Tenga, Ringo & Beatus Malima 'Introducing the Unit Titles Act - The Condominium Property' NHC Board...

8/9/2019 Tenga, Ringo & Beatus Malima 'Introducing the Unit Titles Act - The Condominium Property' NHC Board - 19 March,

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Page 1 of18Introducing the Unit Titles Act NHC Board

19th March, 2010

INTRODUCING THE UNIT TITLES ACT, CAP. 416

The Condominium Property Framework

(by. Dr. R.W. Tenga & Beatus Malima, School of Law, University of Dar Es Salaam)

1. The Concept of Unit Titles and Ownership of Units

1.1. The Concept

The unit titles concept is a form of joint ownership of real

property. It is distinguished from other types of joint or common

ownership because of the three distinct parts that make up the

unit titles. The first part is the exclusive ownership of a single

unit;1 the second part is joint ownership, as tenants in common

with others, of common areas or common property;2 and the

third part is an agreement or scheme among owners of various

units the management and administration of the unit property

(the association to manage the common property).3

In more formal terms, therefore we can posit that unit titles

means the form of ownership of real property created under the

statute (the Unit Titles Act, No. 16/2008); hereinafter referred to

as the Act, and is comprised of units owned individually by one

or more persons together with joint ownership of an undivided

share in the common areas or common property.

The unit titles ownership therefore, is a divided ownership of real

property which occurs when certain portions of a real property

are owned by specific owners (called co-owners) for their use

1 See Section 6(4) and Section 28(1) of the Act2 See section 9(4), and Section 11(2) of the Act3 See Section 35 of the Act


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alone and certain portions of the property are held in co-

ownership by co-owners for their common use.

The unit title owner owns her unit individually and sharesundivided interests in the common areas (e.g. sidewalks,

hallways, pools, clubhouse, storage place etc.) as a tenant in

common with other unit title owners.

Each unit is a real property on its own.4 The owner of that piece

of property therefore has all rights attached to the real property.5

He may acquire, hold and dispose it just like any other person

holding a Granted Right of Occupancy under the Land Act.6

Equally the unit owner is individually responsible for his unit.7

He is free to transfer his unit to whomever he chooses; just as he

is free to purchase it from another holder or from the developer.

The purchaser of the unit title may choose any mode which best

suits him to buy the property. Typically, however, he borrows

money to finance the acquisition of the unit. He grants the

lender a mortgage which is secured by the real property (i.e. the

Unit Title).8 This tells why the unit title ownership is so much

needed especially in a country like Tanzania, where acquisition

of a decent home is a nightmare for the majority.

A unit title owner pays monthly or annually tax bills which are

directly sent to him by the relevant taxing authority in his

4 See Section 6(4) and 28(1) of the Act5 See Section 9(3) and section 28(2) of the Act6 See Section 20(1)(b) and Section 28(1) and (2) of the Act7 See Section 27 of the Act8 See Section 33 of the Act


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individual capacity as the owner of a real property. He is a king

of that castle in person.

1.2. Understanding the Parts of the Unit Property.Three terms, viz, unit, common property and unit association are

crucial in understanding the subject. The Unit is a portion of the

property which is owned by a specific owner or co-owned for

exclusive use by some of the owners.9 The Unity Property is the

total of the units and the entire land making the units.10 This is

owned jointly by all co-owners. The Unit Titles Act, describes the

Unity Property as the property including single building or

several buildings comprising of sections of unified site together

with the land on which they are located and all real rights

existing in their favour.11 The unit property may be in the form of

high rise structures or in rows or terraces, or in buildings in a

cluster form.12

So, the unit property includes the common area or common

property, the common area for restricted use and the units. The

common area or common property is the whole portion of

property that is owned by all owners for their common use.13 The

common area for restricted use means a common area used by

one or several co-owners.14 The ownership of the common areas

of the property are divided into fractions (fractional shares) and

they belong to one or several co-owners.15 Each co-owner holds

9 See Section 3; 6(4); 9(3); 20(1)(b); 28(1), 33 of the Act.10 See section 4(1) of the Act11 See Section 5(1) of the Act.12 See Section 5(2) of the Act.13 Section 3 of the Act14 Ibid15 Section 6(1) of the Act


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an undivided right of ownership in the common areas equal to

the relative size of his fractional share.16

The association refers to the governing entity for the communityand each unit owner is a member of the association.17 The

association is governed by the Management Committee elected

by the members.18 Among the most important functions of the

Management Committee is to appoint the Managing Agent,

whose duty is to manage the units, the movable and immovable

properties of the Association.19

1.3. Compromises and the Common scheme

The benefits of unit title ownership are many. They include a

sharing of maintenance responsibilities and the expenses for

quality recreation facilities. They promote a concept of

community stability and security and provide an organization

with central responsibility for efficient and quality operation of

the property. Along with the benefits, however, there are some

compromises which must be made. This statement well captures

the compromises which unit holders have to make on a daily

basis.

