Sectional Title - understand insurance, extensions, the ombudsman and more
Sectional title has become one of the most popular forms of property ownership in South Africa. But do buyers really understand the rules governing and protecting them once they move in?
Increasingly, buyers are choosing to invest into sectional title schemes because of factors such as the level of security and the community lifestyle as well as the affordability compared to full title homes, and the reduced costs of maintenance.
Martin Bester, Managing Director of Intersect Sectional Title Services, a company which recently celebrated 40 years of operation in SA managing Sectional Title, advises that it is important for all buyers looking to invest in Sectional Title schemes to know their rights and obligations when it comes to sectional title.
According to Bester, who sits on the board of the Residential and Sectional Title Committee of SAPOA and is an alternate member of the Sectional Title Regulations Board, further to the provisions of the Sectional Titles Act, a sectional title scheme is governed by the Regulations to the Act and the Management and Conduct Rules of the development as registered in the deeds office.”
Study the rules and regulations
“Once a body corporate has been established, owners can only change the Management Rules by means of a unanimous decision and the Conduct Rule by means of a special resolution.”
Sectional titles and insurance – are you covered?
Can you extend your section?
“Under Section 24 of the Sectional Title Act, any owner wishing to extend his or her section needs to apply to the body corporate for approval. On receiving this approval - which must be in the form of a special resolution of the members - the owner must arrange a draft sectional plan of extension which is then submitted to the Surveyor General for approval. A land surveyor or architect must also confirm that the proposed extension does not exceed the 10% extension threshold, currently in place,” says Bester.
Amendments to the Sectional Title Act
One such amendment is the insertion of rule 31(2A), which states that the budget of the body corporate shall run concurrent with the financial year of the scheme.
“This, in turn, led to the amendment of rule 36 (1) which now provides for the trustees to prepare the budget, prior to year end, and to lay this budget before the members at the AGM. Whereas in the past many budgets were ‘on hold’ until the AGM was held and the budget approved by the members, sometimes putting strain on the cash flow of the body corporate.”
Another amendment, which according to Bester will save time, costs and importantly, resources, is the substitution of rule 39, which now allows for the delivery of documents by means of facsimile or email, provided that the owner, in writing, consents to receiving same in such a manner.
Other such changes that will affect Sectional Title and Community Schemes are the Sectional Titles Schemes Management Act and the Community Schemes Ombud Services Act.
Sectional Titles Schemes Management Act
According to Bester, the Sectional Titles Schemes Management Advisory Council will be tasked with making recommendations and advising the Minister on the provisions of the act, as well as keeping the implementation of the Act and the regulations under regular review.
It is envisaged that the Ombud service will investigate and adjudicate claims and complaints against managing agents or other employees of community schemes, such as sectional title body corporate’s, home owners associations, shareblock schemes etc., and should have jurisdiction to rule on certain aspects thereof.
“It is also hoped that this service will provide both the trustees and the residents within community schemes the platform to resolve disputes in an orderly, fair and equitable manner.”
“Buyers must remain savvy to the rules, regulations and governance pertaining to Sectional Titles and Sectional title units will continue to be popular among security conscious buyers in the future and provide a good return on investment if the principles of buying property are adhered to,” concludes Bester.blog comments powered by Disqus
Article by: Dieter Deppisch - www.knowledgefactory.co.za