Sectional title Q&A

Prof. Graham Paddock, a sectional title expert, answers some tricky questions on various issues relating to sectional title living.

Changing rules about pets

Q: A scheme has a conduct rule that limits each owner to two pets. The owners wish to change this so as to exclude cats, for various reasons associated with nuisance experienced in the scheme in the past, but they do not want to take away the rights of existing cat owners to keep those cats until they pass away. Is this allowed?

A: Yes, it is possible to include a "grandfathering" provision in a new rule, allowing the people who are currently keeping cats to keep those animals but not allowing new ones to be brought in. The new rule should be carefully drafted to make the position very clear and cater for some form of identification of the current animals that will not be affected by the provision.

(Thanks to Cheryl Sol for her question in this regard on Sectional Titles Online -www.sto.co.za)

Charging for Future Development Areas

Q: How should the body corporate calculate the quasi levy payable by the developer on demand to the body corporate in terms of Section 25 for the common property/vacant land on which he will build in phases?

A: The amounts, if any, payable in respect of the as yet undeveloped parts of the scheme are set out in the certificates lodged by the developer's conveyancer on opening the register. Here see section 25(2)(e) of the Act:

Quasi levies are payable in terms of section 25(5A) of the Act not for future development areas but in respect of additional buildings completed for occupation but not shown on a registered sectional plan 90 days later. The calculation is done as if the additional sectional plan was registered and the PQ schedules adjusted to take account of the additional section(s).

(Thanks to Swazi Coetzee for his question in this regard on Sectional Titles Online - www.sto.co.za)

Taking a unanimous resolution at an automatically postponed general meeting

Q: At a special general meeting called to amend the management rules there were not sufficient owners to satisfy the 80% quorum requirement. Under Prescribed Management Rule 58 can the meeting be continued a week later and then whoever is represented in person and by proxy can pass the resolutions provided there are no objections?

A: The answer to this query is no. Those owners who are present or represented at the continuation of that meeting a week later are not automatically a sufficient quorum to pass a unanimous resolution.

At the continuation of the adjourned meeting, while the quorum requirements are lowered for ordinary business, a unanimous resolution required to amend the management rules will still require a unanimous resolution - which has its own quorum requirement. To pass the required unanimous resolution 80% of all owners in the scheme (calculated both in number and in value) must be present or represented at the meeting.

(Thanks to Peter Griffith for his question in this regard on Sectional Titles Online - www.sto.co.za)

Subsidising Cost of Water

Q: Payment for water in our sectional title complex is based on readings taken from the main water meter, which measures the water consumed for the total complex. The problem is there are no attempts to limit water usage (garden sprinklers, underground irrigation, refilling pools) as the owners know that they are being subsidised by the other owners.

I have suggested that since there are only eight units in the complex and each unit has its own water meter located in an accessible area, it would be easy for one owner to read each meter once a month and the treasurer to issue an account to each owner. There has been resistance to this idea. Please advise how this problem has been resolved in other complexes. - Name withheld

A: Because there are separate meters for each unit, the body corporate can easily get all the information it needs to recover water costs on the basis of user consumption. The trustees should be making sure that this happens.

Minimum Age Restriction

Q: I bought in a sectional title complex opened in 1988. The rules state that no residence is allowed to anyone under the age of 50. I am 66 so it is not a problem, but of course when I want to sell my unit, the price reflects that it has this restriction, and therefore is worth 30 percent less than normal market value. As this seems to be discrimination against age, is it a legally enforceable rule? - George Fee

A: Yes, this type of rule is legally enforceable. The Housing Developments for Retired Persons Act, 65 of 1988, specifically caters for developments in which there is a restriction on occupational rights based on a minimum age of 50.

Maybe someone will pay more for your unit because they will be bothered by 'youngsters'?

Closing the Sectional Title Register

Q: Our body corporate was established in 1995 by the owner of a large house and property fronting on two roads. The owner built three additional smaller houses. The approximate land areas are 4810 square metres and 710, 640 and 100 square metres respectively. We each have our own land for personal use as per plan (walled or fenced) and we are responsible for our own land and building maintenance and insurance.

There are no common areas and we each have our own road frontage and entrance. As owners are now individually responsible for rates. The only shared service is water for which we each have a meter to calculate and allocate costs. No meetings are ever held or accounts produced. The Body Corporate has been registered for income tax but we have no earnings.

As we do not receive any benefit in being part of a body corporate can we de-register and assume individual ownership? If so, what would be the procedure and what type costs would be involved? – P. Broome

A: Normally, the high costs and delays involved in de-registering a scheme with buildings that are still useful mean that any initiative to "convert" to conventional ownership is abandoned.

There was probably a good reason this development was 'sectionalised' in the first place. It may be that a conventional subdivision was not practical or economic. I suggest you start by going to the local authority and checking whether four separate plots of the sizes indicated would be allowed. Next check the title deeds to see if there is any condition that would prohibit subdivision or separate ownership. If you need assistance at this stage, go to a town planner.

I cannot give you sensible estimates of costs. But bear in mind that the scheme will have to be terminated, the conventional land will then be vested in all four owners in undivided shares. They will then have to 'partition' their interests and take transfer from one another of the individual portions. The mortgage bonds over the sectional units would probably have to be cancelled and re-registered over the conventional plots.

If it all seems possible and all four owners agree in principle to support the process and pay their share of the costs, go to a conveyancer and a land surveyor and get some idea of the costs for the legal and survey work involved. If all the work can be given to one lawyer, you may be able to get substantial discounts on the tariff fees. But if any one owner refuses to cooperate, you will need to go the High Court for relief before being able to start the process. That will increase the costs very substantially and bring the risk that the Court may not authorise the process, in which case the costs will be wasted.

Prof. Graham Paddock is the head of specialist sectional title firm Paddocks. Visit their website at www.paddocks.co.za or www.sto.co.za.


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