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.

• 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.