Every man may justly consider his home his castle and

himself as the King thereof; nonetheless his sovereign fiat

to use his property as he pleases must yield, at least in

degree, where ownership is in common. The benefits ofcondominium living and ownership demand no less. The

individual ought not be permitted to disrupt the integrity of

16 Ibid17 Section 35 of the Act18 Section 47(1) of the Act19 Section 49(1) of the Act


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the common scheme and through his desire for change,

however laudable that change might be.20

The overriding goal/principle in the unit title concept is thepromotion of the health, happiness and peace of mind of the

majority of unit owners. Thus, the association has the continual

responsibility to maintaining that delicate balance between the

individual rights of unit owners and preservation of the common

scheme for the benefit of all the owners.

1.4. The Unit and the Unit Owners

The Unit is that portion or part of the condominium property

which is subject to the exclusive ownership. The boundaries and

the description of each unit must be specifically set forth in the

Unit Plan creating the unit property, since the ownership of a unit

entitles the owner to its exclusive use. Once the real property

has been submitted to unit property status, all the individual

units become separate parcels of real property.

The use of the unit must be consistent with the regulations and

restrictions in the Unit Plan, and the association has an

irrevocable right of access to each unit when it is necessary to

maintain, repair, or replace a portion of the common element(s)

or any portion of the unit to be maintained by the association

pursuant to the Unit Plan of the unit property. The association

also has the right of access to each unit when it is necessary to

make emergency repairs in a unit to prevent further damage tocommon elements or to another unit.

20Sterling Village Condominium Inc. vs Breitenbach, 25150.2d 685, (4th DCA,1971)


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When an owner receives title to a unit property, the title also

includes the ownership of an undivided share of the common

elements that are assigned to the unit by the Unit Plan. The unit,

together with its undivided share in common elements, is knownas the unit parcel. A Unit Owner means the owner of a unit

parcel, and title includes ownership of both the unit and a

portion of the common elements assigned to it.

In order for property to be subject to exclusive ownership in a

unit property, it must be created and identified as a unit and it

must have an undivided portion of the common elements

assigned to it. A room or area of the unity property called a unit

but not assigned a percentage of ownership in the common area

has been classified by the courts in America as common area

and its owners claim to exclusive ownership has been

disallowed.21

1.5. Common Areas

The portion of the unit property jointly owned by all of the

owners is defined as common area and it includes all of the

unit property that is not located within the defined boundaries of

the individual units. The property legally described in a unit plan

must be one of two kinds: it must be a unit specifically

described with a percentage of common area ownership

assigned to it, or it will be common area and jointly owned by all

of the unit owners. No portion of the common area is subject toexclusive ownership for so long as it remains a part of the unit

property.

21 Daytona Development Corp. vs. Berquist 308 So.2d 548, 550 (Fla. 2d DCA 1975)


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The common areas are, however subject to exclusive use by a

particular unit or units to the exclusion of others if the unit plan

permits it.22 The association may by special resolution if the by-

laws permit grant a lease to an owner permitting the owner anexclusive use of a part of the common property.23

Common areas set aside for exclusive use by the unit plan are

known as common areas for restricted use and examples

include balconies, patios, storage lockers and assigned parking

spaces.24 Except for these limited common areas, all other

portions of the common areas are for use by all of the unit

owners, although an individual owners use must not hinder or

encroach upon the lawful rights and use by other owners.

In additional to an assignment percentage of the common

elements and the right to use them, each unit also has additional

accessory rights or appurtenances which are inherent with the

ownership of a unit title.

The ownership of the common areas is divided into fractions.

Each fraction belongs to one or several co-owners. Every co-

owner holds undivided right of ownership in the common area

equal to the relative size of his fraction share.25

2. Registration of Unit Titles

2.1. The Unit Plan

Because the Unit is a small portion or a part the Unit Property;

the first step into registering it must be the registration of the

22 Section 11(4) of the Act23 Section 24 of the Act24 Section 6(3) (a),(b) and (c) of the Act25 Section 6(1) of the Act


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Unit Property. The Unity Property cannot be registered unless the

Unit Plan is first presented to the Registrar of the Titles and the

latter has given his consent and registered it.

