ST trustees have to be familiar with a body of laws

Sectional title schemes in South Africa are surrounded by a plethora of legislation of which many of the trustees are hardly conscious, says Michael Bauer, General Manager of IHFM, the sectional title managers.

“Becoming a trustee of a sectional title scheme is a job that many people take on light-heartedly - sometimes because they have been asked to do so by a good friend who is already a trustee,” says Bauer in his latest weekly online sectional title newsletter at www.ihfm.co.za. “They then discover to their dismay that they are inadequately prepared for this task because sectional title schemes are subject to many rules and regulations.”

“If trustees are going to be responsible about their tasks,” says Bauer, “they must read and get to know all the relevant legislation.”

This, he adds, means making themselves totally familiar with the Sectional Title Act and its Prescribed Management Rules and the scheme’s conduct rules, as well as certain other laws applying to residential property.

“The Sectional Title Act should be the first document read by any new trustee. It sets out the laws that actually govern the composition of the body corporate and the functions, powers and restrictions of the trustees and the body corporate. Trustees need to bear in mind, too, that the sectional title Amendment Bill is due to be promulgated in the last quarter of 2010.

Another body of legislation with which trustees should become familiar, adds Bauer, is the Estate Agency Affairs Act (of 1976). One of its requirements sometimes overlooked is that the managing agent must be registered with the Estate Agency Affairs Board and must have a valid Fidelity Fund Certificate if he collects sectional title levies. Ignoring this particular legal requirement, says Bauer, has cost some sectional title schemes very dearly.

Equally relevant to sectional title schemes, says Bauer, is the National Buildings and Standards Act. Among other things this stipulates that all building alterations must be submitted to and approved by the local council and the trustees before any work begins.

“It might be thought that everybody knows about the need for planning approval,” says Bauer, “but this is not so – and those who do know it often try to ignore it. The situation is worst in the very poor areas where there is often a total disregard for the need to obtain approval, but riding roughshod over this law is also surprisingly common in many upper bracket areas.

“In a recent case brought to my attention, an owner added a full 10m2 extension to his unit without obtaining any approval from council nor the trustees and the ground appropriated was common use land. Any alterations which affect the structure and, therefore, the strength of the building,” says Bauer, “ all have to be particularly carefully monitored.”

Also important, says Bauer, are the town planning scheme regulations which govern - and often restrict - the use to which an occupier can put his unit.

Certain rules prevent residential units being used for business purposes. In a recent case the owner bought two units, knocked out the dividing wall and ran a business from the second unit. Both actions were illegal.

Other legislation that affects sectional title schemes is the Occupational Health and Safety Act 85 of 1993.

“This Act, as its name implies,” says Bauer, “not only ensures that all equipment and installations are safe, it also tries to protect the body corporate staff and its members. The regular maintenance of lifts, fire escapes, fire equipment, air vents and the like are prescribed in the Act as well as such matters as protective clothing, insurance and workmen’s compensation for all people employed on the building. The Act also requires regular health and safety audits. ”

Also on Bauer’s study list is the National Credit Act. As is now widely known, this regulates credit transactions of any kind - including home mortgages and levy finance services. The latter legislation is particularly relevant to sectional title schemes. Also regulated are the levy finance services provided by companies or managing agents if they exceed R250,000.

“The National Credit Act in general,” says Bauer, “has already improved the debt position of thousands of South Africans who had overextended themselves. A recent court case which has done away with debtors’ abilities to avoid prosecution by claiming that they are receiving debt counselling, is especially important.”

“The Debt Collectors’ Act of 1988 is also required reading for any trustee and in many ways complements the National Credit Act. Lastly, the new Consumer Protection Act (now postponed until March 2011) and the latest amendments to the Companies Act are particular relevant to Home Owners’ Associations registered as section 21 companies.

The IHFM campaign to educate trustees more thoroughly and prepare them for their duties, says Bauer, is proving effective, but until all trustees are familiar with all the legislation mentioned, there will always be weaknesses in the service they provide.

Article from: www.ihfm.co.za