Managing apartments with sectional property titles

By Julius O K’Obado

The current development of residential houses in major urban areas is moving from individual units like bungalows and maisonettes to flats and apartments.

The latter are now coming up even in areas that had been zoned for low-density residential areas like Kileleshwa and Lavington estates in Nairobi.

This is due to rapidly escalating value of land and the ever-rising cost of building materials that make cost of housing far beyond reach of the majority in urban population.

Flats and apartments are advantageous in that several housing units can be put up on a small parcel of land thereby increasing the occupancy density and lowering the prices of the units to affordable levels.

Title registration

Sectional Property Act of 1987 provides for division of buildings into units to be owned by individual proprietors and common property to be owned as tenants in common. It also provides for use and management of the units and common property and for connected purposes.

Registration of Sectional Property Titles is done under Registered Land Act Cap 300 Laws of Kenya. It is only applicable where the titles on which the building is erected are either freehold or leasehold with un-expired term of not less than 45 years. The boundaries of the parcel of land in question must be fixed to standards as per Survey Act Cap 299 of the Laws of Kenya.

Unit management

On registration of the Sectional Property Plan, the register of the parcel described in plan is closed. A separate register for each unit is opened and a title deed issued in respect of each housing unit.

No title deed is issued to common property but upon registration of a Sectional Property Plan, a register is opened for the common property, which acts as a medium for recording such matters as the schedule of unit entitlement, the addresses for service of notices on the body corporate and alterations of by-laws.

Upon registration of a Sectional Property Plan, a corporation is incorporated by the act of registering the Sectional Property Plan and not by filing of any documents with the Registrar of Companies under the Company Act. It has perpetual succession and a common seal and is capable of suing and being sued in its corporate name. The body corporate does not hold the common property beneficially but only as an agent for the proprietors who constitute its ownership.

A company incorporated under the Company Act is not suitable for the management of common services as Registrar of Companies can strike it from the register with serious consequences to the owners of the flats and any financier having a mortgage on the title.

The management of the affairs of the sectional property is the responsibility of the corporation. It elects a board that in turn appoints an institutional manager who must be an accountant, estate agent or advocate.

Exclusive possession

The corporation makes by-laws to provide for control, management and administration of the units, movable and immovable property of the corporation and the common property. These may include:

• Levying contributions in respect of each unit and are payable by the proprietors in share proportional to their unit factors.

• Granting leases to unit owners permitting the owners to exercise exclusive possession in respect of areas of common property.

The owner of a unit holds a negotiable title to his/her own unit while at the same time-shares with other owners the title and cost of operation of common property. The central problem is in the enforcement of the positive obligations of each of the proprietors to maintain their part of the property and to contribute to the cost of maintaining the parts enjoyed in common services.

The writer is a registered and licensed land surveyor