Tag Archives: Body Corporate

Property

SECTIONAL TILES: WHAT IS THE ROLE OF THE BODY CORPORATE?

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When it comes to sectional title schemes, there is still widespread misunderstanding of even the basics, starting with the body corporate and how it is established, as well as what its functions and powers are. This misunderstanding often gives rise to many problems and disputes in sectional title schemes which could quite easily have been avoided.

What is a sectional title?

A Sectional Title Development Scheme, usually referred to as a “scheme”, provides for separate ownership of a property, by individuals. These schemes fall under the control of the Sectional Titles Act, which came into effect on 1 June 1988.

When you buy a property that’s part of a scheme, you own the inside of the property i.e. the space contained by the inner walls, ceilings & floors of the unit. You are entitled to paint or decorate or undertake alterations as desired, providing such alterations do not infringe on municipal by-laws.

What is the body corporate?

The Body Corporate is the collective name given to all the owners of units in a scheme. Units usually refers to the townhouses or flats in a development. The body corporate comes into existence as soon as the developer of the scheme transfers a unit to a new owner. This means that all registered owners of units in a scheme are members of the Body Corporate.

  1. The Body Corporate controls and runs the Scheme.
  2. Day-to-day administration of the Scheme is vested in trustees who are appointed by the Body Corporate.
  3. Major decisions regarding the Scheme are made by the Body Corporate, usually at the annual general meeting (AGM), or at a special general meeting (SGM). At these meetings, matters, which affect the Scheme, are discussed, budgets are approved, rules can be changed and trustees are appointed. Each member of a Body Corporate is entitled to vote at these meetings, providing that the member is not in arrears with levy payments or in serious breach of the rules.

The Body Corporate exists to manage and administer the land and buildings in the scheme. This means, that the Body Corporate is required to enforce the legislation and rules in the Sectional Titles Act, the Management Rules and the Conduct Rules of the scheme. Amongst their other duties, the Trustees manage the Body Corporate’s funds, enforce the rules and resolve conflict to the best of their ability.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

References:

http://www.angor.co.za/news/understanding-sectional-title-terminology-body-corporate/

http://www.sectionaltitlecentre.co.za/faqs.aspx

http://www.bizcommunity.com/Article/196/568/161017.html

Housing and property law

DISPUTES WITH BODY CORPORATE: HOMEOWNERS’ REMEDIES

Our office recently dealt with a matter where the trustees of the body corporate of a certain sectional title scheme clamped the wheel of the car of one of its homeowners because he did not park on his allocated parking bay.

Even though the homeowner did not park on his allocated parking bay, he could not understand why his vehicle got clamped for parking outside of his own front porch, when he was in and out of the house during the day. It seemed highly unfair and unreasonable to the homeowner.

It is a truism that every homeowner cannot do as he pleases as this would lead to total disorder in the sectional title scheme, and it is the duty of the trustees of the body corporate to enforce rules on owners and tenants alike. When one buys a property in a sectional title scheme one will more often than not find a provision in the agreement which states that homeowners, inter alia, will abide by the rules of the body corporate.

This begs the question whether or not the homeowner’s hands are tied if the rules were amended by a special decision taken at a general meeting by the trustees of the body corporate.

Remedies available to homeowners and tenants

If there is reason to believe that the trustees of the body corporate of a sectional title scheme have acted ultra vires (outside their powers), homeowners have a choice of two remedies – either arbitration or an interdict.

  1. Arbitration step-by-step

The discontented homeowner could apply for arbitration, the duration of which should not exceed a maximum of 52 days.

In terms of Section 71 of Annexure 8 of the Sectional Title Act 95 of 1986, the purpose of arbitration is not, as some believe, to achieve compliance. The prescribed process requires the discontented homeowner to submit his dispute in writing to the trustees of the body corporate of the sectional title scheme within 14 days of the problem arising, whereafter the trustees will review and attempt to settle the matter. Should the problem still not be resolved, either the homeowner or the trustees of the body corporate can request that the matter be referred for arbitration.

The arbitrator has wide discretion in making a costs award. He may order payment by one party, by more than one jointly, or in specific proportions, depending on the outcome of the arbitration. The arbitrator’s decision may be made an order of the High Court upon application by either party, or a party affected by the arbitration.

  1. Alternative remedy

There is a further remedy available to the homeowner, namely an interdict or any form of urgent or other relief by a court with jurisdiction.

But this line of action has elicited the following warning:

Furthermore, the interdependence of the owners and occupants of units and the unavoidable requisite of harmonious co-existence render an interdict inadequate and indeed improper in the sectional title context. A successful application for an interdict can permanently ruin the harmony of a scheme (LAWSA aw para 238).

In essence, if the rules of your body corporate allow the trustees to clamp your wheel should you disobey the rules, and you have reason to believe that your Body Corporate is acting outside of its powers and/or the rules are unreasonable, you may follow the steps as set out above.

REFERENCED WORK:

See the article “Managing the Unmanageable” by Tertius Maree, published in De Rebus, August 1999.

Also see the article “Arbitration in Sectional Title Disputes” by Tertius Maree, published in De Rebus, August 1998.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

Housing and property law

TRUSTEES OF BODY CORPORATE NOT ALLOWED TO DISCONNECT ELECTRICITY OR WATER SUPPLY TO A SECTION AS A DEBT COLLECTION MEASURE

The default of levy payments is a frequent problem for the trustees of body corporates as well as the managing agent. It is the way in which the defaulting owner is treated and the outstanding debt collected, that will make the difference between a functioning, financially stable sectional title scheme or an impending disaster zone.