So, the first step is making an application to the Registrar of

Titles to register the Unit Plan.26 Upon Registration of the Unit

Plan, separate units can be registered and certificates of titles

issued in respect thereof.27

The Unit Plan is a document on basis of which the Unity Property

is registered for unit ownership.28 It indicates the boundaries of

the common property29 and is used as a reference point to

distinguish each unit from the rest of others in the Unity

Property.30 It does so by assigning a specific number or symbol to

each and every unit.

Before registering the Unit Plan the Registrar shall demand two

things. They are the Certificate of a Registered Land Surveyor31

and the Certificate of the Local Authority giving its approval.32 In

case of the existing structure there is a third requirement. That is

the Certificate of a Registered Architect showing that the plan

does correlate with the existing structure.33

2.2. The Certificate of Unit Title

26 See Section 8(1) of the Act27 See Section 9 of the Act28 See Sections 14 and 16 of the Act generally.29 See Section 14(1)(b) of the Act30 See Section 14(1)(c) of the Act31 See Section 15(1)(a) of the Act32 Section 15(1)(b) of the Act33 Section 15(2) of the Act


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On registration of the Unit Plan, different units can be registered

and certificates granted.34 A unit title certificate issued to a

person is deemed to have been issued under the Land

Registration Act [Cap 334 R.E. 2002]

35

and the owner of thatcertificate has all the rights enjoyed by the owner of the Granted

Right of Occupancy.36 He may sell, transfer, lease, charge, or

otherwise deal with that unit in the same manner and form as

the land held under the Land Registration Act.37

The Unit Title Certificate shall indicate the common share of the

common property.38 This shall not be dealt with or disposed by

the unit owner39 unless it is so specifically provided for.40 That is

to say that the Unit Owner can deal with his unit the way he

wants but he cannot do so for any area indicated as the common

area or common share. Why? That share is owned jointly with all

unit owners.41 It is not owned separately. It cannot therefore be

at the discretion of any one, except the association, which

represents the interests of all unit owners.

3. The Transition

Upon completion of the unit property the developer sells the

units or the entire unit property. The developer before doing so is

required to do various things.42 He must deliver the sale

34 Section 8(1)(b) of the Act35 Section 9(2) of the Act36 Section 9(3) of the Act37 Ibid38 Section 9(5) of the Act39 Section 9(6) of the Act40 Section 11(4) of the Act41 Section 11(2) of the Act42 Section 29(1) of the Act


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agreement43 to the purchaser and the written notice indicating

the status of the charge in case of charges.44

Together with the sale agreement the developer must alsodeliver to the purchaser the existing or proposed by laws45; the

existing or proposed management agreement46; the existing or

proposed recreational agreement47; the lease of the common

property48; a certificate of title in respect of the unit or proposed

unit49; any charge or proposed charge which may affect the title

of the unit50 and the Unit Plan51.

If the unit has a charge over it, then the developer is duty bound

to deliver to the purchaser a written notice indicating the

maximum principal amount52; the maximum monthly payment53;

the amortization period54; the grace period55; the prepayment

terms56 and the interest rate or formula57.

The law entitles the purchaser of the unit to rescind the sale

agreement within ten days after the date of its execution.58

However, he cannot rescind the sale agreement if all the

43 Section 29(1)(a) of the Act44 Section 29(2) of the Act45 Section 29(1)(b) of the Act46 Section 29(1)(c) of the Act47 Section 29(1)(d) of the Act48 Section 29(1)(e) of the Act49

Section 29(1)(f) of the Act50 Section 29(1)(g) of the Act51 Section 29(1)(h) of the Act52 Section 29(2)(a) of the Act53 Section 29(2)(b) of the Act54 Section 29(2)(c) of the Act55 Section 29(2)(d) of the Act56 Section 29(2)(e) of the Act57 Section 29(2)(f) of the Act58 Section 29(3) of the Act


