Sectional Titles

Courier – December 2010

These include:
Managing agents: Some do's and don'ts
A brief look at the functions and powers of managing agents
A discussion of what a managing agent may and may not do on behalf of his or her principal, the body corporate, may fill a sizeable chapter in a substantial book on sectional title management. Add to that what a managing agent must or should do, and you have the makings of an entire book.

For these reasons this article should be understood as a mere attempt to scratch the surface of the subject matter.

The functions and powers of a managing agent are chiefly determined by the provisions of the Standard Management Rules read with the provisions of the management agreement concluded with the trustees. Although SMR 46 purports to describe these powers and functions, it is by no means the only rule which impacts upon the activities of the managing agent.

Levy changes during a financial year
Once the members of a body corporate have approved the budget for the ensuing financial year at the annual general meeting, the trustees will usually determine the ordinary levies due by the members in respect of their sections by apportioning the approved budget to the members in accordance with the participation quotas of their sections. The trustees will similarly determine the additional levies due by the owners of exclusive use areas, by apportioning the amount required in terms of the budget pro rata to each owner, in accordance with the estimated expenses relating to his exclusive use area.

Although the Act and Management Rules is silent in this regard, certain transactions may take place in respect of the sections and/or exclusive use areas of a scheme during a financial year, requiring the registration of amended sectional plans. The registration of amended sectional plans and, where applicable, the amended participation quotas of sections, will inevitably require the recalculation of the levies due by the owners for the remainder of the financial year. The following transactions may take place during the financial year of the body corporate, which require the registration of amended sectional plans and the adjustment of the levies for the remainder of the financial year

How to hijack your AGM
I should probably not be writing this article. But then I thought I could probably provide some valuable insights to chairmen as to what they could expect (worst case scenario) and how they should prepare themselves for an annual general meeting.

I don't always understand why someone should purposefully disrupt an AGM but I can say from experience that it does happen fairly often.

So you attend the AGM and your main and only goal is to disrupt it. If the meeting is adjourned prematurely you have succeeded in your goal. The point of departure, your strategy, is to annoy the chairman or to make life so difficult for him (or her) that he (or she) loses his (or her) cool. We all know that once the red mists descend we tend to utter things we later regret. If the chairman has lost face in front of all the other members the battle is half won.

Trustees need to be wide awake at the time of unit sales
When a sectional title unit is sold and transfer of ownership is about to take place, trustees and managers need to be wide awake to ensure that the financial interests of the body corporate are secured.

At the time of registration of transfer the body corporate has a very secure, but once-off opportunity to ensure that all monies due to the body corporate in respect of the unit in question are fully paid. At this point in time the legal position regarding amounts due to the body corporate is stronger than even that of a bondholder. However, this remarkable advantage will only materialise if all necessary things are done meticulously to ensure payment.

The key provision of the Sectional Titles Act is section 15B(3) in terms of which no transfer may be registered at a Deeds Registry unless the Registrar is furnished with a certificate by the conveyancing attorney to the effect that all monies due to the body corporate have either been paid or that provision has been made for payment thereof to the satisfaction of the trustees

Bestuursagente se pligte ten opsigte van trustees se optrede
Vir 'n bestuursagent om konsekwent professioneel korrek op te tree ten opsigte van eise deur trustees gestel, is dikwels 'n nou en doringrige paadjie om te loop. Die feit van die saak is dat bestuursagente deur die trustees aangestel word en uit die aard van die saak wil bestuursagente graag hul kliënte tevrede stel en gelukkig hou. Alhoewel bestuursagente vandag oor die algemeen goeie kennis het van deeltitelreg en -administrasie, kan dieselfde ongelukkig nie altyd van trustees gesê word nie.

How does our National Constitution affect sectional title administration?
Section 33 of our national Constitution determines that everyone is entitled to administrative treatment which is lawful, reasonable, and conducted by means of fair procedures. Any person whose rights are harmed by such administrative action has a right to be furnished with written reasons.

Furthermore the Constitution requires that legislation be enacted to lend expression to the above basic constitutional right. In pursuance of this requirement, the Promotion of Administrative Justice Act (PAJA) was promulgated on 30th November 2000. This should not be confused with the Promotion of Access to Information Act (PAIA), which also has significant relevance to sectional title administration, and which will be discussed at a later date.

MCS Courier 38


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