Your ownership of a unit in a scheme immediately makes you a member of the body corporate. A sectional title scheme is a democracy where no one person or small grouping has the power to take minority decisions. There are a number of mechanisms to protect the rights of individual owners.
One such mechanism is the annual general meeting (AGM) where a number of prescribed things happen. Among others, the audited financial statements are tabled, as well as the budget for the ensuing financial year. The term of office of the existing trustees terminates and new trustees are elected. It just makes good sense to take the time and trouble to attend the AGM and influence the affairs of the scheme, of which your unit forms a part.
The body corporate (consisting of all owners) controls, manages and administers a sectional title scheme. The trustees that are holding office are the managers - subject to the Sectional Title Act, the Rules and any restriction imposed and/or any direction given by the owners. They are, as the Paddocks - Sectional Title Survival Manual puts it, the servants of the body corporate, not its masters.
Refer to part VIII of the Sectional Title Act for more information. [Revised 17 May 2010]
The Trustees of our building recently notified the body corporate that a special levy will be imposed for maintenance to the building to the value of 1.2 million Rand. We recieved the notification on the 20th of July which stated that the Special Levy would apply as of the 1st of July. Our portion, R18 251.00 is payable in full by the 31 August or in six monthly insallments plus interest.
The maintenance which they propose to do has never been mentiopned before and was not discussed in the last AGM in August 2008. Walking around the building it is clear that there is rust to the steel window frames, but this is at least 10 years old and I don't believe it can be repaired by scraping & painting. Two years ago the same Trustees oversaw the re-puttying of windows and painting to the building. The contractors did a bad job. They did not scrap the paint and rust off the frames, apply a metal primer before re-puttying nor wait for the putty to dry before painting. As a result within months the putty was cracking and the paint peeling. Several complaints regarding this maintenance were made to the Trustees, but to my knowledge they did nothing about it. Now two years later, with no notice, in the middle of a recession, we are asked to pay an enormous sum, which we can not afford, to maintain the building. Our levies are substantial and were not reduced when the council started charging owners directly for services. Also this building had a good reserve of money in the bank. The Trustees have recently made luxurious improvements to the common property without consulting the body corporate, such as re-tiling, carpeting and painting the entrance to the building & buying a desk and ornaments for it.
My husband and I wrote a letter to the Trustees asking that a special meeting be held to discuss the maintenance. They replied with a lawyers letter saying that their advice to us was to wait for the AGM to meet, but that the work would go ahead in the mean time. We petitioned for a meeting and have more than 25% of the body corporate requesting a SGM which we will deliver to them on Monday.
I would like to know what our rights are? We acknowledge that there is maintenance to be done, but what is the correct process? Should they not stagger the work so that we do not have to pay such a large amount at a time? Many of the owners here are elderly and living on a pension on their own and can not afford the R18 000.00 - R24 000.00. If the Trustees elect the same incompetent company to do the maintenance they did last time we could be in this position again in two years time. Surely in a matter as large as this they should have to call a meeting with the body corporate before making the decision to go ahead? Is it acceptable to incur futher costs for the body corporate by way of a legal letter when asked by a member for a meeting? Another member phoned the chairperson of the Trustees and said that to his knowledge it is not legal to not call a SGM for such a large Special Levy. The Chairperson replied with a veiled threat saying, 'What is legal? You consult with clients from home?' This resident is a psychologist in his seventies who now refuses to ask any futher questions regarding the Special Levy.
I would appreciate any advice or insights as we feel we are in a desperate situation.
Posted by: Robyn Penn | 25 July 2009 at 12:48
I hope you are able to give me some more advice regarding the Special Levy.
I have just received a phone call from the chairman of the trustees. He said that he was phoning as a good neighbour and wanted to know whether it is true that we have a petition calling for a SGM. I said that it was and that the agenda for that meeting was being finalised today before it was delivered to the trustees on tomorrow, Wednesday. He then went on to say that he was wondering if my husband and I were aware that litigation could be taken against anyone seen to be holding up the necessary maintenance if damage to apartments happened once the rains came. He added that he was not threatening me, but was wondering if I was aware of this and that such a case might proceed to the high court where advocates would be necessary and very expensive. He said that he personally would litigate if any damage occurred to his flat due to the maintenance not taking place before the rains. He invited me to his apartment for a coffee to discuss the matter. I answered that we had asked to discuss it and his response was to send a lawyers letter advising us to petition 25% of the body corporate to call for a SGM, which is what we have done. My feeling is that at this stage the discussion will take place at that SGM. He said that an SGM would happen, but that he could not delay the work any longer than he already had. He said that the Body corporate could not cancel the contract already entered into by the trustees and that by calling an SGM we were merely costing the body corporate more money especially since the AGM is due to happen some time in August. He kept repeating that he wanted it noted, for me to accept that he had offered to meet and discuss this matter in his apartment and would I accept that he was doing so in good faith.
What is he up to? I do not trust this man at all. He also mentioned several times that he owns and is involved in many important schemes.
My questions:
Does there need to be 30 days notice for an SGM, or can it be called sooner? (If the work is as urgent as he says, we do not want to delay it, but surely the body corporate has the right to be informed?)
Can he or any other owner sue the body corporate or an individual for gross negligence for delaying the maintenance in order to discuss the proposed work? (No one had former knowledge that it would happen, there has been no mention of this work needing to be done by the trustees, or meeting of the body corporate regarding this maintenance)
Can the work be altered or cancelled if the trustees have already signed an agreement with the contractors?
Who holds the Memorandum of association? (I would like to familiarise myself with the rules governing this scheme).
Posted by: Robyn Penn | 28 July 2009 at 14:56
Just moved into Sectional Title and want to install an armed response alarm system, do I need to get permission ?
Posted by: Leah Bishop | 23 November 2009 at 14:30
Hi there, I just bought a sectional title unit and I have received a copy of the management rules of the Sectional Title Scheme from the managing agent. If I would have known before what it entails to own a sectional title unit, I would have first researched more.
Posted by: Mike | 15 June 2010 at 23:00