Section 25 right contributions

The Developer has reserved a Section 25 right to extend the scheme. Does he have to pay anything to the Body Corporate ito this right?

The Developer can reserve a Section 25 right to come back and build more units.  He has to stipulate in this reservation the period for which he reserves this right.  Details of this can be obtained from the Deeds Office.  The first page of the sectional plans normally shows if such a right was reserved.

During the period of the reserved right the Body Corporate must ensure that the Developer makes contributions to the Body Corporate funds.  This contribution is not calculated by PQ as it is not a normal levy for a normal section.  The contributions are related to the costs involved for the area where the Developer wants to extend the scheme.

Section 3 of the STSM Act

  1. (1) A body corporate must perform the functions entrusted to it by or under this Act or the rules, and such functions include—

(d) to require from a developer who is entitled to extend the scheme in terms of a right reserved in section 25(1) of the Sectional Titles Act, to make such reasonable additional contribution to the funds as may be necessary to defray the cost of rates and taxes, insurance and maintenance of the part or parts of the common property affected by the reservation, including a contribution for the provision of electricity and water and other expenses and costs in respect of and attributable to the relevant part or part;