WHAT IS SECTIONAL TITLE?
A sectional Title Development Scheme (usually referred to as a Scheme) provides for separate ownership of a property by individuals. These schemes fall under the control of the Sectional Title Act. No. 95 of 1986, which came into force on 1 June 1988. This Act replaced an earlier Act (No. 66of 1971), and has been amended a number of times. This booklet includes amendments up to and including the Sectional Titles Amendment Act 44 of 1997 and the amendments to the regulations published in Government Notice R1422 dated October, 1997.

WHAT DO I OWN?
In buying into a scheme, you will acquire a Section (or sections), and an undivided share of the common property. These are collectively known as a Unit. In practical terms, a section is usually a flat or townhouse, but may also be a garage, domestic staff room or external storeroom. Please note that in many schemes, the garage and external rooms may not be sections, but may be part of the common property of which the owner has exclusive use. A section extends to the mid-point of outer or dividing walls, the lower part of the ceiling and upper part of the floor.

WHAT IS COMMON PROPERTY?
The common property is that part of a scheme that does not form part of any section. Driveways, gardens, swimming pools, corridors, lifts, entrance foyers, parking bays, outer walls, foundations and the roof are all part of the common property. As mentioned above, some parts of the common property are designated as exclusive use areas.

WHAT IS AN EXCLUSIVE USE AREA?
Often this will be a garden, patio or parking bay, but may also be a garage or storeroom in which case the owner will not own the area concerned, but will have exclusive use of the area. Even among experienced property practitioners there is a lot of confusion about exclusive use, leading to many problems in some schemes. Under the 1971 Act, exclusive use areas were usually granted under the rules of the scheme. The 1986 Act replaced this method with registered exclusive use areas, which are shown on the Sectional Plan and are defined as real rights capable of being bonded and traded.
In 1997, the Sectional Titles Amendment Act re-introduced rule created exclusive use areas, while retaining the registered method, thus giving developers and Bodies Corporate a choice. The Act and rules prescribe differences in the way that the two types of exclusive use areas are administered and controlled. In some schemes, use of parts of the common property may have been allocated to owners as Sole Utilisation Areas under the rules of the scheme. They are not recognised as exclusive use areas under The Act or rules.

WHO CONTROLS THE COMMON PROPERTY?
The common property is controlled by the Body Corporate. There are no exceptions to this rule. The practical implication of this is that even though parts of the common property are designated as exclusive use areas, in many respects they are still controlled by the Body Corporate and are therefore subject to the rules of the scheme. These rules might prohibit “braaing” in an exclusive use garden or balcony, control the type of fence or wall erected around a garden, or prevent the installation of a plunge pool or spa bath without the consent or the trustees of the other members of Body Corporate.

WHAT IS THE BODY CORPORATE?
The Body Corporate is the collective name given to all the owners of units in a scheme. It comes into existence as soon as the developer of the scheme transfers a unit to a new owner. All registered owners of units in a scheme are members of the Body Corporate. The Body Corporate controls and runs the scheme. Day-to-day administration of the scheme is vested in Trustees who are appointed by the Body Corporate. Major decisions regarding the scheme are made by the Body Corporate, usually at the Annual General Meeting (AGM), or at a Special General Meeting. At these meetings, matters that affect the scheme are discussed. Budgets are approved, rules can be changed, trustees are appointed, often accompanied by lively discussion!
Every member of the Body Corporate is entitled to vote at these meetings, providing that the member is not in arrears with levy payments or in serious breach of the conduct rules. Members in default can only vote in circumstances described in Part 6 of this booklet. Unless otherwise determined by the developer at the time that the register was opened, or subsequently by the Body Corporate by means of a Special Resolution, an individual member’s voting power is governed by the member’s percentage ownership of the entire scheme. This percentage is known as the Participation Quota (PQ).

