Throughout the South African sectional title property industry, problems arise because body corporates are not aware of the extent of their functions and powers and often fail to exercise them as the law requires.
The powers held by sectional title body corporates are broader than most people realise and only a minority of the trustees of schemes exercise their powers to the full.
This is according to Johalna Minnaar, National Sales Manager for the Rawson Property Group, who says the Sectional Title Act 95 of 1986 defined the roles of body corporates. However, it is widely accepted in their sector that, although these are understood in principle, many members and their trustees lack in-depth knowledge of the laws to which they are supposed to be working.
The functions of a body corporate are generally better understood than the powers which they confer, says Minnaar.
These powers are:
1. To appoint agents and employees if they are necessary to the welfare of the scheme.
2. To buy or in other ways acquire and take transfer of mortgages, to sell units or to let or hire them out when necessary.
3. To buy, hire or acquire moveable property for the use of owners so as to enhance their enjoyment of the scheme and/or to better protect it.
4. To establish and maintain the scheme’s common property, lawns, gardens and recreational facilities for the benefit and use of all residents.
5. To borrow money where it is deemed necessary to improve the scheme’s ‘performance’.
6. To secure the repayment of any money owed to the scheme and the interest payable on it, particularly with regards to unpaid contributions and levies. The body corporate can also mortgage any property vested in it.
7. To invest any money paid into the scheme’s administrative fund for the repair and upkeep of the common property.
8. To enter into an agreement with local authorities for the supply of electricity, water, gas, fuel, sanitary and other services.
9. To enter into an agreement with any owner or occupant of a section for the provision of amenities or services by the body corporate to such people. This includes the right to let a portion of the common property to any such person.
10. To do all that is necessary to enforce the rules regarding the control, management and administration of the scheme.
These powers are broader than most people realise and only a minority of the trustees of schemes exercise their powers to the full.
Minnaar explains that rules regarding pets have been a headache for owners and tenants. In two recent cases, a sale was made with the house rules stating that pets are allowed ‘with permission’. This was obtained, but while the transfer was in process the body corporate reversed this decision and placed a ban on pets. This had huge repercussions as the owners bought the property on account of being allowed pets.
Minnaar explains that changes like these can only be made at board meetings and with a majority vote. "Most importantly, changes can only become effective once registered in the house rules of the scheme in the Deeds Office.”