Sectional Title Living

Don't whinge ... act!

There are a number of avenues/options available to owners, to address/resolve issues/differences/disputes:

1. Ask to attend and speak at a meeting of the trustees (Management Rule 15[5]).
2. Put the issue in writing and send it to the domicilium citandi et executandi of the body corporate (The first step of resolving dispputes through arbitration - Managament Rule 70[1]).
3. Speak to fellow owners, if 25% ownership -- in number and value, based on the respective participation quotas -- make a request the trustees are obliged to call a special general meeting (Management Rule 53).
4. If the trustees fail to call the SGM that has been requested by 25% of the ownership, then the 25% shall be entitled to call the meeting (Management Rule 53), but ensure it is done in accordance with the Management Rule 54 (1 & 7 in particular).
5. If 25% of ownership want to remove a trustee or trustees from office, follow Management Rule 13 (e) & 53, but make sure the convening notice specify the intention to vote upon the removal of the trustee/s from office.
6. If 25% of ownership want to remove the chairperson from office, follow Management Rule 19 & 53, but make sure the convening notice specify the intention to vote upon the removal of the chairperson from office.
7. Follow Management Rule 71 with regard to a dispute between yourself as owner and another owner or the body corporate, to resolve the dispute by arbitration

 Revised 15 June 2010

A democracy with preserving imperatives

A sectional scheme is a democracy with legal imperatives to preserve individual rights:

• Trustees are nominated (not self appointed) and must agree to their nomination
• Trustees are elected by a properly constituted general meeting with a prescribed quorum of owners (and the owners that elect them, assign the authority to them to manage the scheme)
• Trustees need to follow prescribed procedures to call meetings and must be a quorum, if not the meeting must be postponed to the next day and those present may then meet, but must at least be two
• If the number of trustees fall below the number necessary to form a quorum the remaining trustees must co-opt or call a meeting of owners to elect more trustees
• For a general meeting of owners certain prescribed procedures must be adhered to
• If a prescribed quorum is not present half an hour after the meeting was due to start the meeting is adjourned for 7 days and the owners then present may proceed with the meeting

Technically it is impossible that any one person can autocratically rule a scheme. However, it seems, few owners in sectional schemes grasps the basics of what sectional title ownership is about.

Alegations of unmandated spending vs ignorance?

 

It appears as if the report above published in the Roodepoort Record of 20 March 2009 reflects a fair amount of ignorance. The Sectional Title Act is intended to protect the rights of owners, not tenants. A tenant is a person or group that rents, occupies, inhabits or hold or possession of land, house, flat or office; that belongs to another; for a period of time; usually for rent. All the owners of a sectional title scheme, together forms the body corporate of the scheme. The body corporate elects trustees at the annual general meeting (AGM), which is a statutory prerequisite. At the AGM the owners may, through majority vote, place restrictions on the owners or give directives. The owners effectively transfer their responsibility to manage the collective affairs to the trustees.

Any trustee may at any time call a meeting of the trustees, but must give proper notice. Any owner may attend the meeting of trustees to speak, but may not vote. If 25% of the owners were to request a special general meeting (SGM) of the body corporate the trustees are obliged to arrange such. If the trustees fail the 25% may proceed, but must adhere to prescribed procedure to arrange the meeting.

The building of parking spaces represents an improvement—which is probably a luxury improvement—which requires both a unanimous resolution by the owners and the necessary approval of the authorities.

Owners should familiarise themselves with the relevant parts of the Sectional Title Act, the relevant Regulations, but most importantly the Management & Conduct Rules of scheme(s) within which they own units. Owners should further attend the meeting of their scheme and exercise their voting power. A sectional scheme is governed on democratic principles. Disputes are determined through arbitration, not necessary civil litigation.

 

Revised 17 May 2010

Is that lady allowed to chase us off the lawn?

Some kids of our scheme approached me to find out if the owner of the unit adjacent to a piece of common property lawn may forbid them to play on this lawn.

I answered with Section 44(1)(d)&(e) of the Sectional Titles Act (Act no 95 of 1986) in mind (emphasis added): An owner shall:

· use and enjoy the common property in such a manner as not unreasonably to interfere with the use and enjoyment thereof by other owners or other persons lawfully on the premises;

· not use his section or exclusive use area, or permit it to be used, in such a manner or for such purpose as shall cause a nuisance to any occupier of a section;

The children are lawfully on the premises, either as children or grand children of owners or tenants and may therefore play on the common property lawn.

