CONTRACTING WITH THE BODY CORPORATE OF A SECTIONAL TITLE SCHEME

Abstract

The judgment in Torgos (Pty) Ltd v Body Corporate of Anchors Aweigh (2006 3 SA 369 (W)) (“Torgos”) is of great importance to trustees and bodies corporate of sectional title schemes, and to third parties entering into contracts with the trustees. It is respectfully submitted that the ultimate decision arrived at by the court is correct, but that trustees and third parties may well be confused by the court’s reasoning in coming to that decision. The effect of the judgment is that when the Sectional Titles Act (“the Act”) and rules empower the trustees to bind the body corporate of a sectional title scheme provided certain “preliminaries” are gone through, a third party dealing with the trustees is not obliged to investigate whether those preliminaries have actually been observed but may assume that they have in fact been complied with. Accordingly, the third party may hold the body corporate to a contract entered into by the trustees, even though the “preliminaries” were not met. However, a third party who enters into a contract with the trustees to purchase the body corporate’s right to extend the sectional title scheme cannot assume that the written consents required for the sale in terms of section 25 of the Act have in fact been obtained. Absent the written consents, the sale agreement entered into by the trustees is void. This begs the question: why cannot third parties also assume that the “preliminaries” referred to in section 25 have been observed? Putting it differently, what can third parties assume and what not?