SECTIONAL TITLE - F.A.Q

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 procedures that must be followed before rules can be changed is clearly defined in the Act and rules. Proposed changes must be put to members of the
body corporate at a general meeting, at which members will be able to discuss the proposed changes before being asked to vote for or against them.
Amendments to management rules require a Unanimous Resolution, while conduct rules may be changed by a Special Resolution. These amendments will not become effective until filed at the Deeds Office.

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

MAY I FIT AN OUTSIDE AWNING?
As the outer walls form part of the common property, body corporate consent is required. It is common practice to fit awnings to north and west windows and it would be very unreasonable to refuse permission. However, the harmonious appearance rule (rule 68(1 )(iv)) will apply.
 
 MAY I FIT A DIFFERENT TYPE OF FRONT DOOR?
As the front door is visible from common property, in the interests of harmony it must conform to an approved design.
MAY I CHANGE THE STYLE OF MY WINDOWS?
Windows are generally considered to be part of the common property and are always visible from the common property. Therefore, body corporate consent is 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 be:

• Part of a section.
• Part of the common property over which the owner has registered exclusive use.
• Part of the common property over which the owner has rule created |exclusive use.
• Part of the common property over which exclusive use does not exist.

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

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. If the changes involve major structural changes, such as the removal of a wall, extra care must be exercised as the stability of the building might be jeopardised. Please refer to section 28 of the Act and management rule 68(1)(iii).

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?
Yes, but only with consent. An owner who wants to extend the limits of his or her section must first obtain the consent of the body corporate by a special resolution of the members. The owner applying for permission will be responsible for the costs of amending the sectional plan of the scheme, re­calculating all the participation quotas and arranging to have the amended plan registered. When granting permission, the body corporate must take into consideration the effect that the extension will have on the harmonious appearance of the scheme and may well impose restrictions in that regard. If the proposed extension will affect the PQ of any section by more than 5%, the applicant will have to obtain the consent of all the bondholders. Section 24 deals with extensions of sections.

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

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 very seldom successful. Most Bodies Corporate appoint a Managing Agent, usually a company or close corporation that specialises in this aspect of Sectional Title administration. Estate agency legislation requires a managing agent who handles body corporate money to register with The Estate Agency Affairs Board and hold a Fidelity Fund Certificate issued by the Board.

The managing agent sends out monthly statements, collects levies and all other money due by owners to the body corporate. On behalf of the body corporate, the managing agent keeps the books, recovers unpaid debts, prepares the annual budget, obtains quotations for repairs and maintenance and sends out notices. The agent also assists 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 expense.

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

CAN THE LEVIES BE CHANGED AT OTHER TIMES?
Yes. In an emergency, the trustees can impose a Special Levy to cover unforeseen expenses, such as essential repairs and maintenance. In addition, the body corporate can approve a special levy to cover the cost of improvements to the common property. Special levies must be calculated according to participation quotas. The procedures that have to be followed before improvements can be approved are prescribed in the rules.
                     

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 members of the body corporate for their consideration and for subsequent discussion at the meeting. The body corporate can either accept the budget or 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.

HOW DO THE COSTS OF RUNNING THE SCHEME GET PAID?
The costs incurred in running a scheme have to be paid by the body corporate. These costs include:

• Rates, taxes and other charges
• Insurance premiums
• Repairs and maintenance of the common property
• Wages and salaries of cleaners and other staff
• Water and electricity used on the common property
• Provision of security or other services

 These costs are paid by individual owners in the form of a monthly levy, calculated in accordance with the Participation Quota or nominated value for their unit. The Act requires an owner who has the benefit of an exclusive use area to make an extra contribution to cover rates and taxes, insurance and maintenance of the exclusive use area. This applies to all registered exclusive use areas and to exclusive use areas created under the rules of the 1971 Act, but may not apply to those created under the rules of the current Act.
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.
                     