WHO ARE THE TRUSTEES
The Trustees are usually owners of units in a scheme who have been entrusted with the task of
looking after the scheme on a day-to-day basis. Trustees are appointed by the Body Corporate at an AGM and usually hold office until the next AGM. The managing agent, members of his/her staff or an employee of the Body Corporate may not be a trustee. The minimum number of trustees for a scheme is two. The Act does not specify a maximum number, allowing the Body Corporate to make that choice annually at the AGM. Ideally, a trustee should possess skills or qualities that will be of benefit to the scheme. Accounting of legal knowledge, organisational abilities, knowledge of electrical or mechanical matters, the ability to type and bookkeeping skills are much in demand, and can save the Body Corporate a lot of time, trouble and money. Above all, a trustee should be a “people person” and a good mediator. It is permissible to appoint a trustee who does not own a unit in the scheme, providing that the majority of trustees are owners, or the spouse of an owner of a unit in the scheme.
Trustees work on a voluntary, unpaid basis, although in special circumstances the Body Corporate may be paid for acting as a trustee. All trustees are, of course, entitled to be reimbursed for all legitimate costs incurred by them in execution of their duties. At the first meeting of the trustees after being appointed, the trustees elect a Chairman who holds office until the next AGM, but can be replaced by either the Body Corporate of the other trustees during his or her term of office.

WHO MAKES THE RULES?
At the inception of a scheme, Management and Conduct Rules are established. These rules form Annexures 8 and 9 to Section 35(2) of the 1986 Sectional Titles Act and may be amended by the developer before the register is opened. As their names infer, the management rules control the running or management of the scheme, while the conduct rules lay down guidelines for the conduct of owners and occupiers and their guests or tenants. Where a scheme was established under the 1971 Act, the rules were made under in accordance with the provisions of that Act and were called Schedule I &II Rules. In schemes where the Body Corporate did not amend and register the standard rules under the 1971 Act, These rules were automatically replaced by the Management and Conduct Rules of the current Act. In cases where the Schedule I & II rules were amended and the amendments were registered, they may still be in force, except that where the old and the new rules are in conflict, the new rules will apply. An excellent and detailed discussion regarding rules will be found in “ The Sectional Title Handbook”, by Graham Paddock and available from him by phone 021- 686 8629.

MAY THE RULES BE CHANGED
Yes. The Body Corporate can change or amend the rules, providing that these changes are not against the intentions or spirit of the Sectional Titles Act. The procedure that must be followed before such changes can be made, is clearly defined in the Act. Proposed changes must be put to members of the Body Corporate at a general meeting, at which members will be able to discuss the proposals before being asked to vote for or against the changes. Amendments to management rules require an Unanimous Resolution, while conduct rules can be changed by a Special Resolution. Please note that such amendments will not become effective until they have been filed at the Deeds Office. Trustees may not amend rules without reference to the Body Corporate.

WHAT IS THE LEVY?
The costs incurred in running a scheme have to be paid by the Body Corporate. These costs include:
· Rates, taxes relating to the common property; (From 1 July 2008 rates & taxes on individual units are charged directly to the registered owner of the unit and not to the Body Corporate)
· Insurance Premiums;
· Repairs and maintenance of the common property;
· Wages and salaries; and
· Water and electricity used on the common property.
These costs are paid by individual owners in the form of a monthly levy, calculated in accordance with the Participation Quota for their unit, unless the developer at the time of opening the register, or the Body Corporate by means of a Special Resolution, allocated a difference value to a particular Unit.
Costs incurred in the upkeep of exclusive use areas must be recovered from the user of the area. In addition to the above, the Body Corporate is obliged to establish a fund for future maintenance and unexpected expenses. The size of this fund is not specified in the Act, but a wise Body Corporate will make sure that the fund is adequate for the size of the scheme and the present condition of the property. If the fund becomes excessively large, The Act does not allow any part of the excess to be refunded. However, the excess could be used to subsidise future levies or to improve the common property.

HOW IS THE LEVY CALCULATED?
At the inception of a scheme and again before every AGM, the trustees have to prepare a budget for the following year. Before the AGM, the proposed budget must be sent to all the members of the Body Corporate for their consideration and for subsequent discussion at the meeting. The Body Corporate can either accept the budget or can ask for changes to be made. Once the budget has been accepted, the total annual cost is divided into monthly amounts and each owner is then “levied” a monthly amount, as mentioned above.

