Advisory: Registration of a Sectional Title under the Sectional Properties Act 2020

Registration of a sectional title is a pretty straightforward one that involves three significant steps. The first step entails the registration of a sectional plan for the property. 

 

This will include a geo-referenced plan with a bit more details than the architectural drawings that used to be utilized in the long term leases in the previous regime. The second step then is the creation of new individual titles for all units in the property. 

 

This of course therefore means that the mother title is cancelled. The third step is the establishment of an Owners Corporation as provided for under the Act. 

 

It is important to note that the Owners Corporation to a large extent takes the place of the Management Companies that used to be incorporated for similar purposes under the previous regime that dealt with long term leases.

Owners’ benefits under the Act

The SPA makes provision for a mechanism of apportioning the common property to each unit owner. Previously, unit owners held long term leases for their units while the management companies incorporated for the management and administration of the property would hold ownership of the common places. 

Under the SPA, each unit owner owns a fraction entitled to him depending on his ownership and holds title over the common areas in common with all other unit owners. The Owners Corporation therefore in essence does not own any common areas but its duty is solely for the management and administration of the property. The common areas are therefore no longer owned by a common entity but directly by the owners.

Further, the SPA provides for a mechanism of defining each owners interest in the property by way of geo-referencing. This means that there exists detailed definition of the areas and units owned by an owner.

The SPA also provides for the closure of the main/mother title to prevent further dealings on the title and hence goes a long way in protecting the rights of the unit owners from unscrupulous developers who may at their own behest proceed to attach the title to the property on a charge taken out by them.