ARE TRUSTEES OF THE ESTATES OF OWNERS OF SECTIONAL TITLE UNITS NOT FULLY COVERED BY SECTION 89 OF THE INSOLVENCY ACT?

Abstract

This article highlights differential treatment of trustees when they make application for the clearance certificates, they need to register a transfer of immovable property. It illustrates that trustees of the estates of insolvent owners of sectional titles scheme units who apply for clearance certificates from bodies corporate do not enjoy the benefits provided by section 89 of the Insolvency Act. In comparison, such protection is provided to trustees when the estate is that of an insolvent owner of a property indebted to a municipality. The article argues that the Supreme Court of Appeal (SCA) in various judgments has incorrectly interpreted the law by not fully subjecting bodies corporate to section 89 of the Insolvency Act. The article argues that the time limits regarding protection from payment of charges, fees and levies applicable to trustees in relation to municipalities should be equally applicable to bodies corporate. The article recommends that the legislature must step in and clarify its intention by amending the provisions in the Sectional Titles Act that make provision for bodies corporate to issue clearance certificates.