Writing in the September 2005 De Rebus, Tertius Maree outlines his reasons for wanting a uniform code for developers when it comes to administrative structures for complex owners' associations.
Developers and attorneys generally assume that once the founding documents of a scheme have been dealt with, owners of the units will be in a better position to adapt their constitution to their particular needs at a later stage. Unfortunately this is not so, as a combination of naïvety on the part of the owner and the practical difficulties of changing an existing constitutional structure are often underestimated. These problems have become more urgent with the exponential increase in new schemes recently.
The writer then looks at the applicable statutory provisions, such as the:
- Sectional Titles Act 95 of 1986 which applies to all developments with a sectional title element;
- Various provincial ordinances as they existed before 1994, including later amendments which apply where freehold elements are involved;
- Housing Development Schemes for Retired Persons Act 65 of 1988 applies in addition to other legislation if the scheme is intended for retired persons;
- Share Blocks Control Act 59 of 1980 is also sometimes relevant;
- Companies Act 61 of 1973, if the owners' association is founded as a section 21-company; and
- Deeds Registries Act 47 of 1937 applies to all schemes to a lesser or greater extent.
In suggesting a solution Tertius Maree feels that given the uncertainties which exist among developer, practitioners, managers and owners, and the resultant exploitation of 'housing consumers', the legislature should draft legislation in the nature of a uniform protocol for the development of housing schemes. Such a code should:
- provide a framework for structuring constitutional documents for owners' associations, including complex schemes, irrespective of the statutory vehicle selected;
- resolve ambiguities and clarify and amplify provisions in existing legislative instruments;
- set uniform standards for the formation of such associations to clarify the present provincial diversity and to improve upon inadequacies;
- provide for the compulsory issue of a prospectus by the developer in respect of each new scheme, containing prescribed information, certified by the professionals involved; and
- establish liability for developers who fail to comply with set standards.