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relevant documents were delivered to him ten days before the

execution of the said sale agreement.59

4. Proprietary Rights and Obligations of Co-owners

4.1. The Rights

The Unit Title Ownership vests in the owner certain fundamental

rights.60 But, equally it also obligates the owner with certain

responsibilities. Both these tight and obligations are spelt out in

the Act and in the Associations By-Laws.61

The Unit Owner has the right to use his unit and the common

area for his own needs.62 He has the right to dispose his unit as

and when he wishes as permitted by law.63 He is entitled to

participate in the management of the association64 which

manages the unit property and which by virtue of his unit titles

he is automatically a member of that association. He has the

right to vote and be voted to become a member of the

Associations Governing Committees.65

Where a co-owner suffers any prejudice leading to the diminution

of the value of his unit as a result of carrying out works needed

either for the unit property or one of the unit holders only, that

co-owner is entitled to compensation.66 It is the association if it

59 Section 29(4) of the Act60 See Section 20 of the Act generally.61 Section 19(1) of the Act62 Section 20(1)(a) of the Act63 Section 20(1)(b) of the Act64 Section 20(1)(c) of the Act65 Section 20(1)(d) of the Act66 Section 20(5) of the Act


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ordered the carrying out of the work or the person who ordered

such work.67

The owner of the common property and each unit owners havethe right of support, shelter and protection, free passage of

water, sewage, drainage, gas, electricity, use of light and any

other services.68 They also have the right of easements.69

4.2. The Obligations

The first and most important obligation is to observe the

associations by laws.70 The associations by-laws binds each and

every owner71 since the law deems them as covenants among

the unit owners to observe and perform all the provisions of the

said by laws.72

Each co-owner is obliged to contribute the costs of maintaining

and operating the unit property.73 The co-owners who use the

common areas for restricted use have the obligation to

contribute the costs resulting from such use of those portions.74

Further every owner is bound not to interfere with the carrying

out of works on the unit property or on a specific unit title.75

5. Disposition of the Unit

There are many ways in which a Unit Title can be transferred to

another person. The Unit Titles Act does not create new

67 Ibid68 Section 21 of the Act69 Section 22, 23 and 25 of the Act70 Section 20(2)(a) and 50(1) of the Act71 Section 50(5) of the Act72 Section 50(6) of the Act73 Section 20(2)(b) of the Act74 Section 20(3)75 Section 20(4) of the Act


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dispositions modalities or abolish the already existing once. The

statute has simply adopted the existing dispositions under the

land Act.

5.1. Sale of Units

As already alluded to each unit of the property constitutes a

distinct object of real property and may be the subject of

disposition by the owner in whole or in part.76 According to the

framework of the Act, there are two ways of selling the units.

First is the sale by the developer77 to any interested person and

second is the sale by the unit owner78 to another person.

In mode under which the unit will be sold the law demands only

that the seller must provide sufficient information to the

prospective buyer as the worthiness of the property he is seeking

to purchase. That is the import of elaborate conditions of sell as

provided for in the statute.79

5.2. Leasing of the Unit

The law entitles the owner of a unit to lease it to another

person.80 The owner is required within a period of seven days

after the tenant having taken the lease of the unit to issue the

association a notice in writing stating the name of the tenant

occupying the unit and other particulars as may be required by

the by-laws.81

76 Sections 6(4); 9(4); 20(1)(b); 28; 33 and 80(1) of the Act.77 Section 29(1) of the Act78Section 30(1) of the Act79 See specifically sections 29(1); 29(2) and 30(1) of the Act80 Section 28(2) of the Act81 Section 31(2)


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The Association may also require the owner to pay to; and

maintain with the association a deposit which the association

may use for; repair or replacement of the property of the

Association; and maintenance, repair or replacement of anyproperty which is subject to a lease granted to the owner of the

unit under the Act which is damaged destroyed, lost or removed

as the case may be by the person occupying it.82

In a period of seven days after the tenant has ceased to rent the

unit the owner must give the Association a notice in writing

stating that his unit is no longer rented.83 In such a case the

Association shall within 20 days after receiving such a written

notice regarding such cessation of the lease, return the deposit

to the owner.84 In case it had applied the deposit to one of the

intended purposes it will produce to the owner a statement of

account for such expenditure and the remaining balance.85

5.3. Mortgage of a Unit

The owner of a unit can mortgage his unit in accordance with the

provisions of the Land Act.86 That the mortgagor and the

mortgagee are bound to adhere to all the procedures as provided

for under the Land Act. The statute however has put in place

good mechanism to protect the mortgagee.87

Agreements for the benefit of mortgagees may be included in

the by law, in which case, they shall constitute contractual

obligations of the Association toward any present or future

82 Section 31(1)(b)83 Section 31(3)84 Section 31(4)(a)85 Section 31(4)(b)86 Section 3387 Section 34 of the Act


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mortgagee holding a mortgage on any unit.88 Upon acquiring

ownership of a unit through enforcement of its rights under a

mortgage, a mortgagee shall succeed to all rights and

obligations of a co-owner.

