Legal Highlights – Ministry Kicks Off Registration of Sectional Units under the New Sectional Properties Act

The Ministry of Lands and Physical Planning issued a public notice on 7th May 2021 to operationalise the Sectional Properties Act, 2020 that: the Ministry shall no longer register long-term leases over sectional units supported by architectural drawings, with effect from 10th May 2021. The new Act requires the conversion of all long-term leases registered on the basis of architectural drawings and intended to confer ownership over sectional units to be brought into conformity with the Act and the Land Registration Act, 2012 through the registration of georeferenced sectional plans.

  1. The new Act, which repeals and improves on the 1987 Sectional Properties Act, provides for the division of buildings into units to be owned by individual proprietors, the ownership of common property by owners of the units as tenants in common, and the use and management of the units and common property.
  2. The new Act gives effect to Section 5(4) of the Land Registration Act, 2012 by conferring absolute ownership of sectional units through the issuance of certificates of title and lease supported by georeferenced sectional plans.
  3. Previously, holders of long-term leases over sectional units did not enjoy full ownership rights as some of these rights remained with the holder of the mother title to the entire property, many times, to the detriment of the former.
  4. A sectional unit refers to a space that is situated within a building and described in a sectional plan by reference to floors, walls and ceilings within the buildings. Common examples of sectional units include apartments, flats, maisonettes, townhouses, villas, go-downs and office spaces.
  5. The new Act and the Land Registration Act, 2012 require that all sectional plans submitted for registration:
    • be geo-referenced;
    • indicate the parcel number;
    • indicate units’ numbers;
    • indicate approximate floor area of each unit;
    • be signed by the proprietor;
    • be signed and sealed by the Director of Surveys; and
    • clearly indicate the user of the unit.
  6. The process of conversion entails submission of:
    • Sectional plan
    • Original title 
    • Long term lease previously registered
    • Rent apportionment for the unit where applicable
  7. A conversion manual to guide the process has been made available by the Ministry here. However, at the time of writing, the regulations to further operationalise are yet to come into effect.
  8. Once a sectional plan is registered, the original registers shall be closed and new registers opened with respect to each of the units described in the sectional plan.
  9. In addition, on payment of the prescribed fee, in respect of each unit of the sectional property:
    • a certificate of title shall be issued if the property is freehold; or
    • a certificate of lease shall be issued if the property is leasehold and shall include its proportionate share in the common property.
  1. Importantly, owners will not incur additional stamp duty upon conversion if they already paid the requisite stamp duty fees when registering the long-term leases.
  2. Under the Repealed Act, the management company owned the common property. However, under the new Act, the common property is owned by the unit owners as tenants in common through a corporation that will be formed upon registration of a sectional plan.
  3. The owners corporation is not a company for purposes of the Companies Act. 
  4. The reversionary interest is shared equally among the unit owners.
  5. The sectional status of a building may be terminated by unanimous resolution of the Corporation, substantial or total damage to the building, or by compulsory acquisition.
  6. The conversion of all long-term leases registered before the commencement of the new Act on 22 December 2020 is to take place by 22nd December 2022.