Main Menu
Login
STO Forums
Type your search criteria above and click Search to search the forums.
To see if someone has already answered a query similar to yours, click the Search button above and search for terms related to your question.
SGM for extension of a unit where extension has already taken place
Please consider the following:
A building is sold as a Sectional Title Scheme by a developer. The building is old, and consequently, in redeveloping the property, the developer extends one of the units to exceed the size indicated on the Sectional Title plans. All construction, excluding cosemtic changes (installation of BICS, etc.) is complete before the BC is formed for this new Sectional Title Scheme. Seven months after the formation of the BC, the Managing Agent advises the trustees of said BC that an SGM be called to approve the extension of the unit cited above, where the managing agent notes the extension has already been undertaken, as per above. I would argue no SGM is required: but simply that the said unit's size difference must be acknowledged in a legal written document between the BC and the owner of the unit, whereby the owner undertakes to pay an adjusted levy going forward acknowledging the size difference and the consequence hereof i.e. a higher participation quota for said unit. What would you think? (I am aware of the requirements for an SGM being held per Section 35[2] [a] [53], specifically either through a direct resolution of the trustees, or by request of owners holding a minimum of 25% of title, per participation quota: the nub of the question is why the extension must be rubber-stamped at an SGM - or even at the AGM - at all.)
Replies
You must login to post a reply.
RE: SGM for extension of a unit where extension has already taken place
It is 25% of the total participation quota.
RE: SGM for extension of a unit where extension has already taken place
Hi Darron, The Trustees can't overlook their legal obligations. The can't charge a nominal levy for that unit just because it is not on the S/T Plan. They must ensure that the Plan is amended. They should inform the owner that they will help him with the admin involved to get the Plan updated, but all associated costs are for the owners account.
RE: RE: SGM for extension of a unit where extension has already taken place
Hi Mike, indeed - but what ARE the trustees' legal obligations considering the extensions have already been effected and WERE affected prior to the formation of the BC. The Surveyor-Generla has already approved the modified Sectional Title plans that detail the enlargement of the unit in question. Consequently, the owners have nothing to vote on per se: they would not be voting in a size difference - the difference is already there.
RE: SGM for extension of a unit where extension has already taken place
As Mike says they legal requirements have to be complied with. There are no short cuts when sections get extended. § 24 must be complied with. It could be trickier if the approval is sought AFTER the deed has been done. There are some "what ifs", e.g. the Surveyor General does not approve the plans (§24 (5)); if the extension is more than 10% a bond holder withholds approval (§ 24 (6)) and the real big one what if the owner fails to get a special resolution passed (§ 24 (3))?
RE: RE: SGM for extension of a unit where extension has already taken place
Hi Myburgh, as stated - the extension has already taken place: it took place before the formation of the BC, and in fact, took place before first transfer of the whole block. So this is a case of putting the cart before the horse in the first instance. Whilst the BC has amended the Sectional Plans and the amendment has been approved by th eSurveyor General, I would argue the onus was in fact on the Developer to have said approved and NOT the BC. Further, as all of this HAS happened, it seems incomprehensible that the BC should convene to approve extensions that have taken place: consequently I argue that the participation quota must simply be acknowledged by affected parties. Or what would you argue?
RE: RE: RE: SGM for extension of a unit where extension has already taken place
Hi Damon, My opinion is that the current situation has a S/T Plan that is not accurate. It can't just be overlooked but must be corrected. The new owner is responsible for the correction of the Plan.
RE: RE: RE: RE: SGM for extension of a unit where extension has already taken place
Hi Damon. To quote you, "The Surveyor General has already approved the modified (amended)Sectional Title plans that detail the enlargement of (extension to)the unit in question." I presume you meant that the S.G. send these approved, amended plans to be registered at the deeds office? The P.Q. schedule attached to the registered amended plans will show the larger measurement and the plans themselves will show the extended unit concerned. So,the trustees are already empowered to charge you for the registered square metres and must do so forthwith.Taken as read that if the developer forgot to include the extension in his application to the S.G., then you will have to follow the advice given to you and have the plans amended now at your own expense.
RE: RE: RE: RE: SGM for extension of a unit where extension has already taken place
Hi Mike - the BC absolutely intends to have a corrected plan and participation quota adjusted accordingly as stated, and, as stated has had the necessary reconfigured dimensions approved by the Surveyor General. So - to return to the question: surely a resolution supporting the extensions and aforementioned participation quota adjustments is neither required at an SGM nor an AGM for that matter - in that the stated extensions were physically in place before both the formation of the BC and first transfer of the first unit within the total block.
RE: RE: RE: RE: RE: SGM for extension of a unit where extension has already taken place
Hi, Darron. I must support the comments from Myburgh, et al. Just because the developer failed to comply with the Act, this does not excuse the Trustees from their duty to do so. The Trustees have inherited an unsatisfactory situation from the developer, and must now sort it out by taking the necessary legal steps.
RE: RE: RE: RE: RE: RE: SGM for extension of a unit where extension has already taken place
Hi Darron. So much activity since I last posted a comment!The land surveyor attending to the amendment will have asked the trustees for a copy of the resolution showing that the B.C. has approved of the extension.There can be no amendment to the registered sectional title plans without the approval of the B.C.
RE: SGM for extension of a unit where extension has already taken place
In my opinion, after having reread the question, the following is of importance:
"All construction, excluding cosemtic changes (installation of BICS, etc.) is complete BEFORE THE BC IS FORMED for this new Sectional Title Scheme."
The extension occurred as part of the developer's action, not during the existence of the BC.
Under these circumstances only the rectification of the sectional plans and incorporation of the correct PQ is what the BC has to require.
Who pays what in terms of neglect to get the plans drawn, is another debate - IMO this should be carried by the developer, and if he is history, the owner of the unit must cough up - which is beyond the question regarding rubber stamping or not.
RE: RE: SGM for extension of a unit where extension has already taken place
Thank you Gerhard - and, where theory breaks down in practicality, the amended plans have, according to the Managing Agent, already been approved by the Surveyor General: without the BC resolution Valerie cites above. Thank you all for your contributions to this debate.
Advertisements
Website Statistics
- Forum Topics: 6190
- Users: 13951
