CONDOMINIUM, APARTMENT OWNERSHIP, STRATA TITLES, HORIZONTAL PROPERTY

PROF. CORNELIUS VAN DER MERWE

I.

INTRODUCTION Threefold unity

Owner of unit or apartment Co-owner of common property Member of management body

owner of land, owner of building no separate property in land and buildings or part of building

superficies solo cedit

desperate need for housing

elephantine, walled cities, WORLD WARS: psychological need

special statutes on strata title

Europe and South America; Puerto Rico (58) United States; New South Wales(Australia); British Columbia (Canada), Singapore (68), South Africa(71), New Zealand(72), Malaysia (1985). Sri lanka, Indonesia Former Socialist, Middle-East, United Arab Emirates, Dubai, Japan (62), Korea (1982), Maharastra (63)

threefold unity
owner, co- owners, members of management corporation

II. USES OF CONDOMINIUM residential condominiums

high-rise, low-rise; maisonettes, duplex apartments; semi-detached housing; conversion of old rental apartments and houses into condominiums; duos, trios

Commercial condominiums
Shops, warehouses, motels, parking garages Sao Paulo, Rio De Janeiro 80% apartments commercial; Lucky plaza Orchard Street

Industrial condominiums
Each floor different industry: chemical substances; engineering tools; medical instruments

Professional (office) condominiums

Doctors, lawyers, architects, engineers, printers, graphic art industries; interior decorator

Mixed condominiums
Multiple use: residential, professional, industrial, commercial; one building not undertaker and medical clinic

Resort condominiums: rental pools, time-sharing

Coast, mountains, national parks; time-sharing based on condo concept; cubic ownership and here interval ownership; recreational facilities, golf, swimming rental pools; capital investment as opposed to buying time-share units

Condominium statutes geared to residential schemes:

II. REQUIREMENTS: BUILDING AND UNIT Building

Must be a building; permanent, non-combustible materials; more that one unit Walls, ceilings, floors; suitable for human use; toilet, zink and cooking facilities

UNIT/APARTMENT

Modern kinds of developments Vacant site condominiums (dockominiums) Caravans,

mobile homes, strata title mooring slips: yachts, jetties

Air space condominiums (pollipop)

New York: lollipop: arispace: reinforced shaft; Airspace above public streets or railway stations to provide blocks of offices;

Parking garages

Commercial structures without any walls; parking spaces in parking garage: clearly demarcated

Neon signs
Stratum need not be cubic space: Comm. units

III. ESTABLISHMENT OF CONDOMINIUMS Condominium plan Condominium register in Land Register IV. PHASED DEVELOPMENTS single phased developments
first generation statutes: buildings must be sufficiently completed for occupation; if sale before stringent consumer protection measures: escrow; restricts adaptability, cash flow i. smaller initial outlay; ii cash flow eased; iii adapt to market demand; iv better land utilization; v purchaser: better facilities, amenities

advantages of phased developments Mechanisms:

UCA: 4 kinds of development rights

convertible land
building on undeveloped land

convertible building space

reserve higher floors for later development acc. to market

additional land

extend by later addition of land: further amenities; subdivision

withdrawable land
financial diff. impossible to complete scheme Quid pro quo for flexibility: time-limit; sufficient disclosure of physical and legal aspects of project

Consumer protection

V. UNIT AND COMMON PROPERTY Importance of distinction

I. More extensive powers; 2. responsibility for maintenance; 3. insurance: double insurance

Problem areas 1.Broken windows, intercoms, parlophones

W. Sing.:part of c.p; SA: median line;intercoms:Sing. accessory lot

2. Hot water installation

serves only one unit: lotholder

3. Leaking roof
SA median line: Sing: common property

VI. SHARE VALUE (participation quota, lot entitlement)

rights & obligations acc. to share value

Share value determines Share in common property Contribution to expenses Value of vote at general meetings Formulae employed Equality Relative size (Floor area, cubic area) Relative value (market value) Developer: just and equitable

