If you plan on moving into a sectional title complex, or you already find yourself in one, it’s vital for you to understand how exactly sectional titles work.
Living in a sectional title complex has its benefits – you have an added layer of security, you often get to enjoy a pool and other facilities without having to worry about the upkeep, and costs for general maintenance such as painting outside walls, paving and roof repairs are shared. However, the sectional title model could also turn awry, with Bodies Corporate sometimes abusing their power to turn an otherwise idyllic complex into a nightmare of clashing interests.
If you plan on moving into a sectional title complex, or you already find yourself in one, it’s vital for you to understand how exactly sectional titles work. Who has a say in decisions being made? How much power does the chairperson of a body corporate truly have? And what fees can be legally charged?
Sectional Title Explained
Sectional title means you own your unit (be it an apartment, townhouse or free-standing home) and everything contained within its walls. Any adjoining structures such as a walled-in garden or garage is for your exclusive use, but you don’t own the space. You also have shared ownership of the common property which includes driveways and roads within the complex, play areas, pools, security services, a clubhouse, gardens, braai facilities and any other amenities on the property.
The Body Corporate
If you own a unit within a complex, you automatically form part of the Body Corporate. The Body Corporate is responsible for all decisions relating to the management of the complex. These decisions are usually taken by means of a voting process at either an Annual General Meeting (AGM) or a Special General Meeting (SGM). All decisions must be discussed at these meetings before anything can be put into action. Anything which affects the complex as a whole, such as budgets, general rules and general management of day-to-day tasks, are discussed and voted on by the Body Corporate. Each member of the Body Corporate is entitled to vote at these meetings (provided that member is not in arrears with levy payments or in serious breach of complex rules).
The Trustees are members of the Body Corporate who live in the complex. They are elected by the Body Corporate to manage finances, manage staff and run day-to-day functions such as gardening and cleaning services. The Trustees cannot make any decisions or changes without the Body Corporate’s approval.
Whenever you move into a sectional title property, you have to sign an agreement stating you understand and will abide by the complex’s conduct rules. The rules cover everything from how many pets you’re allowed to have, when you can make alterations to your unit, how and where to park your car, processes to follow when hosting guests, among other stipulations. Should the conduct rules need to be changed, an SGM must be held to discuss the proposed changes and allow tenants to vote.
Each complex must also submit management rules which stipulate how trustees are appointed, when and how often general meetings must be held, the voting process, auditing and accounting processes to be followed as well as any other admin-type details relating to the overall management of the complex.
What Should I Pay?
By living in a sectional title complex, you also agree to pay a set monthly amount in the form of levies which go toward the overall maintenance of the complex. Levies cover the following:
- Water and electricity
- Managing agent fees
- Insurance premiums to cover the common property
- Repairs and maintenance such as gardening, painting and roof repairs
- Wages and salaries paid toward the cleaners, gardeners and other maintenance staff (if not handled by the managing agent)
- Security (if the complex has private security)
I’m Being Charged A Special Levy
By law, all Bodies Corporate must have a reserve fund to cover any unforeseen expenses such as serious structural damages or emergency repairs and maintenance needs. However, in some cases, the reserve funds cannot cover the total amount needed for repairs. In this case, a special levy is added to your monthly levy. A special levy can ONLY be implemented in cases of emergency. Wanting to prettify the paving or gardens is not an emergency. A special levy can also not be charged for an indefinite amount of time. Once the major repairs have been done, the special levy falls away.
As a resident of the complex, you are entitled to view the complex’s financial statements at any time.
If you wish to dispute a decision made by the trustees, you can contact the Community Schemes Ombud Service (CSOS).
Sources: CSOS | Sectional Titles Act
Source: Carte Blanche
Note: This article refers to residential sectional title complexes but the same applies to commercial and industrial property – industrial parks, business parks and office blocks.
There is a growing trend of mixed-use developments that consist of retail, offices and residential components. Balancing the different interests and needs of owners of commercial and residential units in these developments is not easy.
The article states that bodies corporate sometimes abuse power, when it is, in fact, sectional title trustees that sometimes abuse their power.
The other major problem is when trustees don’t make decisions and don’t provide the leadership required for a managing agent to properly fulfil its mandate.
Instead of taking responsibility, trustees are usually the first to blame the managing agent when things start to go wrong.
De La Porte Property Group