PHASED DEVELOPMENTS - WHAT TO WATCH FOR, AND RESTORING VIABILITY Where a sectional title development is to be completed in phases, the developer will reserve the right to extend the scheme - usually by adding further buildings or extending them - per a plan registered in the Deeds Office. Before buying into a sectional title scheme, check for such "rights of extension" - they may impact (whether positively or negatively) on your decision to buy. Full details should be disclosed in the sale agreement, but if you are a layperson and it reads like gobbledygook, get advice on what it all means before you sign. From the developer's point of view, it is important to avoid, wherever possible, the need at a later stage to deviate from the original right of extension. You are obliged to develop "strictly in accordance" with it, unless you can prove to the Court (not just the Deeds Office) that there are "changed circumstances which would make strict compliance impracticable". There is however potentially some good news here - although the legislation doesn't specify what will qualify as "changed circumstances", the High Court recently held that it is not necessary to show a change in "a physical state of affairs". It is sufficient to show that development in accordance with the original sectional plan is no longer economically viable in the light of "changed market conditions". So if your next development phase isn't viable in the current market, take advice - you may be able to modify your right to extend in order to bring it back to viability. Recent Articles for May 2009;
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