The Body Corporate of Marsh Rose vs. Steinmuller and Others - (02 Nov 2023)

For a property in a sectional title scheme to be transferred into the name of a purchaser, the body corporate must issue a clearance certificate

Property

Present appeal concerns the interpretation of Section 15B(3)(a)(i)(aa) of the Sectional Titles Act, 1986 (the ‘embargo provision’)The appeal is against the decision of the High Court, which ordered the appellant, a sectional title body corporate, to issue a clearance certificate in respect of a property sold in execution, against the security of an amount paid into the purchaser’s (the first respondent) attorneys’ trust account, pending the outcome of proceedings to be instituted by the appellant for the recovery of amounts owing in respect of the property.

For a property in a sectional title scheme to be transferred into the name of a purchaser, the body corporate must issue a clearance certificate. The embargo provision, however, entitles a body corporate to refuse to issue such certificate until all moneys owed to it in respect of the property have been paid, or provision has been made, to the satisfaction of the body corporate, for the payment thereof.

The contract, as a matter of law, was concluded between Mr. Steinmuller and the Sheriff. It stated that upon performance of his contractual obligations, Mr. Steinmuller was entitled to cancel performance by the Sheriff. Equally, it held the Sheriff was entitled to compel performance by Mr. Steinmuller. Neither Standard Bank, nor the body corporate were parties to the contract.

Mr. Steinmuller had no legal interest in the determination of the amount due to the body corporate. The debt owed to the body corporate was that owed by the registered owner of the unit. Even if it was accepted that the conditions of sale obliged Mr. Steinmuller only to pay ‘levies’ rather than ‘all monies’ due to the body corporate, that the contractual term did not limit the statutory right conferred upon the body corporate by Section 15B(3)(a)(i)(aa). Mr. Steinmuller’s claim to transfer, assuming compliance with his contractual obligations, lay against the Sheriff and not the body corporate.

The high court order compelling the body corporate to give transfer was not competent, since the body corporate was not the owner of the property. The broader question of provision of security did not arise. It stated that the order requiring the body corporate to institute action against Mr. Steinmuller to recover what was due to it, was unsustainable since the body corporate had no cause of action against Mr Steinmuller. Supreme Court therefore upheld the appeal.

Tags : CLEARANCE CERTIFICATE PROVISION STATUTORY RIGHT