MAY THE LEVY BE CHANGED AT OTHER TIMES?
Yes. In an emergency, the trustees can impose a Special Levy to cover unforeseen expenses, in addition to which the Body Corporate can approve a special levy to cover the cost of improvements to the common property.

WHAT ARE MANAGING AGENTS?
Managing and administering a scheme, particularly a large scheme, is complicated and time consuming. Occasionally, the Body Corporate and trustees undertake the entire task, but unless the Body Corporate is unusually well endowed with specialised knowledge and talents, this is seldom successful. Most Bodies Corporate decide to appoint a Managing Agent, usually a company or close corporation which specialises in this aspect of Sectional Title administration. A managing agent must be registered with The Estate Agents Board and hold a Fidelity Fund Certificate issued by the Board.

The managing agent is appointed by means of a written agreement. Should the agreement not be reduced to writing and signed within thirty days, the 1997 amendments allow either party to cancel the appointment. The contract will be automatically renewed on the anniversary of signing, unless either party notifies the other party of their intention not to renew the contract. The managing agent sends out monthly statements, collects levies and all other money due by the owners to the Body Corporate. On behalf of the Body Corporate, he or she will keep the books, assist with recovery of unpaid debts, prepare the annual budgets, arrange for quotations for repairs and maintenance, send out notices and generally assist the trustees with the numerous time consuming tasks that arise in administering a scheme. To protect and guide the Body Corporate, the managing agent must have a sound and comprehensive knowledge of the Sectional Titles Act and Rules. A good managing agent can save the Body Corporate a lot of time, trouble and expenses.

 

PART TWO

QUESTIONS OFTEN ASKED BY FLAT AND TOWNHOUSE PURCHASES
Living in Sectional Title scheme means community living. This is particularly true for people who have chosen to live in a townhouse. Flat owners can, if they whish, choose a fairly isolated lifestyle. Apart from contacts in lifts, passages, communal gardens and basement parking areas, flat dwellers are often isolated from their neighbours. Townhouse owners on the other hand, because of a more open lifestyle usually have more contact with their neighbours.
Where a large number of people live in close proximity of each other, problems sometimes arise.
Most of these problems can be avoided if all the owners in a scheme show consideration for each other and do not behave in a thoughtless or selfish manner. Among these problems are excessive noise from radios, televisions and CD players. Less common, but by no means unknown, is the noise from parties, washing machines and spin dryers, opening and closing doors, moving furniture, the use of musical instruments etc. While none of these types of noises are unacceptable during the day, they constitute a nuisance late at night or early in the morning. A washing machine in use on a ceramic tiled kitchen floor in an upstairs flat late at night can keep many people awake! The rules were drafted to avoid some of these problems.
Let us look at some of the questions most frequently asked by sectional title owners.

MAY I KEEP A PET?
It is not surprising that permission to keep a pet is covered by the very first rule (Rule 1) of the conduct rules, as much unhappiness and heartache have been caused by a failure to understand this rule. An occupant of a Sectional Title unit may not keep a pet in a scheme without the written consent of the trustees, which consent the trustees may not refuse without good reason. In considering an application, the trustees have to be guided by the type of pet and the nature of the scheme. In granting consent trustees may impose special conditions and may withdraw the consent if the pet causes a nuisance to other owners. Passions run high when it comes to pets! Please note that often a Body Corporate will, by Special Resolution, amend conduct rule 1 and ban all or certain types of pets.

MAY I MAKE ALTERATIONS INSIDE MY SECTION?
Generally, it is not necessary to obtain permission to make alterations inside a section. However, if these alterations involve structural changes or affect the electrical or water supply, or the drainage system, it is essential to obtain expert advice, especially if the changes involve major structural changes, such as the removal of a wall. As a matter of courtesy, you should advise your neighbours if the alterations are going to cause them any inconvenience or excessive noise. Builders can cause a lot of noise and dust! Many owners renovate their kitchens and bathrooms, add extra cupboards, re-tile or re-carpet floors without causing any problems. Please remember that all changes that affect the common property require consent.