Obj. utility: size, components, location, proximity to c.fac. Tested by Commissioner in Sing., Valuer-General in NZ

Criticism Only one formula

3 totally divergent matters: 3 different formulae

Relative contributions
Service test: frequency of use: lifts, swimming pool, common heating and airconditioning installations Singapore: unanimous resolution Periodic reallocations: NSW by Surveyor-General in unreasonably made Alaska: Periodic appraisal due the changing circumstances New highway at back cutting off clear view of the sea, land acquisition of parking spaces

Virtually unalterable

VII. STRATA OWNERSHIP: TRUE OWNERSHIP? Individual ownership of flat

Ownership; master of his flat, manage, use and enjoy, alter, decorate, animals, parties, invite hippy friends

Limitations Nuisance
Excessive noise, smells, overflow of sink; life intolerable

Statutory reciprocal easements Bylaws: Duty to repair

Stat. easements: support, shelter; passage: pipes, ducts

Positive duty to keep in good state of repair; units, fittings, pipes

Outside windows Balconies

Part of external wall: no advertisements etc
Alterations & additions: consent; no washing-line

Refuse disposal
Dry container

Animals
Consent of executive committee, number controlled 1dog, 2 cats, 11goldfish

Noise

Not between 11pm and 7am

reputation of building pound chillies

without sufficient floor covering.

Characteristic features Destructible building Structurally interdependent lots Intensified community life Permanent nature (at least 80%) More than mere lease

Landownership. Planning, environmental,peculiar type My flat is my castle, home sweet home

VIII. ENFORCEMENT OF OBLIGATIONS A. Financial obligations:contributions No vote: name and shame Fine: S$ 10,000: Draconian, absentee landl. Small Claims tribunal: cheap & quick Charge on unit in favour of m.corp. Attachment and forced sale B. Social obligations: adequately clothed, no offensive language or behaviour underpants, threats; shouting abuse fine (S$ 1000), no vote compulsory sale of flat
Germany, Switzerland, Austria: life unbearable, special resolution, priv sale, public sale warning, resolution, court proceedings possession for up to 3 years & family: not affect other ownership rights.

exclusion from possession: Spain, Holland, Denmark:

IX. MANAGEMENT Attendance of general meetings

very poor, SA quorum: over 50

units:20%; within hour Sing.2 in person; SA proxies, some systems: one person, 25% of vote

Reluctance to be council members

subsidiary owners and

immediate family; love and charity; high duty of care

Managing agent or professional manager:

council, Germany profess. expensive

appointed by

How democratic is general meeting? One lot, one vote: one owner, one vote Poll even after result, according to value: loaded Non-proprietors: spouses, mortgagees, lessees, children (Mandela
16); economic interests, social interests, temperature of pool; when barbeques on the lawn?

Two-tier management structure

I. ANCIENT INSTITUTIONS OF CONDOMINIUM

Oases; housing shortage, Jewish colony of Elephantine in Egypt; buildings divided into multi-ownership units Superficies solo cedit Built on land part of land; no separate ownership of floors/apartments Shortage of housing Whenever acute shortage of housing; law devised something to provide necessary accommodation Stockwerkseigentum
12th century: separate floors, storeys; cellars equipped as taverns, pubs for beer underneath house belonging to other; shortcoming: not clear division between individual and common property: stairs; no management structure; no resolutions of disputes; streithuser; differently painted: see from a distance

European Codifications Superficies solo cedit; only France (art 664) and Spain

II. MODERN STATUTES ON CONDOMINIUM

Need statutory foundation to legitimise and to regulate in more detail; legitimate basis for providing title to apartments Especially after world wars European states World Wars Belgium (1924), Greece (1929), Italy (1935), France (1938), Austria (1948), Netherlands (1951), Germany (1951), Spain (1939), Switzerland (1963), Turkey (1965), Denmark (1965) + second generation statutes (Catalonia Act (2007) British Commonwealth Australia: New South Wales Conveyancing (Strata Titles) Act (1961), Canada (1966), Singapore (1968), South Africa (1971), New Zealand (1972), Malaysia (1985), England (Commonhold & Leasehold Reform Act (2002),
Half of Act deals with insolvency of the management corporation Codified 300 years of case law on condominiums: with little