There are two ways in which members of a body corporate can exercise a vote at meeting of owners. The first of these is by a show of hands in which case an owner will have one vote, irrespective of the number of units that he or she may own. This form of voting is used for ordinary resolutions. The second way of voting is by a poll based on Participation Quotas (PQs). Any owner who is entitled to vote may demand a vote by poll, even after the result of a vote by a show of hands has been declared. Voting for a special resolution must be by number and by poll based on PQs. If an owner's proprietary rights are adversely affected, the resolution will not become effective until the affected owner has agreed in writing to the resolution.

When a vote is taken at a general meeting of a body corporate and the voting is deadlocked, the chairman of trustees does not have a casting vote. Please note that when voting for an unanimous resolution at a general meeting of a body corporate, an abstention is deemed to be a vote in favour of the resolution. This does not apply to a door-to-door poll of owners.

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

The body corporate has to vote on a wide range of choices that can affect the running of the scheme. These range from simple decisions such as voting for trustees, approving budgets and other routine matters, to changing rules and making decisions that affect the common property. There are three types of resolution. Simple decisions require agreement from a majority of owners. Special decisions require a higher percentage and important decisions require unanimous consent.

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

At the inception of a scheme, Management and Conduct Rules are established. These rules form Annexures 8 and 9 to the 1986 Sectional Titles Act and may have been amended by the developer before the register was opened. As their names imply, 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, their guests or tenants.
In schemes that were established under the 1971 Act, the rules were made in accordance with the provisions of that Act and were called Schedule I & II Rules. In schemes in which the body corporate did not amend the standard rules of the 1971 Act, the management and conduct rules of the new Act automatically replaced those rules. In schemes in which amendments to the Schedule I & II rules were registered with the Registrar of Deeds for the area in which the scheme is situated, they may still be in force.
​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

The trustees take over the functions and duties assigned to the body corporate by the Act and rules, but are always subject to any directions or restrictions imposed by the body corporate at a general meeting. Trustees are required to meet regularly and to keep minutes of all their meetings. These minutes are open to inspection by any member of the body corporate. Any member of the body corporate is entitled to attend and speak at trustees' meetings, but may not vote at that meeting.

Trustees acting in good faith are indemnified by the body corporate. Trustees who are grossly negligent or act with mala fide (bad faith) do not enjoy such indemnity and can be held personally liable for their actions. The chairman of trustees has a casting vote at a trustee meeting but not at a general meeting of the body corporate.

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

Trustees are appointed by the body corporate at an AGM. They 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. Although neither the Act nor prescribed rules impose a maximum number of trustees, the minimum number of trustees for a scheme is two. Ideally, a trustee should possess skills or qualities that will be of benefit to the scheme. Accounting, bookkeeping or legal knowledge, organisational abilities, knowledge of electrical or mechanical matters and PC skills are much in demand, and can save the body corporate a lot of time, trouble and money.

It is permissible to appoint a trustee who does not own a unit in the scheme, although this is neither a common practice nor is it usually desirable. The majority of trustees must be owners, or the spouse of an owner of a unit in the scheme. An employee of the body corporate, such as a caretaker or supervisor, may not be a trustee. Trustees are volunteers who in most circumstances may not be paid for acting as a trustee. An exception to this rule is that a trustee who is not an owner may be remunerated at a rate decided by the body corporate. However, all trustees are entitled to reimbursement 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 usually holds office until the next AGM.

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

In a purely residential scheme, a Participation Quota (PQ) is worked out mathematically and is an expression of the size of a section in relation to the sum of the size of all of the sections. In a scheme registered under the current Act, this figure is expressed as a percentage to four decimal places. Under the earlier Act, the figure was expressed as a decimal fraction. As an example, a section of 120 m2 in a scheme in which the sum of all the sections is 1000m2 has a PQ of 12,0000% in a scheme registered under the 1986 Act or 0,120 under the 1971 Act.

In a combined commercial and residential scheme the PQs for the commercial sections are nominated by the developer, while those for the residential sections are calculated according to the size of a section as mentioned above. Participation Quotas are shown on the sectional plan of the scheme.

