A body corporate of a sectional title scheme is required to obtain the unanimous consent of all owners before engaging in the alienation of any part of the common property.
This emerged from a Supreme Court of Appeal (SCA) judgment in the case of the Body Corporate of San Sydney v Shivani Singh and Others, which also shed light on pivotal aspects of the Sectional Titles Act and the Sectional Titles Schemes Management Act.
This dispute erupted when the Body Corporate of San Sydney in Ballito, KZN, sought to transfer its right to extend its sectional title scheme to a third party, HF Property Investments (Pty) Ltd. The central query rested on whether the body corporate, having seen the developer's extension rights lapse, could sell this right without unanimous approval from unit owners.
The case began when the body corporate moved to execute an agreement it had established in 2018, aiming to cede its extension rights amid a backdrop of ongoing disputes regarding the occupancy and registration of three buildings that were controversially erected on common property. The first respondent, Shivani Singh, alongside other members who opposed the agreement, contended that the necessary consents were being unjustifiably withheld, thereby questioning the legality of the sale.
Inside one of the units at San Sydney in Ballito, KZN. Picture: Screengrab
During the exhaustively detailed hearings, it was clarified that the statutory provisions of the Sectional Titles Act require a body corporate to gain the unanimous consent of all owners before engaging in the alienation of any part of the common property, which had led to the high court's earlier dismissal of the body corporate's application. The ruling stressed that consent cannot be arbitrarily denied without good legal cause, spotlighting the intricate relationship between individual rights of owners and collective governance within sectional title schemes.
In an important turn of events, the SCA concluded that while consent from all affected parties was indeed necessary, such consent should not be unreasonably withheld. The court ruled that Singh’s objections largely stemmed from a misunderstanding of the implications of the sale, marking a strong endorsement of cooperative engagement among sectional title owners. The SCA instructed Singh and other respondents to provide the necessary consents for the body corporate to obtain the required legal documents to facilitate the extension, emphasizing the need for adherence to established procedures.
The implications of this ruling extend beyond the immediate parties involved, as it reaffirms the necessity for transparent governance within sectional title schemes.
Moreover, the judgment touches on broader themes of trust and collaboration within community ownership structures. The court observed that a lack of communication and transparency can lead to misunderstandings and distrust, particularly where financial implications and property rights are concerned. As such, the SCA encouraged avenues of negotiation before resorting to legal measures, urging all parties involved to foster a spirit of cooperation and mutual understanding.