Scotland (Tenement (Scotland) Act 2004))

modernisation

United States Puerto Rico (1958); Federal Housing Act (1961); first generation statutes (1969 all 50 states); shortcomings (terminology, diversity, skeletal); Uniform Condominium Act (1977);
National Commissioners of Uniform state laws: devoted to obtain uniformity; prepare uniform laws to be adopted by separate states: Uniform Condominium Act (1977) Bar Association (1978); 1980 minor amendments 14 states;

Minor amendments (1980: Conformity with Planned Community Act))

Legislative activity; reconsideration of UCA by drafting committee of uniform Planned Community Act; variety of land ownership regimes similar to condos

Uniform Common Interest Ownership Act (1982); Amendments (1994) Latin America Spanish & Portuguese influence Brazil (1928), Chile (1937), Argentina (1948), Cuba (1952), Mexico (1954), Venezuela (1958), Bahamas (1965), Nicaragua (1971), El Salvador (1972), Haiti (1975) Socialist Europe Hungary (1924), Poland (1934) (1994), Yugoslavia (1959), Soviet Union (1961), Czechoslovakia (1966) Leasehold rights to buildings; qualified persons; limited space; commerce restricted: no profit; if children out of house move to smaller apartment Other countries - Israel (1952, 1961, 1969), Lebanon (1962), Japan (1962), Zaire (1977), Korea (1984), United Arab Emirates (Strata Title Act 2007); Dubai (Strata Titles Act 2008) III. BASIC STRUCTURE OF CONDOMINIUM Three-fold unity Owner of unit Joint owner of common property Member of management corporation IV. REASONS FOR INTRODUCING CONDOMINIUM alleviate housing shortage
increase in population; escalating building costs; scarcity of land in vicinity of major city centres

better utilization of land resources

optimum use of available land; spread high cost of construction; common walls, cables. Sewerage; but construction costs higher the higher you go

fulfil psychological need for a home

social staus of home-ownership spread to larger segment of population; bind people to a fixed abode; economic, social and political stability; post war Europe resettling of refugees and homeless families

hedge against inflation

not money down the drain: leasing; can sell at a profit

closer social life, additional amenities, security replanning, redevelopment of city centres
new motorways, underground systems

7. public housing, housing for employees IV. USES OF CONDOMINIUM residential condominiums

high-rise, low-rise; maisonettes, duplex apartments; semi-detached housing; conversion of old rental apartments and houses into condominiums; duos, trios

Commercial condominiums
Shops, warehouses, motels, parking garages Sao Paulo, Rio De Janeiro 80% apartments commercial; Lucky plaza Orchard Street

Industrial condominiums

Each floor different industry: chemical substances; engineering tools; medical instruments

Professional (office) condominiums

Doctors, lawyers, architects, engineers, printers, graphic art industries; interior decorator

Mixed condominiums

Multiple use: residential, professional, industrial, commercial; one building not undertaker and medical clinic

Resort condominiums: rental pools, time-sharing

Coast, mountains, national parks; time-sharing based on condo concept; cubic ownership and here interval ownership; recreational facilities, golf, swimming rental pools; capital investment as opposed to buying time-share units

Condominium statutes geared to residential schemes: boundaries; allocation of quotas; termination of schemes; improvements & modernisation; reorganisation of units (but see s 1-207: non-residential may opt out) V. ALTERNATIVES A. LEASE not so much security of title as with ownership
can be evicted by owner; (rent-control); owner cannot be evicted by anyone; both has real rights in most countries

restricted use

rules of landlord; by-laws of condo: at lease control over content of by-laws

subject to rent increase

subject to increase of assessments for repairs, maintenance and managementc

not capital investment

money down the drain; expectancy of capital gain

many conversion: shortage of rental apartments;

