What is Sectional Title?
A Sectional Title Development Scheme (usually referred to as a “SCHEME”) is a community scheme in which individuals own their properties exclusively and also own a share in property owned by all the owners together.
These schemes are managed in terms of the Sectional Title Schemes Management Act (STSMA). The Sectional Titles Act (STA) also applies when changes to the scheme requiring the approval of the Surveyor General and registration by the Registrar of Deeds are made.
The Community Schemes Ombud Service Act (CSOSA) makes provision for dispute resolution in community schemes and has some application to aspects of their administrative and financial management.
Who is the Body Corporate?
The body corporate is the collective name given to all the owners of units in a scheme. It comes into existence as soon as the developer of the scheme transfers a unit to someone else. All registered owners of units in the scheme are members of the body corporate, but the body corporate exists as a legal entity independently of its members.
The body corporate controls and runs the scheme. Day-to-day administration of the scheme is vested in TRUSTEES who are appointed by the body corporate. 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 that affect the scheme are discussed, the 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 where an order of the Court or CSOS in this regard has been granted. Members in default can only vote on special and unanimous resolutions.
An individual member’s voting power is governed by the member’s percentage ownership of the common property. This percentage is known as the PARTICIPATION QUOTA and referred to as the value of the vote.
What is Common Property?
The Common Property is all the parts of a scheme that are not sections. Roofs, driveways, gardens, swimming pools, corridors, lifts and entrance foyers are good examples of common property. As mentioned above, the common property is owned in shares by all the owners of sections but some parts of the common property may be designated as Exclusive Use Areas (EUAs).
What Are Levies?
The costs incurred by the body corporate in running a scheme have to be paid by the owners. These costs include:
- Water and electricity used on the Common Property
- Insurance premiums for the Common Property
- Repairs and maintenance of the Common Property
- Wages and salaries of the cleaners and other staff
- Security
- Administration costs such as bank charges, legal fees, hiring meeting venues, etc.
These costs are paid by individual owners in the form of a monthly levy, calculated in accordance with the participation quota for their unit.
The body corporate must charge owners who hold exclusive use rights an additional contribution to cover its costs with respect to that specific part of the common property.
What are Managing Agents?
Managing and administering a Scheme, particularly a large Scheme, is complicated and time consuming. Occasionally, the Body Corporate and Trustees undertake the entire task. Unless the Body Corporate is unusually well endowed with specialised knowledge and talents, this is seldom successful. Most Bodies Corporate decide to appoint MANAGING AGENTS, usually a company or close corporation that specialises in this aspect of Sectional Title administration. The Managing Agents collect the monthly levies and all other moneys due by owners to the Body Corporate. They keep the books, recover unpaid debts, prepare the annual budgets, arrange for quotations for repairs and maintenance, send out notices and generally assist the Trustees with the numerous time consuming tasks that arise in administering a Scheme.
A good Managing Agent can save the Body Corporate a lot of time, trouble and expense.
Who is responsible for the replacement of Geysers?
It is an owner's responsibility to repair and maintain the geyser that serves his/her section. Even if a 'hot water installation' is part of the common property, and insured by the body corporate, it must be maintained by those owners who benefit from it.