Children playing make noise, it is in their nature. Does the owner of the unit have a right to peace and quiet? The key to this issue is the meaning of what unreasonable interference entail. Children have a right to be children and that includes playing. It is my position that the owner may not forbid the children to play in front of her unit on the common property grass, but may negotiate reasonable times with the parents of the children—that is an element of the democracy of sectional title ownership. The parents in turn have the responsibility to honour the agreement and make sure their children adhere to the times.

To add insult to injury, the owner of the unit in question has a little dog that barks when the kids play on the lawn. It is my position that the right to play of the kids should enjoy preference over the doggie. The owner must move the dog to a room where the dog would not have reason to bark at the kids when they play during their agreed time.

The children had been playing on a bigger piece of lawn, which took a bit of a hammering. The trustees wish to restore the lawn and made a request to the kids not to play on it while restoration is in progress. That is why the kids reverted to the lawn in question (smaller).

Balancing the interests and needs of all involved in a sectional scheme is never easy.

 

Revised 17 May 2010

New era in Sectional Title in SA

In line with the strategy of the Cabinet (of South African government), all housing-related legislation currently administered by other government departments is being brought under one roof, namely the Department of Human Settlements.

At present the Sectional Titles Act (No 95 of 1986) resorts under the Department of Rural Development and Land Reform, which primarily deals with registration and survey issues. However, the mandate of this department does not include dealing with problems related to scheme governance or with complaints from the public. Towards this end, the Sectional Titles Schemes Management Bill, 2009 has been gazetted in order to move the management provisions from the said act and incorporate such in a new statute under the Department of Human Settlements. The Bill consists of five parts:

1. Bodies corporate — establishment, membership, name, capacities, functions; the functions, powers and fiduciary position of trustees; and proceedings on behalf of.
2. Body corporate rules and participation quotas — rules applicable to body corporate and sectional owners; the effect of quotas and the variation thereof.
3. Dealings with common property and exclusive use rights — various legal transactions regarding common property and units, for example: alienation, letting, expropriation and extension of common property; exercising real right of extension; servitudes in favour of or burdening the land; subdivision and consolidation of units; extension of sections; and delineation and cession of exclusive use rights.
4. Owners, administrators and buildings — duties of owners; insurance; recovery of unsatisfied judgement debts; non-liability for debt of developers; appointment of administrators; damage to, disposal and destruction of buildings; valuation and recovery of rates by local authorities.
5. Miscellaneous — establishment of a Sectional Titles Schemes Management Regulation Board to advise the Minister concerned; making of regulations; transitional provisions.

Those familiar with the content of the existing Sectional Title Act would realise that the Bill does not present much of a deviation, other than moving to a new government department. However, the intention is also in time to simplify and make more understandable the relevant provisions.

The significance of the new era relates to the Community Scheme Ombud Service Bill, 2009. The term ombudsman means representative of the people. The Department of Human Settlements chose the terminology Ombud Service as a more embracing notion with the following underpinnings:

• A simple an inexpensive recourse
• An independent national public entity, fair and impartial
• Uniformity and consistency in handling disputes
• Protection of and remedy for good scheme administration

This Bill also comprises five parts:

1. Establishment; mandate and functions; governing board, executive and staff; and funding.
2. Application procedures and capacity indicators.
3. Investigation of issues and the rights of representation of parties.
4. Order that adjudicators may make in resolving disputes and the right of appeal of parties.
5. Public access to information regarding orders and levies payable by schemes to sustain the Ombud Service — hopefully a small amount payable for the greater good with regard to community living.

The closing date for public comments about the two Bills had been Monday 30 November 2009.

Damage caused by seepage from above

Despite several resources, it often amazes me how little sectional title owners know about their rights and responsibilities.

Allow me to illustrate my statement:

In August 2006 an owner threatened to take the body corporate to court because of inconvenience and damage as result of water seeping through the ceiling of his enclosed balcony when it rains. During the discussion that followed it had been established that the owner has mentioned the problem to former trustees, but never actually followed through with a claim. A claim had then been submitted through the broker. The contractor assigned to investigate and quote reported that the seepage is as result of the deteriorated surface of the open balcony above, causing water to seep through. The insurance company ruled that the surface of the balcony above must first be sealed before any repairs would be approved to the enclosed balcony's ceiling and wall.