But:

indigent older people frequent movers

B. REAL ESTATE COOPERATIVES What

Stock cooperative; share-block companies

commonly not recorded and dependent on landlord and tenant law, corporate law and trust law ot other law peculiar to form in which cooperative was organised.

stockholding in corporation plus use agreement covenants, conditions restrictions, by-laws, proprietary lease enforceability

Differences, Disadvantages (v. Condominiums) not real right in apartment or common amenities
cooperative and not in owners

restricted use: articles of association, resolutions

covenants, conditions and restrictions

NB financial interdependence stock (share) certificate as security for a loan? company do not strive for harmonious residential community History 1882 (Barrington: New York); 1st World War (housing shortage);
New York, Chigaco, Southern California

Depression; 2nd W War

High mortgage repayments commitments

Today: middle and low income groups Housing projects of USA Dept. of Housing & Urban Dev. Need for legislation 1. Corporate law, no enabling statute, scant regulation and little consumer protection 2. Adoption of Uniform Condominium Act (UCA): need for common regulation Model Real Estate Cooperatives Act (1981) Goals: 1. parallel UCA greater consumer protection easier financing

maintenance of historical legal structuring Features: 1. home owners association residential cooperatives (not commodity, marketing, consumer services) 3. essentially residential (industrial, commercial?) C. PLANNED UNIT DEVELOPMENTS What (CLUSTER HOUSING)

multi-unit residential planned community; common facilities; home owners association zoning concept at local level clustering zoning mechanism by local authorities Differences (v. Condominiums) title to units title to common elements (facilities)

served by common area facilities owned and operated by the homeowners association; under commo law without benefit of statutory enablement.

structure of home owners association

home-owners association same functions as condo associations;: derive powers from CCrs recorded at beginning of project

use of units, common facilities restrictions on design, common facilities Need for legislation issues addressed on ad hoc basis parallelism with UCA Uniform Planned Community Act (1980) D. UNIFORM COMMON INTEREST OWNERSHIP ACT (UCIOA) (1982, 1994) Reasons for introduction: confusing uniformity consolidation with preservation of differences relatively simple states wide range of choices
uniformity amongst all three types of multi unit ownership; simply by

consolidating the 3 prior Acts and adding a few generic definitions;n common interest community; section numbering system completely parallel;

VI. REQUIREMENTS: BUILDING AND LOT Building Lot Modern kinds of developments Vacant site condominiums Dockominiums Air space condominiums (lollipop) Parking garages Neon signs PROPIEDAD HORIZONTAL I. INTRODUCTION
no separate property in land and buildings or part of building

superficies solo cedit

desperate need for housing

elephantine, walled cities, World Wars: psychological need

special statutes on strata title

Europe and South America; Puerto Rico (58)United States; NSW: British, British Columbia, Singapore (68), South Africa(71), new Zealand(72), Malaysia (1985) Former Socialist, Middle-East, Islamic, Japan (62), Korea, Maharastra (63).

threefold unity
owner, joint owners, members of management corporation

II. REQUIREMENTS: BUILDING AND LOT Building

Must be a building; permanent, non-combustible materials; more that one unit Walls, ceilings, floors; suitable for human use; toilet, sink and cooking facilities

Lot

Modern kinds of developments Vacant site condominiums (dockominiums) Caravans,

mobile homes, strata title mooring slips: Yachts, jetties

Air space condominiums (pollipop)

New York: lollipop: arispace: reinforced shaft; Airspace above public streets or railway stations to provide blocks of offices;

Parking garages

Commercial structures without any walls; parking spaces in parking garage: clearly demarcated

Neon signs
Stratum need not be cubic space: Comm. units

III. PHASED DEVELOPMENTS single phased developments

first generation statutes: buildings must be sufficiently completed for occupation; if sale before stringent consumer protection measures: escrow; restricts adaptability, cash flow

advantages of phased developments

i. smaller initial outlay; ii cash flow eased; iii adapt to market demand; iv better land utilization; vpurchaser: better facilities, amenities