The Sectional Titles Act allows the developer of a sectional scheme to nominate values, which differ to the PQs. This right passes to the body corporate upon establishment and requires a special resolution from the members and the written consent of any owner adversely affected by the change. It must be emphasised that these nominated values do not replace the PQs shown on the sectional plan, but where such values exist, obligations to pay and voting rights will be calculated in accordance with these values and not the PQs.

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

The body corporate comes into existence as soon as the developer of the scheme transfers a unit to a new owner. From then on, every purchaser becomes a member of the body corporate when transfer of his or her unit is registered. All registered owners of units in a scheme are members of the body corporate. The body corporate controls and runs the scheme in accordance with the requirements of the Act and rules.

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, and 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 his or her levy payments or in serious breach of the conduct rules. Members in default can only vote for Special or Unanimous Resolutions. 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).

​Contact Conveyancing Division 
Get Transfer Costs Quotation
Download Free Offer to Purchase 

The common property is owned jointly by all the owners of units within the scheme. Collectively, these owners are known as the Body Corporate. 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 exclusive use areas, these areas 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, restrict the type of fence or wall erected around a garden, or prevent the installation of a pool or spa bath without the consent of the trustees or the other members of body corporate.

Often this will be a garden, patio, or parking bay, but may also be a garage or storeroom, that the owner does not own but will have been granted exclusive use. There are several ways that exclusive use areas can be created and protected. Under the 1971 Act, these areas were usually created under the Schedule I rules of the scheme. When the current Act came into effect in 1988, a more sophisticated way of creating exclusive use was introduced, resulting in registered exclusive use areas, deemed to be real rights, capable of being bought, sold and bonded.

In the opinion of many property practitioners, this method was too sophisticated for general use, resulting in an amendment to the current Act that introduced exclusive use areas created under the current rules. Please note that exclusive " use areas created under rules do not enjoy the same status as registered exclusive use areas. However, for most purposes, the method is adequate and much cheaper to implement. Registered exclusive^ use areas will be shown on the sectional plan, while those created under the rules will be reflected in the rules of the scheme. Developers and bodies corporate can choose either method to create exclusive use areas.

It is very important for a purchaser to establish exactly what he or she is buying before committing to the purchase. If it is not shown on the plan or in the rules, it probably does not exist! The Sectional Title Buyer's Checklist, which is included in this booklet, covers all the major points.

The common property comprises those parts of the scheme that do 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 may be designated as exclusive use areas.

In buying into a scheme, a purchaser acquires a Section (or sections), and an undivided share of the Common Property. These are collectively known as a Unit. A section in a residential sectional scheme is usually a flat or townhouse, but may also be a garage, domestic staff room or external storeroom. In many schemes, the garage and external rooms are not sections, but are parts of the common property of which individual owners have 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. The outer walls, roof, space above the ceiling and foundations are not part of the owner's section.

Yes and no! Sectional Title is the name given to this form of ownership in South Africa. In other parts of the world sectional ownership is known by other names, but many of the basic principles are similar.

A Sectional Title Development Scheme (usually referred to as a Scheme) provides for separate ownership of sections of a property by individuals. These schemes fall under the control of the Sectional Titles Act, No 95 of 1986, which came into force on 1 June 1988. It is the Act under which an individual can hold Title to a Section of a building. This Act replaced an earlier Act (No. 66 of 1971).

On becoming an owner of a unit in a sectional title scheme, a purchaser is automatically bound by the scheme’s existing rules, whether or not these suit his circumstances.   Prospective purchasers are therefore well advised to ask for and study the rules of the scheme prior to putting in an offer.
There are two types of rules applicable:

1.  management rules, which govern the administrative functioning of the body corporate. These can only be changed by unanimous resolution; and
        
2.   conduct rules, which govern the behaviour of owners and tenants in the scheme and deal with issues such as pet ownership, refuse disposal and vehicles.  These can only be changed by special resolution.
   
   Contact Conveyancing Division 
   Get Transfer Costs Quotation
   Download Free Offer to Purchase