision of buildings and the land into unit and common property occurred as far back as 500 BC in Elephantine in Egypt comprising a set of four-story buildings built around an oasis and housing a Jewish community. The transfer deed is still in the New York Museum. Van der Merwe also pointed to other examples dating from the Middle Ages to alleviate housing shortages in walled cities built for defence. Examples are the walled cities of Carcassonne and Rothenberg. The earliest legal interpretations can be found in Roman Law which specified ‘superficies solo cedit’, which means that what is on the surface yields to the land or, in other words, whatever is built on land belongs to the owner of the land. “But modern statues regulated conditions for such properties in much more detail especially after the world wars,” said Van der Merwe. Condominium statutes were adopted in the European states, the British Commonwealth, the United States, Latin America, Socialist Europe and Africa. Belgium in 1924 was the first and many countries followed with examples including commonwealth countries such as Australia and Canada and South Africa, starting with New South Wales in 1961. By the 1970s nearly all of Europe and the US had at least first-generation statutes. Interestingly, the Soviet Union introduced legislation in 1961 which included the principle of not making profit and allowed for physically dividing properties in the case of divorce. South Africa introduced such legislation in 1971, then again in 1986 and 2011. Van der Merwe outlined some of the main reasons for such sectional title living including alleviating housing shortages due to urbanisation and land scarcity; replanning and redevelopment of city centres; better utilisation of land, water and sewage resources; bringing home ownership to a larger segment of the population; as well as the advantages of closer social interactions, access to amenities and enhanced security. “But such close proximity living with noisy neighbours, children, pets and other disturbances can also pose problems,” he said.

Seeking South African solutions

He explained in detail the introduction of the third-generation statutes in South Africa namely the Sectional Titles Schemes Management Act and the Community Schemes Ombud Service Act in 2011 and the corresponding regulations that came into operation on 7 October 2016. “In South Africa from 2000 onwards the courts were inundated with sectional-title related complaints,” he said. “In 2004 three consultants were appointed who were mainly tasked to separate regulation and management provisions in the Sectional Management Act and introduce a dispute-resolution scheme to replace the court processes. This culminated in the Sectional Titles Scheme Management Act and Communal Scheme Ombud Service Act in 2011 as well as a relocation of activities to the Department of Human Settlements.” “The Community Ombud was seen as an African solution,” continued Van der Merwe. “The Minster appointed the Chief Ombud. There are also regional ombuds appointed in Cape Town, Durban and Pretoria and circular local offices at city level.” “By 2021 the service covered 6000 schemes, one million units, and had handled 2000 disputes and 20 appeals. Most of these concerned behaviour issues, repairs, the calling of meetings, managing agent appointments and access to scheme documents,” he said. “The first call is the Ombud. If there is a reasonable prospect of reconciliation it goes to a conciliator and, if not, then to adjudication. The court machinery is used for appeals.”

Analysing the cases

As an example of the type of complaints that arise from such up-close and personal living, Van der Merwe pointed to a landmark case in New South Wales which concerned smoking and relied on the World Health Organization’s 2003 Framework Convention on Tobacco Control to show that there is no safe level of exposure to primary and second-hand smoke and to instigate smoking-limitation rules on the property. He highlighted three similar cases that have been brought before the South African community ombud service. “The adjudications have pointed to the health risk being more serious than any property risk.” However, his early analysis also shows that overall “the community ombud service adjudications are not necessarily very concise or coherent, there does not seem to be sufficient knowledge of the law, the adjudicators generally are not paid enough to do detailed research, and a lot of the money allocated to the service seems to be used on marketing roadshows.” It’s also an area of property ownership that is likely to get even more complicated as we try to replan and redesign cities to accommodate an ever-growing global population as well as the impact of new technologies. Van der Merwe pointed to the growth of different types of sectional title including commercial, industrial, office, ‘dockominiums’, time sharing (like AirBnBs “which started with three guys renting out an air mattress”) and convertible space units, cubic units, and even flying freeholds in the United Kingdom (where part of a building – like a balcony – hangs over another property or communal area). All of these bring unique and ongoing legal challenges. He ended by noting the need to both learn from other parts of the world as well as come up with unique solutions for problems specific to the South African setting.   Michelle Galloway: Part-time media officer at STIAS Photograph: Ignus Dreyer