The Role of Developers in Sectional Title Developments
The rapid growth of sectional title developments in Zimbabwe has opened the door for developers to explore new opportunities in property development and to reap considerable profits in the expanded real estate market. Increased security, affordability and the communal lifestyle are all alluring aspects when potential buyers consider sectional title properties. This more so in light of the densification policy in the provision of housing in the country.
Key to the success of sectional title developments however, is the developer who plays an essential role from the onset of a new development. In practice, prospective developers are usually businessmen without technical knowledge of managing a sectional title development project. Invariably, they require the assistance of experts such as attorneys, conveyancers, land surveyors, town planners, civil engineers, architects and building contractors at various stages of sectional title developments. In Zimbabwe the absence of specific sectional title legislation has seen a rise in developer abuses and exposed a lack of protection for buyers and sectional title owners against malpractices.
This article seeks to explore the role of the developer in the initial stages of managing a sectional title development project. The article also identifies challenges that occur in implementing sectional title development projects, some of which are due to the absence of specific legislation regulating the area. The article also provides ways in which these challenges can be overcome.
What is a Sectional Title Development?
The definition of a sectional title unit is a property in an undivided share of a common property. These units could be townhouses, flats or apartments, and duet houses. Examples of such developments in Harare include townhouses in the Newlands area, developments in Arlington Estate, Pokugara Estate, Madokero Estates and Mabvazuva Estate. In other cities are King’s City in Bulawayo and the Victoria Falls Estate in Victoria Falls.
In the new-built property market, developers have become increasingly creative in the types of developments they design and build in order to attract buyers and investors at different income levels.
Identification of Land
The identification and acquisition of a suitable location, although seemingly a straightforward process, may be fraught with challenges. It is imperative that the suitability of the property is assessed before a purchase decision is made, to ensure that zoning and sectional title development proposals are in line with the town planning scheme of the municipal office in that area. There is also need to make sure that the site is close to bulk infrastructure services required for the sectional title development such as bulk water, sewer treatment facilities and roads infrastructure. Where these are not available, the developer will have to budget for putting them in place.
The Developer’s Role
The developer plays an indispensable role in the establishment of a sectional title development project. After the land has been identified and acquired, the developer must apply to the local authority or municipal office for approval of the proposed sectional title development project. It is unlawful for the developer to bypass the local authority by firstly, instructing an architect or land surveyor to inspect the property without obtaining prior notification of any inconsistencies with applicable town planning schemes and building regulations. If the sectional title development project is compliant, the local authority will issue a compliance certificate, which certificate is the developer’s license to begin engaging architects and land surveyors.
The centralised nature and role of the local authorities does however have its own shortcomings which are evident in excessive bureaucracy and delays. By ensuring that all the necessary processes are followed and complied with, a developer plans for and avoids, in the long-term, unnecessary expenditure and increase in the price of units due to non-compliance, which would affect the marketability of the sectional title development adversely.
In Zimbabwe, no sectional title development can legally take place on land without first being approved by the local planning authorities through the issuance of a development permit. In complying with the laws and regulations, elements of both civil infrastructure and property development are applicable and hence the consideration of the governing legislative framework being the Regional, Town and Country Planning Act (Chapter 29:12), Urban Councils Act (Chapter 29:15) and the Council by-laws.
By ensuring strict compliance with the above mentioned statutes, a developer navigates an otherwise unregulated area of law and ensures the lawfulness and sustainability of the sectional title developments created. Also, the positive obligation placed on the property developer to acquire a development permit ensures that all civil infrastructure is designed, constructed and inspected in the manner prescribed by law.
Development permits can be issued in the form of either building plan approvals or special consent. In the case of residential developments, the land development process involves the design of a layout plan which is prepared in terms of section 40 of the Regional Town and Country Planning Act (RTCPA) if it is private land or section43 if it is public land.
Development permits in Zimbabwe may also be in the context of applications for special consent which is provided for under section 26(3) of the RTCPA where the applicant seeks to undertake a development that is not normally permitted in a zone. The application for special consent goes through the same process as that for a subdivision permit, with the additional requirement of placing an advertisement by the applicant in the newspaper.
If the developer complies with these requirements, he will receive a compliance certificate, which certificate makes it possible to legally transfer ownership to a purchaser when the land is sold on to third parties.
Building Plan Approvals
After preparation of the layout plan in terms of RTCPA, the application is lodged with the appropriate local planning authority which can either be an urban council, in the case of urban areas, or the Department of Physical Planning in the case of rural areas. This application is then processed by the local planning authority and determined within a period of four months which is however rarely the case. If the application is granted, the applicant is then issued with a subdivision permit which allows him to proceed to the next stage in the land development cycle.
Registration of Sectional Title Development
As a final step in establishing the sectional title development, the developer must apply to the Deed’s Office for the registration of the sectional title plan and the opening of a sectional title register. After registration, the documents that accompany the application will be held at the Deeds Office and will be open to the public for inspection. Upon registration, the land and buildings comprised in the sectional title development shall be deemed to be divided into sections and common property in accordance with the sectional plan. The subsequent alienation, mortgage or lease of these units may then be registered.
Climate Change and Environmental Management
There are problems that come with sectional title developments. There are some developments that have taken place on environmentally sensitive areas such as wetlands, regardless of the legal provisions that are set out against these practices. In Harare, cases in point include the Long Cheng Plaza and the Defence Forces College which were both developed on wetlands.
Environmental management and climate change related issues in Zimbabwe fall under the Ministry of Environment, Climate, Tourism and Hospitality Industry. The Environmental Management Agency established through the Environmental Management Act (20:27) is mandated to ensure that the natural environment is protected through the preparation of environmental plans.
The principles of good corporate governance must apply to corporate structures such as trusts and private companies where these have been set up to run sectional title development projects. These structures do not operate independently from their stakeholders, and should therefore implement principles of good corporate governance in their operations, regardless of size. Fundamental principles include, transparent stakeholder engagement, accountability, responsible leadership, sound ethical foundations, the governance of risk, compliance with laws and regulations, good stakeholder relations and sustainable organizational performance.
The problem with many sectional title developments is that the structures are not managed professionally, and members are reluctant to be involved in the leadership and management thereof. Being a trustee is often seen as a “thankless job” which is usually done for little or no remuneration.
The ever-increasing demand for sectional title buildings highlights the crucial role of developers in the establishment and management of sectional title development projects.
As demonstrated above, the developer’s role in the initial stages of carrying out such a project is crucial to ensure that all certificates, permits and plans which require approval from various departments of the local authorities are secured prior to any commencement of works. Once these are in place, the developer then engages the various experts to work on the sectional title development project. Developers must also be weary of the environmental challenges that may encounter on some projects, and ensure that these are brought to the attention of the Environmental Management Agency.
Developers should make an effort to satisfy the special needs of each individual project to create a sound management structure and to avoid future financial crises and internal disputes. It is only then that developers and the public truly can exploit the numerous opportunities inherent in the sectional title industry.