The Role of a Body Corporate and how to Manage Disputes
Latest statistics regarding sectional-title schemes shows how widespread this property type is for the South African property market, and as such, it becomes imperative for every homeowner to understand the rules and duties of the body corporate. But more importantly, owners need to know how to deal with conflict when it comes to disagreements between themselves and the appointed trustees.
According to Lightstone reports, there are more than six million people in SA living in sectional-title homes, and the stock count is well over 700 000. The reason sectional-titles are so popular is that they appeal to the average home buyer in many ways - from security and affordability to easy maintenance. When it comes to the general upkeep to common areas such as painting outside walls, paving and roof repairs, the Body Corporate takes care of this using the levies owners pay each month.
However, the sectional-title model can sometimes take a downward turn if the Body Corporate abuses its power and acts in its own interest instead of the collective. Therefore, by understanding the role of the Body Corporate, its functions and how to handle conflicts, then your experience living in this property-type will be hassle-free.
First and foremost, the Body Corporate is a juristic person (non-natural person) which requires organs and agents to act on its behalf. The organs are the trustees who ensure various tasks are carried out. Some of these tasks include:
- Establishing and maintaining common property, such as gardens, lifts and security equipment
- Ensuring the payment of levies and other contributions
- Establishing a reserve fund in accordance with the Sectional Titles Amendment Act
In fact, the duties that trustees are responsible for are exhaustive, especially in big sectional-titles. To read the full list of duties, check out the Sectional Title Schemes Management Act (STSM Act), 8 of 2011.
In all sectional-titles, the Body Corporate elects trustees who are entrusted to manage the property in good faith. And as stated in Section 40(b) of the Sectional Titles Act: "If you act on behalf of another, you have a duty to act with care. If you do not do this, you can be held liable for the loss suffered by members."
However, even though there are a number of laws in place, there will of course still exist disputes between the various parties. If you (as an owner) find yourself in a situation where you believe that your sectional-title is being mismanaged or if you have a dispute with another resident etc, then you can file a complaint with Community Schemes Ombud Service (CSOS). This statutory dispute-resolution service was established in October 2016, and it provides a platform to settle disputes that cannot be resolved internally.
When a complaint is filed with the CSOS, they will analyse if it should be accepted or not, and if accepted, the dispute will be settled by conciliation or arbitration. An order issued holds the same weight as a judgement of the High Court or Magistrates Court. The CSOS is also responsible for storing and monitoring the governance of sectional titles - which involves sub-tasks such as management and conduct rules, constitutions and memoranda of incorporation.
Since the introduction of the service, all sectional titles began paying a CSOS levy each quarter - which is capped at R40 a month. However, if a sectional-title pays a monthly levy of R500 or less, it will not be liable to pay.
Trustees undoubtedly play a valuable role in the management and upkeep of sectional-titles. However, most work normal jobs and only have limited hours in their day. More than this, trustees are generally amateurs when handling real estate matters, therefore many Bodies Corporate opt to employ the expertise of professional managing agents. Overall, it has been shown that sectional-titles who use the expertise of agents have fewer problems with levy arrears, and are also more secure, cleaner, and better maintained.
The role of sectional titles in the South African property market is one of unwavering growth, continuous development and widespread popularity. With more and more people opting for this property type each day, it becomes imperative for buyers to research and understand the rules, regulations and conflict resolution platforms available that are in accordance with national legislation.
If you require further information regarding sectional-titles, speak to our helpful agents at De Lucia Group today who will assist with your queries.
Author: De Lucia Group