What’s a condominium?
The Condominium Property Act, 2001, defines condominium to mean a system of separate ownership of individual units in a multiple-unit building, the individual units of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of those units.
Legal Ownership of units.
Once the Developer presents (before the Registrar of Titles), an application for registration of a condominium plan, the Registrar closes the part of the Register which described that parcel of land and opens (creates) Titles for each unit in the condominium plan. So, each owner is entitled to a Title in respect of the unit which he or she purchased.
Transfer of Title
The Titles are usually issued when they are still in the Developer’s name and it is up to the unit owner to process transfer of the unit into their name. The Developer will provide the unit owner with documents necessary to effect transfer. These usually include: –
- The Original Title to the unit,
- Duly signed transfer form,
- Extracts from the Company’s Memorandum and Articles of Association reflecting the business which the Company (Developer) is engaged in,
- A copy of the Developer’s Certificate of Incorporation (as proof of legal existence of the Developer),
- A copy of the resolution which gave the Developer the mandate to construct and sell condominium units on the given parcel of land,
- A copy of the National Identity Card and a passport photo of the Director who executes the transfer form, and,
- A copy of the Practicing Certificate of the witnessing Advocate.
The unit owner will then pay stamp duty (1.5% of the Purchase Price) and other fees as may be advised by the Registrar of Titles or by an Advocate.
Does the Developer remain as the owner of the land on which the condominium stands?
No. Once all units are sold and fully paid for, the Developer loses legal interest in the property. The individual Units are owned solely by the people who bought them while the common areas are owned by the Condominium Corporation. The Corporation consists of persons who own units in a given Condominium project. S.20 (3) of the Act.
Do the unit owners on the ground floor have a right to sell or in anyway carry out transactions in respect of the parcel on which the condominium development stands?
Absolutely no. The unit owners on the ground floors only own their units and only have a share in the common property and therefore have not right whatsoever to carry out transactions in relation to the land/property.
Can I sell my unit or use it as security in acquisition of a loan?
Definitely yes. A unit owner has the right to sell the unit to another person and also to use the property as collateral in acquisition of a loan from the Bank.
Am I allowed to use the amenities on the premises even if my unit is on the topmost floor?
Yes, you being an owner of a unit comprised in the said condominium development, have a share in the common areas thereby having the right to utilize all available amenities just as the owners on the ground floor.
If I bought my unit for residential purposes, am I allowed to use it for something else in future?
Yes, a unit owner may change use of the unit but only with the approval of the corporation and the planning and local authorities. See S.9 of the Act.
This in essence, means that before a unit owner modifies their unit for another purpose, they have to seek the approval of the corporation and the local authorities
And what is a condominium corporation?
A corporation is a legal entity consisting of persons who own condominium units in a given condominium development (project). It is registered with the Ministry of Lands by the Owners or their Manager. After registration, the corporation becomes a legal entity and it has the right to sue and it can also be sued.
Every corporation, as by law, is supposed to have a Management Board. The Board is the decision-making body of the corporation. It should be noted, however, that all decisions must be made in consultation with the Corporation (unit owners).
Among other functions, a corporation has the legal mandate to manage the common property, to keep the property in a state of good repair, to manage the funds that come to it from the owners and to determine the condominium fees payable by the owners.
Please see sections 20 – 26 of the Condominium Property Act, 2001 for more information on the corporation and its rights and liabilities.
Why do I have to pay a condominium fee?
This money is used to cater for things that are used in common for example, security, garbage collection and general sanitation, common water expenses, common electricity expenses, maintenance of the various amenities of a given development, etc. You might want to note, also, that the corporation may penalize you (in accordance with the corporation rules) if you do not pay the set condominium fee.
In conclusion
Owning Title to a condominium unit is just as good as having and owning a piece of land. You can transfer your interest in that unit to another person, you can even use it as security to secure a loan from the Bank.
Article by KUGUMIKIRIZA JEMIMAH – LEGAL OFFICER, FAKHRUDDIN PROPERTIES LIMITED