89

6. Management of the Unit Property

6.1. The Unit Association

This is a very powerful entity. Every Unit Property has a unit

association. This body has one overriding function. That is to

represent the interests of all unit holders. In so doing it manages

the unit property for the benefit of all.

Every member of the unit property is a member of the

association. If a unit, however, is owned by two or more persons

whether as joint tenants or co-owners, such owners will seek one

person among them who will be their representative in the

association.90

The association is created by the statute and is given a status of

a body corporate,91 able to sue and to be sued in its own

capacity.92 Its functions are many.93 They include management of

the common property,94 establishment and maintenance of a

fund for administration and management of the unit property,95

to ensure that all insurance policies in respect of the property are

88 Section 34(2),(3) of the Act89 Ibid90 Sections 38 and 39 of the Act91 Section 35(1) of the Act92 Section 36(1)(c) of the Act93 Section 40(1) of the Act94 Section 40(1)(a), (b) of the Act95 Section 40(1)(c), (d) of the Act


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in place,96 to ensure that all requirements of the local authority

are met,97 to provide and submit new plans when required98 and

to ensure that the lease under which the land is held is

enforceable.

99

The association is also particularly charged with the

responsibility of enforcing its By Laws.100 Further the association

is tasked with the duty to fully control, manage and administer

the movable and immovable properties of the common

property.101

The association has the powers to invest the funds available to it

if not immediately required if and only if the by-laws allow the

association to take such a course of action.102 It may give

approval for any lease, transfer or grant of easement affecting

the common property.103

Each member of the association has voting rights proportional to

his unit factor.104 A unit factor is the proportional share of a

common area as determined by the ownership of the individual

units in the unity property.105 The larger the unit factor the bigger

voting rights share.

6.2. Management Committee

96 Section 40(1)(e),(f),(g), (h) and (i) of the Act97

Section 40(1)(j) of the Act98 Section 40(1)(k) of the Act99 Section 40(1)(l) of the Act100 Section 40(2) of the Act101 Ibid

102 Section 41 of the Act103 Section 42(1)(3) of the Act104 Section 44(1) of the Act105 Section 3 of the Act, cf. the fractional share, see also section 6(1) and (2) of the Act


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Each association is required by law to have the Management

Committee. It is established by the statute.106 Among the

functions of the Committee is to appoint a Managing Agent

whose task is to manage the units, the movable and immovableproperties of the association.107 It is the intention of the

Parliament that the Managing Agent be a professional person.108

The Committee is required to call or convene an annual general

meeting of the owners once in each year,109 approve resolutions

which were properly passed,110 and to hear and determine

complaints from aggrieved members of the Association.

7. Disputes Resolution

The statute requires that any disputes arising in between the

members of the association then the same must first be referred

to mediation. In that respect it is the association which is vested

with jurisdiction to mediate the conflicting parties.111 As already

intimated the Committee has the powers to hear and determine

the complaint referred to it by the aggrieved members of the

association.112

When mediation fails then the parties are required to file their

dispute to the High Court Land Division.113 If, however, there is

no High Court, Land Division for the determination of the dispute

106 Section 47(1) of the Act107 Section 49(1) of the Act108 Section 49(2) of the Act109 Section 48(1) of the Act110 Section 42(5) of the Act111 Section 69 of the Act112 Section 40(6) of the Act113 Section 70 of the Act


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the parties can file his dispute to the District Land and Housing

Tribunal.114

8. Termination of Unit Status The question is what happens after the unit status has been

terminated? The answer is that upon termination of the unit

status, the unit owners become entitled to the common property

as tenants in common in shares proportional to their unit

factor.115 That happens, however, upon registration of their

respective interests.116

The unit owners will be required to seek registration of the

common property to the Registrar.117 Upon such application

being made the Registrar shall issue title for that common

property.118

After the application is made for issuance of new titles the

Registrar will cancel the ownership register for each unit in the

plan119; cancel the titles to each unit in the plan120; establish an

ownership register for the common property121; and issue in the

names of the owners new titles.122

114

Ibid115 Section 74(2) of the Act116 Ibid117 Section 74(3) of the Act118 Ibid119 Section 74(4)(a) of the Act120 Section 74(4)(b) of the Act121 Section 74(4)(c) of the Act122 Section 74(4)(d) of the Act

Tenga, Ringo & Beatus Malima 'Introducing the Unit Titles Act - The Condominium Property' NHC Board...

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Transcript of Tenga, Ringo & Beatus Malima 'Introducing the Unit Titles Act - The Condominium Property' NHC Board...