WHO EXACTLY ARE THE BODY CORPORATE, TRUSTEES AND MANAGING AGENT?
In order to answer this question, one must first understand the meaning of a sectional title. A Sectional Title Development Scheme provides for separate ownership of sections of a property by individuals.
Owners and tenants are often confused by the terms “body corpo-rate”, “trustees” and “managing agent”. Who exactly are these people and what are their duties and responsibilities?
Section 36(1) of the Section Titles Act 95 of 1986 (“the Act”) reads as follows:
“With effect from the date on which any person other than the developer becomes an owner of a unit in a scheme, there shall be deemed to be established for that scheme a body corporate of which the developer and such person are members, and every person who thereafter becomes an owner of a unit in that scheme shall be a member of that body corporate.”
In short, the owners of the units constitute the body corporate. The body corporate comes into existence as soon as the developer transfers ownership of a unit to a new owner. Thereafter, each and every owner of a unit will form part of the body corporate as soon as ownership is transferred and registered.
Trustees are elected by the body corporate at the Annual General Meeting and basically act as representatives of the body corporate (i.e. the owners of the units). The trustees are tasked with taking over the duties and responsibilities, as imposed by the Act, and to exercise these duties on behalf of the body corporate. The trustees are subject to the directions and restrictions imposed by the body corporate. Trustees must meet on a regular basis and are required to keep proper minutes of these meetings, which minutes can be inspected by any member of the body corporate.
Managing agents are appointed by the body corporate to manage and administer the scheme. Some of the most important duties of the managing agent are inter alia: sending out monthly statements, collecting levies and all other money due by owners to the body corporate, record keeping, recovering unpaid debts, obtaining quotations for repairs and maintenance and sending out notices.
WHAT DOES THE OWNER OWN AND WHAT CONSTITUTES THE COMMON PROPERTY AND EXCLUSIVE USE AREAS?
When a person buys a “unit” (whether a townhouse or an apartment) in a scheme he essentially purchases a section (or sections) of the scheme and sometimes an undivided share of the common property. The undivided share of the common property, such as a garden or a carport, is not part of the section but the owner will have exclusive use over his undivided share in the common property. Whether or not a structure such as a garage or storeroom will form part of the section or exclusive use area will be determined by the sectional plan.
In terms of the Act, common property is the land included in the scheme and such parts of a building or buildings not included in a section. Common property do not form part of any section within the scheme. Examples of common property are: parking bays, swimming pools, gardens, driveways, lifts, corridors, etc. As mentioned above, some owners may have an exclusive use over the common property, such as their garden or carports.
Exclusive use area is defined in the Act as: “a part or parts of the common property for the exclusive use by the owner or owners of one or more sections”. Exclusive use areas such as: gardens; patios and carports, are not owned by the owners, but the owners of a section have exclusive use of these areas.
Exclusive use areas can be created by registering it with the Deeds Office or by the rules of the scheme. Registered exclusive use areas enjoy more protection as those created by scheme rules.
In this “Sectional Title” issue::
- Who exactly are the body corporate, trustees and managing agent?
- What does the owner own and what constitutes the common property and exclusive use areas?
- Levies, what are you paying for?
- Rules of the scheme
LEVIES, WHAT ARE YOU PAYING FOR?
Section 36(1) of the Act describes the body corporates’ duties, which include: “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 .”
In order to adhere to this duty, levies, usually in the form of monthly payments, are payable by the owners to the body corporate to be used for the maintenance and administration of the scheme.
- Levies are also used to cover expenses such as:
- Garden service;
- Swimming pool upkeep and repair;
- Maintaining recreation facilities;
- Managing agent fees;
- Water and electricity bills for the common property;
- Reserve fund; and
- Municipal taxes.
RULES OF THE SCHEME
Section 35 of the Act governs the aspects relating to the rules of the scheme. Section 35(1) stipulates that a scheme shall, as from the date of the establishment of the body corporate be controlled and managed, subject to the provisions of the Act, by means of rules.
The “rules” consists of management and conduct rules. Management rules relate to the running or management of the scheme, and conduct rules relate to guidelines for the conduct of owners and their guests or tenants.
These rules are regulated by regulations, Annexures 8 & 9 of the Act, and form part of the developer of the scheme’s application when opening a sectional title register.
Both the management and conduct rules, as prescribed by regulation, may be substituted, added to, amended or repealed by the developer, when submitting an application for the opening of a sectional title register, or by the body corporate by a special resolution, provided that the addition or amendment may not be irreconcilable with any of the prescribed rules.
Section 35(3) stipulates that: “any management or conduct rule made by a developer or a body corporate shall be reasonable, and shall apply equally to all owners of units put to substantially the same purpose.”