Mechanisms: UCA: 4 kinds of development rights convertible land

building on undeveloped land

convertible building space

reserve higher floors for later development acc. to market

additional land

extend by later addition of land: further amenities; subdivision

withdrawable land
financial diff. impossible to complete scheme Quid pro quo for flexibility: time-limit; suff. disclosure of physical and legal aspects of project

Consumer protection

IV. FLAT AND COMMON PROPERTY Importance of distinction

I More extensive powers; ii responsibility for maintenance; iii insurance: double insurance

Problem areas 1.Broken windows, intercoms, parlophones 2. Hot water installation

serves only one unit: lotholder

W. Sing.:part of c.p; SA: median line;intercoms:Sing. accessory lot

3. Leaking roof
SA median line: Sing: common property

SHARE VALUE (participation quota, lot entitlement)

rights & obligations acc. to share value

Share value determines Share in common property

Use, proceeds of insurance, reserve fund, in land on term.

Proportionate contribution
Expenses for management, maintenance and repair General meeting

Proportionate value of vote

Formulae employed Equality Relative size

Floor area, cubic area

Israel, small schemes, units of equal size

Which value: market value, when?

Relative value

Developer: just and equitable

Obj. utility: size, components, location, proximity to c.fac. Tested by Commissioner in Sing., Valuer-General in NZ

Criticism Only one formula

3 totally divergent matters: 3 different formulae Service test: frequency of use: lifts, swimming pool, common heating and airconditioning installations

Relative contributions Virtually unalterable

Singapore: unanimolus resolution Periodic reallocations: NSW by Surveyor-General in unreasonably made Alaska: Periodic appraisal due the changing circumstances New highway at back cutting off clear view of the sea, land acquisition of parking spaces

STRATA OWNERSHIP: TRUE OWNERSHIP? Individual ownership of flat

Sing. Subsidiary proprietor; master of his flat, administer, muse and enjoy, alter, decorate, animals, parties, invite hippy friends

Limitations

Nuisance
Excessive noise, smells, overflow of sink; life intolerable Stat. easements: support, shelter; passage: pipes, ducts

Statutory reciprocal easements Bylaws: Duty to repair

Positive duty to keep in good state of repair; flat, fittings, pipes

Outside windows
Part of external wall: no advertisements etc

Balconies

Alterations & additions: consent; no washing-line Dry container

Refuse disposal Animals

Consent of trustees, number controlled 1dog, 2 cats, 11goldf Not between 11pm and 7am

Noise

without sufficient floor covering.

reputation of building pound chillies

Characteristic features Destructible building

Not indestructible building

Structurally interdependent lots

Not individualised group of neighbouring landowners Next to each other, on top of each other

Intensified community life Permanent nature

Until terminated by court or unanimous resolution Landownership. Planning, environmental,peculiar type My flat is my castle, home sweet home

VII. ENFORCEMENT OF OBLIGATIONS Financial obligations:contributions No vote: name and shame Fine: S$ 10,000: Draconian, absentee landl. Small Claims tribunal: cheap & quick

Charge on lot in favour of m.corp.

Priority of registered;

Social obligations: adequately clothed, no offensive language or behaviour underpants, shouting abuse fine (S$ 1000), no vote compulsory sale of flat
Germany, Switzerland, Austria: life unbearable, special resolution, priv sale, public sale

exclusion from possession: Spain, Holland, Denmark: warning,

resolution, court proceedings possession for up to 3 years & family: not affect other ownership rights.

MANAGEMENT Attendance of general meetings

very poor, SA quorum:

over 50 units:20%; within hour Sing.2 in person; SA proxies, some systems: one person, 25% of vote and immediate family; love and charity; high duty of care by council, Germany profess. expensive

Reluctance to be council members

subsidiary owners appointed

Managing agent or professional manager:

How democratic is general meeting? One lot, one vote: one owner, one vote Poll even after result, according to value: loaded Non-proprietors: spouses, mortgagees, lessees, children
(Mandela 16); economic interests, social interests, temperature of pool; when barbeques on the lawn?