In these testing economic times, monthly levy payments are sometimes considered by owners of sectional title sections to be an optional expense in making ends meet on a tight budget. Once an owner has got away with defaulting on one payment, habitual default becomes easy, and more so if the trustees and management agent are slow to react to the failure to pay. The problem is worsened by the fact that the monthly levy is carefully calculated prior to the annual general meeting to be the minimum amount possible, in an attempt to accommodate the owners. However, these small monthly levies could easily accrue over a few months to a significant amount, aggravated by interest and reflected as a substantial outstanding debt.

These non-payers place severe financial restraints on the cash flow of a body corporate which is largely dependent on the timeous monthly payments by all its members to fulfil its monthly obligations to, inter alia, municipalities regarding water and common area electricity usage, security, and general upkeep of the property. If the body corporate does not have large financial reserves on which it can rely in the event of default by its members, the impact of the default can be severe and can cause unnecessary hardship for other owners. There are known instances of special levies raised in order to assist the body corporate in its financial hardship.

Many trustees and managing agents, in order to recover outstanding amounts, revert to taking the law into their own hands by cutting off the water and electricity supply to such members’ sections or units. Some have even passed rules which allow for such actions. Justifications for these actions by trustees and management agents are abundant, but none of these are legally sound or will stand in court.

By withholding the water and/or electricity supply to the section, whether or not it is allowed for in the rules, the trustees and management agent not only disregard the owner’s constitutional rights to access to water as well as the provisions of the electricity act, but also specific stipulations of the Sectional Title Act, Act 95 of 1986 as amended (“the Act”) and confirmed in case law. Such trustees and managing agents expose themselves and the trustees in their personal capacity, to an application by the owner and/or the occupier, against the spoliation of such services, or access with a court order for immediate re-connection. The body corporate or management agent may not interfere with water and electricity services rendered to a section or unit. The penalty will be a cost order, if not granted on a punitive scale, red faces, and a lot to answer to at the next annual general meeting.

The Act clearly stipulates in Section 37(2) that trustees must approach by action any court, including the Magistrate’s court, for recovery of any and all contributions levied under the provision of Section 37(1), which include monthly levies, special levies, interest, and legal costs on attorney and client scale.

The trustees and managing agent have no choice herein. Prompt debt collection action taken against any owner immediately on default, will be the best defence. Therefore the trustees must ensure that the appointed management agent either has a proven track record or a detailed collection policy prior to appointment of such agent. We all know that the wheels of justice turn slowly, and that it can take months for the default judgement to be granted and the warrant issued. By delaying the collection process the outstanding levy account increases exponentially, together with the burden on paying owners.

Therefore, the trustees themselves should keep a watchful eye on monthly payments and ensure that defaulting owners are immediately contacted by the management agent and, if they persist in the default, handed over to competent attorneys for collection. The sooner, the better. The old adage “absentee landlords gather no crops” is fitting, and trustees should ensure that the management agents attend to defaulters speedily and effectively in the interest of both their own property investment and that of the other owners in the sectional title scheme.

For further reading, see the judgement by Blieden J with Serobe AJ concurring in Queensgate Body Corporate vs MJV Claesen delivered on 26 November 1998 in the Witwatersrand Local Division, case number A3076/1998, and case law referred to therein.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

Housing and property law

EXTENDING A SECTIONAL TITLE UNIT: WHAT YOU SHOULD KNOW

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Residents in a Sectional Title Scheme are subject to the rules and regulations of the Body Corporate. These rules and regulations are governed by the Sectional Titles Act.

When you intend to make structural alterations to your unit there is a procedure prescribed by the Act that should be complied with before you start with the alterations. Any alterations that extend the boundaries or floor area of the unit will be seen as an extension.

The legal requirements that must be adhered to are discussed below.

Step One:

The Act stipulates that you should first obtain the consent of the Body Corporate. Usually the trustees will hold a general meeting and the members must pass a special resolution to agree to the alterations. You will require the consent of 75% of the owners who are present at the meeting for the special resolution to be passed. This, however, could be time-consuming as the members have to be notified of the meeting thirty days in advance. Alternatively you can also obtain a special resolution by approaching all the owners individually and obtaining the consent of 75% of all the owners.

Step Two: 

Once the Body Corporate’s consent has been obtained, plans of the extension should be drawn up and approved by the Local Authority.

Step Three:

A Land Surveyor should be appointed to draw up new Sectional Title Plans of the Scheme to incorporate the extension. These plans have to be approved by the Surveyor General.

Step Four: 

Consult with your attorney who will submit the necessary application for the registration of the amended Sectional Title Plan, as well as the noting of the extension of the unit to the Deeds Office.

If the unit is bonded the attorney will have to obtain consent from the mortgagee of the unit.

With the application to the Deeds Office a transfer duty receipt from SARS must be lodged based on the increase in value of the property. It is advisable to obtain two estate agents’ valuations based on the pre- and post-alterations value of the property.

The Surveyor must stipulate on the Sectional Title Plan that there is not a deviation of more than 10 percent in the participation quota of the unit as a result of the alterations. If there is a deviation of more than 10% the attorney must obtain the consent of the mortgagees of each and every unit in the Scheme.

It is very important that Sectional Title owners adhere to the legalities as an omission could cause extensive delays when the property is sold.

References:

Section 24 of the Sectional Titles Act
Sectional Titles, Share Blocks and Time Sharing, Vol 1, Prof CG vd Merwe
Demystifying Sectional Title, M Constas and K Bleijs
Sectional Title on Tap, Vol 1, Tertius Maree
Article by J Paddock
Article by Rob White

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.