The balconies of the scheme concerned are included on the plans of the scheme as part of the square meterage of each unit, and therefore not common property. This further means that the matter does not concern the body corporate, but is an issue between the two owners concerned. The owner of the unit below, that initially threatened litigation, made a half-hearted attempt to get the owner above to oblige to seal the surface of the open balcony. The unit above changed ownership and the owner below just continued to endure the inconvenience and damage—did not even take the matter up with the new owner; try to persuade the new owner or to pursue management rule 71 to resolve the issue by declaring a disputes and entering into arbitration.

Because several open balconies showing signs of seepage, whereas other are enclosed or resurfaced (newly tiled), the body corporate took a decision that the owners of all open balconies that have the original slate (slasto) of 20+ years ago, must at least properly seal their balcony surfaces. Recently (in November 2009) the owner of the unit above obliged and sealed the balcony surface—nearly four and a quarter years later.

The owner of the unit below, however, did not reactivate the original claim to get the insurance company to repair the damage—instead, during the year-end holiday; the owner proceeded to undertake the necessary repairs.

Had the owner of the unit below made a point of knowing and asserting his rights, the following could have been done:

1. Having received the response to his claim in writing, talked to the original owner of the unit above.
2. Followed the discussion up by a letter and in this way started a documentary trail.
3. Declared a dispute and engaged in the process of arbitration.
4. Obtained a ruling, probably in his favour by the arbitrator, as well as the insurance excess payable by the owner above and have this enforced.
5. Got the surface of the open balcony above sealed and the excess paid.
6. Have the damage repaired through the insurance company's contractor.

Ownership apathy—a sectional title mental disorder

Or is sectional title ownership fraud by the bystander syndrome? The purpose of this post is to indicate that there is really no grounds for apathy of sectional title owners, but rather a demonstration of real interest is most needed.

"Apathy is a mental state in which the sufferer lacks the desire, will or energy to engage in any activity, whether intellectual or physical. It is variously called indifference, boredom, lassitude, languor, listlessness, laziness, lethargy or inertia. It may be a symptom of mental disorder. It is first alienation of the self from the world and then self-alienation. Finally it is withdrawal from all participation in the care of others and care of oneself. Collectively, apathy may be expressed in social, economic, political or ideological paralysis, with all the available energy for change locked up in the institutions, systems and structures of society."

What is it about sectional title ownership that owners are often characterised by apathy? Could it be that people attracted to sectional title ownership have a pre-disposition towards alienation mental disorder?—I am not serious. However, Political Apathy Disorder (PAD) is proposed as a new DSM diagnostic category for the failure to develop a social conscience.

Apathy is a common reaction to stress where it manifests as "learned helplessness"; it really is a veiled form of anger. Apathy is often the end-result of prolonged deprivation—if earlier reaction of rebellion led to defeat and humiliation, until finally all response seemed to disappear—there is loss of hope with an impoverishment of thinking processes. In contrast, sectional title ownership offers the opposite to helplessness, defeat and loss of hope:

• Before buying into sectional title ownership you have the right to inspect the scheme's finances, management and conduct rules, etc.—This is important because you need to make sure if the environment agrees with you and if there are no financial surprises looming.
• As an owner you are a member of the collective ownership, the body corporate—your voting power directly related to your percentage of ownership.
• You have the right (rather obligation) to attend, speak, make proposals and vote at the general meetings of owners.
• You have the right to nominate persons (not necessary only owners—but the majority must be) to look after your interests by serving as trustees. You have the right to elect from those persons nominated who you believe would best serving your interests.
• You have the right to question trustees; to engage with trustees at their meetings and state your views.
• You have the right to lobby support and if 25% ownership (in value) request a general meeting the trustees are obliged to arrange one. Should they fail, the 25% may proceed to call the meeting.
• Meetings are subject to quorums, meaning that al small group may not just do as they please.
• The trustees need to decide on matters collectively and majority vote or through circulation—no one trustee may decide on her/his own.
• Certain aspects are subjected to special or unanimous resolution, to which stringent criteria of notice and percentage voting apply.
• Should you not be in the position to attend a general meeting, then you have the right to send a proxy instead.

Deprivation, helpless, defeat, reason for loss of hope—I think not. Ignorance, yes most probably.

The bystander syndrome: Kitty Genovese, an American woman who became famous for her murder, was stabbed to death in New York on 13 March 1964. Kitty was driving home around 3.15am. She parked about 30 metres from her front door. As she walked to her door, she was approached by Winston Moseley. Moseley overtook her and stabbed her twice in the back. Kitty screamed. Her screams were heard by several neighbours. But it was a cold night, many had their windows shut and few recognized it as a cry for help. One of the neighbours did shout at Moseley, "Let that girl alone". Moseley ran away and Kitty made her way to her apartment. Kitty was seriously injured, in full sight of her neighbours, but no one helped her.