MAY I EXTEND MY SECTION?
An owner wishing to extend his or her section must first obtain permission from the Body Corporate, by means of a special resolution. The owner will be responsible for all the costs of amending the sectional plan, re-calculating all the participation quotas and having the amended plan approved and registered. The owner will require the services of an architect or land surveyor and an attorney. Prior to the 1997 amendments to the Act, permission to extend a section required an unanimous resolution.

MAY I INSTALL A SECURITY GATE OUTSIDE MY FRONT DOOR?
Yes. However, as the security gate will be visible from parts of the common property, in the interests of conformity the trustees will have to approve the pattern and colour of the gate.

MAY I FIT AN AWNING OUTSIDE A WINDOW?
As the outer walls form part of the common property, Body Corporate consent will be required. It is common practice to fit awnings to north and west windows and it would be very unreasonable to refuse permission. However, the rules prevent an owner from doing anything which upsets the harmonious appearance of the scheme, so the colour and style of the awning will have to conform to an approved pattern.

MAY I FIT A DIFFERENT TYPE OF FRONT DOOR?
The front door is visible from common property and in the interests of uniformity, the door must conform to an approved design.

MAY I CHANGE THE STYLE OF THE WINDOWS?
Windows are generally considered to be part of the common property. Therefore, permission would be required, and would probably not be granted.

MAY I ENCLOSE MY BALCONY?
The question regarding enclosing balconies is a very complicated one. A balcony may form part of a section, part of the common property or it may be an exclusive use area. Even though the balcony forms part of a section, it is by no means certain that it can be enclosed. A balcony is usually considered to be a non habitable area. Enclosing the balcony would convert it to habitable area, in which case planning permission from the local authorities would be essential, and might not be granted. If the balcony forms part of the common property, enclosing it would effectively extend the section, which requires a Special Resolution from the members of the Body Corporate. Such an enclosure would also affect the harmonious appearance of the scheme.

MAY I BUILD A WALL AROUND MY EXCLUSIVE USE GARDEN?
The exclusive use garden forms part of the common property. Therefore, consent is necessary.

MAY I EXTEND MY PATIO?
A patio is usually common property so consent would be required.

MAY I FIT A GATE FO MY CAR PORT?
A car port is common property, consent is required.

MAY I INSTALL A SPA BATH INSIDE MY SECTION?
Apart from structural problems caused by the weight of the installation and the water in it, the installation of a spa bath (Jacuzzi) requires alterations to the plumbing and electrical installation, so permission is needed. A spa bath may require more electrical power than is available in your section, in which case it might be necessary to provide a three phase supply to the section. This is a major task and would certainly require expert advice.

MAY I FIT AN AIR-CONDITIONER?
Air-conditioning units that take air from outside the building are partly installed outside the section, therefore permission is necessary. Another consideration is the noise generated by the compressor in the air-conditioner. These compressors often cause considerable vibrations, which will certainly affect your neighbours. In a block of flats, compressor and fan noises travel vertically and horizontally and will affect the flats above and below as well as the flats on either side. These noises may not be intrusive during the day, but will certainly prove to be a problem during he night.

MAY I INSTALL UNDER-FLOOR HEATING?
Under-floor heating consumes a lot of electrical power. When fitted to a large flat or townhouse, the power requirements may be too great for a normal single phase supply, necessitating the installation of a three phase supply. Expert advice is essential. Skirting or free-standing heaters are more versatile and easier to control, and usually more economical to run.

MAY I INSTALL MY OWN SATELLITE DISH?
No. A satellite receiving dish must be mounted outside on the common property which will require consent from the Body Corporate. Apart from this, an owner cannot do anything that will affect the harmonious appearance of the scheme. Individual dishes, visible from outside the building would without doubt be very inharmonious and therefore cannot be allowed.

MAY I SELL MY UNIT?
Yes, of course you can. However you must notify the Body Corporate that you have sold your unit.
Please note that the Act requires an owner of Sectional Title unit to notify the Body Corporate of any change in the status of bond registered over the unit, such as the registration of a second bond, or cancellation of an existing bond.

