New to Community Schemes - The Ultimate Guide to Understanding Sectional Title Schemes – Part Two

Administrative Management, Sectional Title Management

By Ané de Klerk

In this second part of our three part series, we will take a closer look at meetings and maintenance in the sectional title context. Missed Part one of this series? I suggest reading it here before continuing.

SECTIONAL TITLE MEETINGS

Member meetings:

Owners of units in sectional title schemes get together at meetings to discuss and make decisions concerning the management of the scheme.

There are two types of member-meetings:

1. Annual General Meetings (AGMs)

These must be held once a year, within 4 months of the body corporate’s financial year end. At these meetings certain business as prescribed by law must be dealt with, including to:

• receive trustee reports
• approve insurance schedules
• determine the extent of public liability and fidelity insurance cover
• approve budgets for the next financial year
• consider annual financial statements
• appoint an auditor
• determine the appropriate number of, and elect, trustees
• report on the lodgment of changes to Conduct and/or Management Rules
• direct and/or restrict how trustees are to perform the body corporate’s powers and functions.

2. Special General Meetings

These are held any other time of year when there is a specific issue that needs to be discussed or a decision that needs to be made by the members. For example, if the trustees want the members to authorise the installation of separate water meters and recovery of the cost of supply of water to the sections and exclusive use areas in accordance with metered supply, they could call a special general meeting for this purpose. While this type of resolution can be taken at the body corporate’s AGM, the trustees may deem it wise to table it at a special general meeting instead if the AGM is scheduled for much later in the financial year and they do not want to wait that long before getting the ball rolling on the project.

Trustee meetings:

These must be held regularly to discuss the day-to-day management of the scheme. While the primary purpose of these meetings is for the trustees to consider and vote on matters; these meetings may also be attended by members, registered bondholders, holders of future development rights and the managing agent. While they may voice their opinions, they may not propose motions or vote. That power is reserved for trustees alone, who hold one vote each. The chairperson holds the casting vote in case of a deadlock. Examples of matters that are considered at these meetings include applications received from members wishing to consolidate or subdivide their sections and the appointment of a managing agent to perform certain secretarial, administrative and/or management tasks.

SECTIONAL TITLE MAINTENANCE

In sectional titles schemes, the responsibility to maintain property that forms part of owners’ sections lies with the owners concerned, while the body corporate is responsible for maintaining the common property. It is important to note that a section extends to the mid point of its floors, walls and ceilings. This means that a wall dividing a section’s living room and the common property garden outside, will be 50% section (the inner half) and 50% common property (the outer half). The same principle applies to objects inserted into and/or forming part of the walls, like windows and doors.

The body corporate is also responsible for maintaining exclusive use areas (which they must budget for and fund by collecting exclusive use contributions) and pipes, wires cables and ducts either situated on common property or within a section, but serving multiple sections. Therefore, if there are any issues with water leaking from a plumbing stack in an apartment, the occupier should notify the trustees as soon as possible so they can take action to prevent further damage to property.

Another exemption to the general rule is that geysers and other water-heating installations situated on common property must be maintained by the owner served by said water-heating installation, rather than the body corporate. Therefore even a geyser situated in roof space above the apartment’s ceiling must be maintained by the owner, rather than the body corporate.

Courtesy: The Advisory - Community Schemes Specialists

Specialist Community Scheme Attorney (BA, LLB), Ané de Klerk, is a Director of The Advisory, a boutique consultancy specialising exclusively in community schemes law. Her focus is legal education, which includes presenting seminars and running online and in-person training programs and courses.

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