Some called to the police, but it was not given a high priority, as it was thought she was "only" beaten up. Witnesses observed Moseley get into his car and drive away. He then returned ten minutes later and found Kitty barely conscious at the back of the building. Out of sight, he attached her again, stabbing her several more times. She tried to defend herself, as was shown by knife wounds on her hands. He sexually assaulted her as she lay dying. He also stole money from her and left her to die. The attacks spanned over half an hour. Eventually, a witness did call the police. The police and ambulance arrived, but she died on the way to the hospital.

The media then reported that 38 people had witnessed or heard her attack. The New York Times printed an article - "Thirty Eight who Saw Murder Didn't Call the Police." This led to a media frenzy and much psychological research. What had possessed these witnesses to do NOTHING whilst Kitty was being stabbed and murdered? This psychological phenomenon became known as bystander apathy, the bystander effect or 'Genovese syndrome'. It is basically a phenomenon where someone is less likely to intervene in an emergency situation when other people are present and able to help, than they would if they were alone.

Revised 15 June 2010 with regard to 25% ownership in value: based on the participation quotas.

Insufficient funds for leaking roof—rights and realities

The facts or circumstances may differ, but many sectional title schemes are faced with realities such as:

• Owners voted for minimum levy increases for several years
• Cash reserves dwindled as result of usage
• Maintenance had been kept to essentials
• At least 10% of owners are in arrears with levy payments; and the arrears and legal fees to collect such have accumulated to a substantial amount
• The lift equipment is 30 years old, maintained in accordance with the law, but wear-and-tear nevertheless—the lift get stuck from time-to-time; is often out of level; and looks aesthetically neglected
• The company that waterproofed the roof for the past twenty years had been liquidated—the warrantee is therefore of no value
• When the previous trustees increased the levies by 10% in accordance to the new Management Rule 31(4A), gazetted 28 November 2008—Department of Land Affairs, No. R. 1264; Government Gazetted, No. 31626—the owners petitioned against the increase
• During the rainy season the roof started leaking at a few places

Options to consider:

1. The owner/s affected by the roof-leakage/s may submit a claim to insurance, but need to pay the excess—new Management Rule 29(4) applies—unless the owners collectively (the body corporate) by means of a special resolution decide that the body corporate will pay the excess (however, 75% of members are perhaps unlikely to assume proportional responsibility for payment of an excess relating to a single section).
2. The owner/s affected by the roof-leakage/s may enter into a dispute with fellow owners (the body corporate) about the excess payable, in which case the arbitration route might be followed (Management Rule 71).
3. The trustees have the right to raise a special levy to have the roof re-waterproofed and guaranteed, but effectively need to raise 110% of the amount required, because the 10% owners in arrears are unlikely to make the special levy payment—the full amount required therefore need to be contributed by 90% owners and the arrears of the 10% escalated.
4. It could be argued that the modernisation of the lift is a non-luxurious improvement; or that the refurbishment is necessary maintenance—if deemed a non-luxurious improvement the trustees need to give notice to the owners and convene a special general meeting where a special resolution need to be passed.

It is important to look into a scheme's situation before buying, because of common property responsibilities. It is further essential to get to know your rights (and obligations as member of the body corporate) as owner within a scheme. Attendance of annual and special general meetings of the scheme (body corporate) is important, because decisions may impact on you materially—a medium term look at maintenance and cash flow (finances) is crucial.

Deterioration of common property

How do the bottoms of balconies get to look like this?

Or balustrades rusted like this? If you think this is an exception, visit the blog of Woodstream Lofts and scroll through the pictures.

In contrast, the Sectional Title Act obliges a body corporate—the owners/members collectively—"to establish for administrative expenses a fund sufficient in the opinion of the body corporate for the repair, upkeep, control, management and administration of the common property (including reasonable provision for future maintenance and repairs), for the payment of rates and taxes and other local authority charges for the supply of electric current, gas, water, fuel and sanitary and other services to the building or buildings and land, and any premiums of insurance, and for the discharge of any duty or fulfillment of any other obligation of the body corporate" (Section 37[1][a]).

A body corporate that fails to provide for sufficient funding for proper maintenance is in violation of the Act.

What can an individual owner do if her/his investment is in jeopardy as result of neglect of fellow owners? There are options to pursue.

