Sectional Titles

Administrative structures

Following on from Owners' associations, this month (October 2005) Tertius Maree applies existing legislation to model acceptable administrative structures for complex owners' associations. Examples of complex structures include a combination of a freehold element (cluster housing) with one or more sectional title elements (schemes), to exploit certain common facilities and shared services.

The administrative structures that emerge are the following:

'Simple' contractual relationship
Such a situation would apply where a development consists only of two or more sectional title schemes and where it is sensible to leave the separate sectional title schemes substantially intact. Matters of shared interests, usage and responsibilities could be regulated here with a contract between the participating bodies corporate only, thereby avoiding the unnecessary complexities of an 'umbrella' constitution.

Multilateral management contract with or without provisions regarding usage and enjoyment
The management entity envisaged here is one specially set up for the purpose of the management of related schemes and is one step further than the simple contract. This model is also useful as an emergency measure in the event of the failure of a master association due to inadequate set-up procedures by the developer.

Master (servant) associations
Exist between several constituent elements of a complex scheme. Such complex associations could be endowed with the full powers of its constituent bodies, or with limited powers, leaving the constituent bodies with certain residual functions and powers. Because the sectional title body corporate and its members are subject to the provisions of the 'external' constitution of the master association, their management rules might have to be amended or repealed.

Master association with individual membership
Here every landowner and unit owner is an obligatory member. This type has disadvantages especially in large complex schemes that could lead to difficulty in reaching decisions quickly.

Master association with corporate membership
As an alternative to the last-mentioned model, a constitution could be considered in terms of which the constituent bodies are the members, rather than the individual owners. This option could considerably streamline decision-making and procedures for meetings. It makes it easier to deal with disagreements between various elements in the scheme objectively.

Residential versus commercial elements
Here one has to consider the separation of voting rights, special rules, and the apportionment of levies before the establishment of the scheme.

Voting and levies
Very important - does not fall within the ambit of this two part commentary, but should not be forgotten.

De Rebus website

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