Conversion to sectional title – what it entails
Under the Share Blocks Control Act, there is provision for the conversion of share block units to sectional title, and a large number of share block properties have been converted to sectional title.
The procedure for conversion is governed by a schedule to the Act. The company directors have to convene a general shareholder meeting if at least 30 percent of the share block members wish to explore the opening of a sectional title register.
The directors must also have details of the proposed conversion such as sketches, building plans and rules, at hand at the general meeting. The directors must then give notice of a meeting for the consideration of a special resolution to open a sectional title register.
At this meeting, 50 percent of the share block members, with not less than 30 percent total voting rights must approve the decision.
The share block company has to give notice to all concerned parties that the company is applying to convert the property to a sectional title scheme.
The next step is to have a formal sectional plan drawn up by a land surveyor. Once the sectional plans are approved by the Surveyor General, a conveyancer will submit an application to the Registrar of Deeds for the opening of a sectional title register.
Before a company applies to the Registrar of Deeds for the opening of a sectional title register, the company must provide proof to the Registrar of Companies that either no valid objections were received or that any such objections have been addressed.
When the sectional title register is opened, all the units are registered in the name of the share block company. A member of the company is not compelled to take transfer of the unit he or she occupies it. His or her rights and liabilities against the company remain unchanged until the transfer of the unit. So, it is possible to have both share block and sectional title apartments in the same building.
The sectional title unit owners, together with the share block company, will make up a body corporate and will assume responsibility for administration and maintenance of the property.
The share block company becomes liable to the body corporate to pay the levy contribution on units that have not been transferred from the company to individual owners.
Those members who have not taken transfer of the units they occupy have to make a monthly contribution or levy payment to the company, which pays the contribution for those units to the body corporate.