When it comes to Sectional Title Schemes, even the most basic concepts are still widely misunderstood, starting with the Body Corporate and how it is formed, as well as its functions and powers. This misperception frequently leads to numerous problems and disagreements in Sectional Title Schemes that may have been easily avoided.
“Undergoing professional Body Corporate Management Training can clarify the roles and responsibilities of the Body Corporate, the Trustees and the Managing Agent and is something a sectional title property owner should consider. Training will cover the following concepts and more,” says Pearl Scheltema, CEO of Fitzanne Estates.
What is a sectional title?
A Sectional Title Development Scheme, usually referred to as a “scheme”, provides for separate ownership of a property, by individuals. These schemes fall under the control of the Sectional Title Schemes Management Act 8 of 2011 (the STSM Act) which came into operation on 7 October 2016.
When you acquire a unit in a scheme, you own the inside of the unit, which includes the space enclosed by the inner walls, ceilings, and floors. You have the right to paint, decorate, or alter your home as you see fit, if you don’t break any municipal bylaws.
What is the Body Corporate?
The Body Corporate is the name given to all the owners of units in a scheme. The term “units” usually refers to a development’s townhouses or flats. When the developer of the scheme transfers a unit to a new owner, the Body Corporate is formed. This indicates that the Body Corporate is made up of all registered owners of units in a scheme.
The Body Corporate members’ responsibility
The scheme’s day-to-day administration is delegated to Trustees selected by the Body Corporate. The Body Corporate makes major decisions on the scheme, usually during the annual general meeting (AGM) or a special general meeting (SGM). Issues affecting the scheme are discussed, budgets are approved, rules can be altered, and Trustees are appointed during these meetings. Each member of a Body Corporate has the right to vote at these meetings if they are not in arrears with their levy payments or are in serious violation of the regulations.
The Body Corporate exists to oversee and administer the scheme’s land and buildings. This means that the Body Corporate is responsible for enforcing the Sectional Title Schemes Management Act, the Scheme’s Management Rules, and the Scheme’s Conduct Rules. The Trustees are responsible for managing the Body Corporate’s funds, enforcing the regulations, and resolving conflicts to the best of their abilities, among other things.
Who are the Trustees?
Trustees are elected representatives of Sectional Title Scheme owners who are responsible for managing the scheme in good faith and in the best interests of the scheme. Their responsibilities are mandated by law and, as such, are legally binding.
The Trustees’ responsibility
The first level of responsibility resides with the members of the Body Corporate. They have a responsibility to elect and appoint fit and able Trustees who will act in the best interest of the scheme and its members, without prejudice or hidden agendas.
Trustees are elected at the annual general meeting (AGM) for the sole purpose of managing the Body Corporate’s affairs. This includes managing finances, appointing contractors, managing staff, enforcing the rules of the scheme and the maintenance of the common property.
In fulfilling their duties, they are obliged to adhere to the laws that govern sectional title living and to uphold the rules of the scheme. In addition, it is expected that they will act in a manner that is fair and reasonable and can never be seen to be biased towards any one party.
Poorly considered Trustees have no knowledge of sectional title laws or no intention of making a positive difference to the affairs of the scheme. For this reason, the nomination of Trustees must be well considered, and their appointment must be taken very seriously by the Body Corporate.
What is a Managing Agent?
Some Body Corporates mistakenly believe that by hiring a managing agent, they are essentially handing over control of their plan to the managing agency.
Managing agents should be clear about the obligations they are accepting, as well as those they are not.
The Managing Agent’s responsibility
The Managing Agent’s primary responsibility is to assist the trustees with administrative tasks such as levy invoicing and account payment. Their position is contractual in nature, and the trustees or members of the scheme can terminate it at any time.
The Trustees, not the Managing Agent, are responsible for the scheme’s management, contrary to popular belief. In some circumstances, the Managing Agent is responsible for more than just administrative activities; this should be clearly stated and included in the contract to avoid any misunderstanding. Before choosing a Managing Agent, the Trustees must negotiate the conditions of their working contract with them.
The value of professional Body Corporate Management Training
The management of a Body Corporate is a responsibility that falls squarely on the shoulders of the Trustees. With their knowledge and understanding of sectional title laws, the Managing Agent must guide Trustees when taking decisions that will affect the scheme and its members.
Are you a newly joined member of your Body Corporate or Homeowners association? We understand that it might be an exciting, but daunting task if you have not served on one before.
Fitzanne Estates offers comprehensive body corporate management training and guidelines as to what is expected of you as Body Corporate member, Trustee, or Scheme Executive through our unique training courses. Training courses range from introductory to advanced management.
Get in touch with us to book your training course today.
More about Fitzanne Estates
Fitzanne Estates (Pty) Ltd is a Property Management Company that can sufficiently administer your property investment to the benefit of the Landlord, the Body Corporate, and the NPC – Non-Profit Company. Services include Letting, Sectional Title Management, Full Title Management (NPC – Non-Profit Company) and Sales.
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This article first appeared here.
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