Sectional Titles

MCS Courier - July 2012

Percentile levy adjustments: A pervasive pestilence
The widespread practice of allowing members at an AGM to conclusively fix levies by determining a percentage increase, although convenient and satisfying to everyone involved, flaunts the law.  It is necessary and correct to go through the budget item by item and make adjustments where they may be justified.  By not doing this body corporates risk under budgeting; failure to provide for future maintenance expenses and contingencies and more seriously this fatally flawed determination of levies will result in them not being recoverable in a court of law.

Learning to count
The various counting requirements in respect of quorums and voting for ordinary, special and unanimous resolutions can cause confusion.  Regarding special resolutions, Tertius Maree leans toward an interpretation that, when counting 'numbers' it must relate to the number of voting members and not the number of units held by them.  He relies on Prof CG van der Merwe's Sectional Titles, Share Blocks and Time-Sharing and the Sectional Titles Schemes Management Act No. 8 of 2011 which is due to take effect probably in September. 

Rules are rules - or are they?
Section 35 sounds simple, but in practice its implementation could hide many administrative errors, especially where bodies corporate have adopted special rules and not updated them with amendments by the legislature. A rule also has to have been made according to the directives of Section 35 to be valid and enforceable. The physical integrity of rules filed at the Deeds Registry are also not guaranteed, having in the intervening years become corrupted or completely lost.

Are fines lawful?
Doubts have been raised regarding the legality of fines raised against transgressors in sectional title schemes. The correct view is that before any fines may be imposed, a properly drafted rule, complying with the provisions of the Promotion of Administrative Justice Act must be adopted and the procedures set out in such rule must be followed to the letter.

Who has jurisdiction?
It is incumbent on the legislature to clarify the situation regarding the jurisdiction of Magistrates' Courts to recover arrear levies when the Sectional Titles Schemes Management Act and Community Schemes Ombud Service Act become effective. 

MCS Courier 41 July 2012

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