ARE THE TRUSTEES AS POWERFUL AS THEY SEEM TO BE?
No, not al all. The trustees are appointed by the Body Corporate to look after the interests of the scheme and to accept the instructions of the members of the Body Corporate. A Body Corporate is not subject to the Companies Act and it is important that the trustees are not seen as Directors of the Body Corporate. A trustee who is an owner or spouse of an owner may not derive any financial or economic benefit from his or her position as a trustee. The Body Corporate can remove a trustee from office at any general meeting. A trustee who is declared insolvent or of unsound mind, or is convicted of any offence involving dishonesty, is disqualified from holding office. The managing agent, members of his or her staff or an employee of the Body Corporate may not be a trustee. The role of a trustee is a responsible one, and very time-consuming. It is considered by many to be a thankless task. Good trustees are a valuable asset in any scheme and deserve support from members of the Body Corporate.

WHAT HAPPENS IF I BREAK THE RULES?
The Act requires that the trustees make sure that the individual owners in a scheme adhere to the rules of the scheme. The 1997 amendments to the rules introduced a new rule which allows all disputes between members or between members and the Body Corporate to be referred to Arbitration. Prior to this amendment, disputes which could not be amicably resolved had to be referred to an appropriate Court. Arbitration is much cheaper, far less formal and generally more “user friendly” than action through the Courts and is very suitable for Sectional Title disputes. The arbitrator’s decision is final and at reasonable cost can be made an Order of the High Court. Where the breach of the rules involves a failure on the part of an owner to maintain his section in good condition, the Body Corporate is entitled to carry out such repairs or maintenance and to charge the owner for the costs involved. These are extreme measures and, in practice, are seldom required as most disputes can be settled by mediation. Most owners are reasonable people and are prepared to comply with the rules, which are there to benefit all the owners. Please note that any owner who, in spite of warnings, is in breach of the conduct rules may not (except for special or unanimous resolutions) vote at a general meeting. In part four this booklet, you will find a summary of the duties and obligations of owners as prescribed in the Act and rules.

WHAT SHOULD I DO IF MY NEIGHBOURS BREAK THE RULES?
If your neighbours consistently break the rules by making too much noise or being a nuisance in some other way, you should report them to a trustee. Please remember that you should involve the trustees only in the case of serious disagreement, and not in trivial disputes. If the problem persists and the trustees fail to act, you can refer the dispute to arbitration. Your managing agent will advise and assist you in this regard.

WHAT HAPPENS IF I FAIL TO PAY MY LEVY?
The Body Corporate can take legal action to recover unpaid levies, with all recovery costs to be debited to the defaulter. All owners in a scheme have a pay a levy. Any owner who fails to pay their levy, while continuing to enjoy the benefits of living in the scheme, is doing so at the expense of all the other owners. An owner who is in arrears with his or her levy may not vote at a general meeting of the Body Corporate, except for proposed special or unanimous resolutions. The Body Corporate is entitled to charge interest on arrears.

WHAT ABOUT INSURANCE?
The Section Title Act required the Body Corporate to ensure that the buildings are insured to the value of their replacement cost. The insurance must cover all the sections and all improvements to the common property. The premiums for this insurance form part of the monthly levy. If you feel that your section is worth more than the amount for which it is insured, you are at liberty to increase the amount for which your section is insured, for which you will have to pay the extra premium. Please note that the Body Corporate insurance only covers damage and destruction of the buildings. It does not cover the contents of your section. You must make sure that your furniture and personal belongings are separately and adequately insured by means of a suitable policy.

WHAT CAN I DO TO HELP?
The success or failure of any scheme is in the hands of the Body Corporate. As an owner, you can make a difference. Don’t be complacent – be involved. Play an active part in the day-to-day affairs of your scheme. Attend general meetings, or if you can not attend, give another owner your proxy.
Keep your section in a state of good repair and keep your exclusive use areas neat and tidy. Show consideration to your neighbours and use your section and the common property in a way that will not interfere with other residents’ rights to use theirs.

Above all, be a good neighbour!