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Namibia’s new Sectional Titles Act
This summary intends to afford clarity
as to the new Sectional Titles Act and the advantages and disadvantages thereof
as will be encountered by Developers and Registered Owners. The Sectional Titles Act , 2009 (Act No.2 of
2009) came into operation on 15 December 2014 in terms of Government Notice No.
252 published in Government Gazette No. 5633. The Sectional Titles Regulations
and corresponding Rules for Sectional Titles are contained in Government
Notices No. 223 and 224 respectively published in Government Gazette No. 5604
of 31 October 2014.
ADVANTAGES:
- 1.Units in Sectional Title Schemes no longer
have to be as closely integrated and tied to adjacent Units. Consequently Units
can now be seen as “loose standing” to a much greater extent. This allows for
more versatile layouts regarding gardens and the proximity to other Units. From
this will emanate a larger degree of privacy and the
feeling of disattachment from the larger Scheme. In practice Developers may
nonetheless opt to stay true to the previous densities and proximity of
adjacent Units for the sake of the most opportune and economic use of space.
The basic proviso is that at least one of the buildings of a Scheme should be
divided into two or more Sections;
- 2.Registered Owners of a Unit may now obtain a
Certificate of Registered Real Right in respect of exclusive use areas, which
allows for such Certificate to be used as a form of security. Previously this
was not possible. From this new possibility emanates a range of advantages
regarding the value this instills in ownership vested by such right as such
right is now deemed to be urban immovable property and can now be regarded as a
tangible asset.
- 3.When a Phase Development is anticipated, the
Developer can now acquire a Certificate of Registered Real Right in respect of the
portion of the common property not yet developed. Against this Certificate of Registered
Real Right, the Developer can now raise finance from a Banking Institution by
the registration of a Mortgage Bond securing such right. Furthermore, due to
such Certificate the Developer can now cede or alienate such right .
Previously, the Developer could not acquire such a Certificate and raising
capital for the Second Phase was more problematic;
- 4.The Registered Owner of a Unit now has greater
assurance regarding any future Phase Developments within a Scheme, as the
Building Plans regarding each such Phase should now already be submitted upon
opening of the first Phase of such Scheme. This provides better security of
title and avoids future deviations from the Building Plans by the Developer;
- 5.The new system of registration uses a
conventional Deed of Transfer, which is a more secure system. Consequently the
previous use of endorsements on Certificates of Registered Sectional Title has
been abolished and with such the possibilities of fraud or forgery have been
restricted;
- 6.The Registered Owner of two adjacent Units
can now consolidate such into a larger Unit. Previously this was not possible
and only subdivisions were catered for.
- 7.Each unit is now separately rated by the
Municipality, and removes the previous involvement of the Body Corporate, with
such separate rating the advantage of a municipal valuation of each Unit is
possible.
- 8.Disputes between Owners or between Owners and
Trustees can now be resolved by means of Arbitration which will ensure an
expedited and more cost effective means of resolving disputes.
DISADVANTAGES
- 1.Previously, Sectional Plans were approved by
the Municipality. Under the new Act Draft Sectional Plans have to be submitted
by a Land Surveyor for approval by the Surveyor-General. Thereafter such
approved Sectional Plans must be submitted to the Municipality. Although this
alleviates certain onerous responsibilities regarding the examination of such
Sectional Plans at the Deeds Registry, there is a severe dilatory effect
emanating from the Surveyor-General’s office due to administrative
difficulties.
- 2.The Municipality has also not been able to
facilitate the separate ratings of Units and the systems required to do such
still have to be implemented.
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