In response to Giovanni Camara Da Costa comment below, “What happens when the deterioration of the Common Property damages an Owners Section? Should the cost still be split 50/50?”, herewith my response:

• Firstly, an owner is a member of the body corporate (BC), the collective of owners.
• The BC is obliged to hold annual general meetings (AGM) each year, where the draft budget for the new financial year is tabled for approval of members. The prescribed agenda also makes provision for directives to the incoming trustees.
• If all owners left common property to deteriorate then collectively they are guilty an accountable to one another about neglect.
• If one or more specific owners incur damage sue to deterioration of common property and none of them ever did anything to address the situation, then none of them have a leg to stand on to expect the collective to share in the costs of damages they incurred.
• However, there is documentary evidence that an owner alerted the collective and the collective by majority vote opted to let it be, then the owner concerned—in my opinion—has the right to expect of the collective to incur the costs of damage.
• Responsibility works two-ways!



My neighbour causes nuisance

Smoke, noise, vibrations, dust, odours, light, blockage, animals, children, noxious fumes ... whatever the nuisance, what may you do; or expect the trustees of a sectional scheme to do regarding unreasonable interference?

The Sectional Titles Act (STA), No 95 of 1986, §44(1)(d+e), as well as the Sectional Titles Schemes Management Act, No 8 of 2011—that would repeal sections 37 to 48 of the STA—§13(1)(d+e) reads "an owner must":

• (d) use and enjoy the common property in such a manner as not to interfere unreasonably with the use and enjoyment thereof by other owners or other persons lawfully on the premises;
• (e) not use his or her section or exclusive use area, or permit it to be used, in a manner or for a purpose which may cause a nuisance to any occupier of a section;

There is both a duty not to cause a nuisance and a right not to be unnecessary disturbed.

But what consitutes unreasonable interferance? There are no definitions, the common law applies, namely material interference an ordinary person would have reason to object about. It does not make provision for unusual aversion or a medical condition of intollerance. Professor Graham Paddock elaborates on this matter as it pertains to smoke nuisance and the Tabacco Product Control Act in a video on smoking in sectional title schemes. Download Paddock_Smoking

The trustees of a sectional title scheme can only be expected to intervene if a rule exists that they are obliged to enforce. If a rule does not apply to a particular situation considered a nuisance, an owner or occupier has to tke the matter up with the source of the perceived nuisance. The complainant may pursue prescribed managment rule 71 if the other party is not willing to accommodate.

However, in high density residential schemes occupants ought to have robustness and be prepared to tolerate. Quite interesting, the word robust originates from the Latin robustus, meaning "strong and hardy," originally "oaken," from robur, robus "hard timber, strength," also "a special kind of oak," named for its reddish heartwood.

Sectional Titles Amendment Regulation 2011

Government Gazette No 34639, Notice No R 805, 28 September 2011: Download Gg34639_nn805

Amendments to the following Regulations:

• 5 - common boundary between an exclusive use area
• 6 - boundaries of the sections and common property
• 10 - substitution of the land under a mortgage bond
• 13 - Insertion 13A: replacement schedule for lost or destroyed schedule of servitudes
• 15 - changes whenever the registration of a sectional plan is cancelled
• 16 - issue and replacement of certificates
• 25 - Insertion 25A: replacement of documentation
• 28 - transfer of exclusive use areas
• 30 - management rules may only be amended once there are 30% owners other than the developer
• 34 - sectional morgage bond forms

Amendment of Annexure 8 - Rules: 

• 31 - Insertion of 2A: budget shall coincide with the financial year of the scheme
• 31 - subrule 4 deleted (special levies)
• 36 - itemised estimate of income and expenditure for approval of AGM
• 39(2) - transmitted by facsimile or electronic mail
• 54(5) - inadverted ommision not invalidate supplemented
• 68(v) - purpose for which an exclusive use area elaborated (a-d)
• 71(4) - chief registrar of deeds shall upon written application and subject to payment of the prescribed fee appoint an arbitrator in writing

Without active ownership, accountability doesn’t exist

Accountability of the trustees (and the managign agent) of a sectional title scheme is determined, first of all, by how committed and involved owners are. If only a few owners attend annual general meetings (barely making a quorum); and if from those in attendance the few willing are 'elected' by default as trustees; and if the majority of owners do not play an active role; then accountability doesn’t exist. So the onus, in essense, does not rest with the managing agents (as many owners appear to think). Accountability can only be enforced if the majority of owners show a tangible interest in the matters pertaining to the collectively owned property. Trustees are then not only held accoutable, but also empowered to fulfil their statutory role. Apathy, on the other hand, is demoralising.