A GUIDE TO THE NEW SECTIONAL TITLE SECTIONAL MANAGEMENT ACT

A BRIEF BACKGROUND

We refer to the various phases of our history in Sectional Title as "Generations".

There are 3 Generations, all modelled on the Strata Titles Act 17 of 1961 in New South Wales, Australia.

First Generation:	Sectional Titles Act Promulgated 30 June 1971 Effective 30 March 1973
Second Generation:	Sectional Title Act Promulgated 17 September 1986 Effective 1 June 1988
Third Generation:	Sectional Title Schemes Management Act Promulgated 11 June 2011 Effective 7 October 2016 Community Schemes Ombud Services Act Promulgated 11 June 2011 Effective 7 October 2016

Reasons for the Third Generation initiation:

Consumer complains to the Department of Land Affairs, going back to 1987, regarding disputes within schemes resulted in consultants being appointed to investigate alternative methods of dispute resolution, and a more streamlined, easier to understand drafting of a new Act. Work has consistently been undertaken over the last twenty years to understand and interrogate overseas legislation in Singapore, Australia and Israel, resulting in the two new Acts becoming effective in October last year.

Community Schemes Ombud Services (CSOS) Act and Regulations

CSOS mandate and aims:

• To house corporate governance documentation (rules, plans).
• To attend to alternative dispute resolution, providing a mediation and adjudication platform.
• To provide nationwide education programmes and campaigns about CSOS functions.

What is a Community Scheme?

• Sectional Title Scheme
• Homeowners' Association
• Shareblock Building
• Retirement Village
• Gated Village with a Constitution
• Social Co-operatives

This definition is really broad and will, in future, include other communal arrangements which are within the discretion of the Ombud to decide upon.

The functions of the Ombud Service

• To develop and provide a dispute resolution service;
• To train conciliators, adjudicators and other employees of the Service;
• To regulate, monitor and control the quality of scheme governance documentation; and
• To take custody of, preserve and proved access electronically or by other means to scheme governance documentation.

In performing its functions, the Service -

• must promote good governance of community schemes;
• must provide education, information, documentation and such services as may be required to raise awareness to owners, occupiers, executive committees and other persons or entities who have rights and obligations in community schemes, as regards those rights and obligations;
• must monitor community scheme governance and;
• may generally, deal with any such matters as may be necessary to give effect to the objectives of this Act.

To promote good governance, regulation 14 of the CSOS Regulations obligates a scheme executive:

• To take reasonable steps to inform and educate himself or herself about the affairs and activities of the scheme and the legislation and governance documentation in terms of whichthe scheme operates;
• To take reasonable steps to obtain sufficient information and advice about all matters to be decided by scheme executives to enable him or her to make conscientious and informed decisions;
• Unless excused in writing by the chairperson on reasonable grounds, to attend all scheme executive and annual meetings; exercise an active and independent opinion with respect to all matters to be decided by the scheme executives; and to exercise due diligence in relationto any business of, and necessary preparation for and attendance at meetings of, the scheme executives or any committee to which he or she was appointed.

Financial support of CSOS

• Funds from Parliament or other Organs of State
• Levies collected from Community Schemes
• Fees for documents
• Loans
• Donations

How much must each unit pay?

The CSOS levy is charged to the scheme. The scheme must pay over the levy as one lump sum every quarter, and recover from the owners. The owners, if applicable, may have an arrangement that the tenant pays the CSOS levy.

In terms of the Regulations, the levy charged on each unit in a community scheme is the lesser ofR40 or 2% of the amount by which the monthly levy of a particular unit exceeds R500. So, the levy can never exceed R40 per month.

The fee payable to the Ombud Service is R50 per application for dispute resolution, R100 for adjudication of the dispute, and R8 per copy of any scheme governance documentation. There are waivers of these amounts for certain individuals who do not fall within an earning bracket set by Regulations.

Types of disputes to go to the Ombud Service

Financial, behavioural, scheme governance issues, general meetings, management services, works pertaining to private and common areas.

The Ombud will want to know, upon receipt to the application whether or not internal dispute resolution processes have been conducted. Then, he may refer the matter to mediation / conciliation.

If there is no prospect of success at conciliation, the Ombud must refer the matter to adjudication.

The Adjudicator must:

• Grant or reject each part of the relief sought;
• Apportion liability of costs;
• Include a statement setting out the reasons for the order;
• Emphasise the right to appeal

The Order that he makes can be made an Order of the Magistrates' Court or High Court.

An Applicant or a Body Corporate can appeal in the High Court if dissatisfied with the judgment, but only on a question of Law. The appeal must be lodged within 30 days of the date of delivery of the Order of adjudication.

Interesting facts:

1. The Adjudicator can ask the South African Police Service to assist, if he is refused access to carry out an inspection at a unit.
2. Any owner or tenant can write to the Ombud and apply to receive he adjudication, Orders which have been made for the last 6 years.
3. What if an owner or a Body Corporate (Trustees) fails to provide access to books, or fails to comply with a directive of CSOS?
   He / Trustees will be guilty of an offence and will be liable, on conviction, to a fine or imprisonment of up to 5 years. On a second offence, the prison term goes up to 10 years.
4. Every community Scheme must insure against the risk of loss of money belonging to the Scheme, sustained as a result of any act of fraud or dishonesty committed in any way. The minimum amount cover in respect of this Fidelity Fund insurance is the total value of reserves and investments at end of the financial year and 25% of the Community Scheme's
5. Operational budget for the current year.

Sectional Title Schemes management Act 8 of 2011

Main changes and innovations

The old Act contained 61 Sections, as opposed to the new Act which contains 22 sections. The consumer related portion of the old Act was moved into the new Act, leaving the conveyancing related aspects behind in the old Act, which is still in operation. The wording in the new Act is less draconian in that ' may' is used more often than " shall" and " must". The rationale behind the drafting of the new Act is to simplify and streamline.

1. Definitions

   • Addition of 'Chief Ombud'.
   • Replacement of Sectional Titles Regulations Board with 'Advisory Council'.
   • Unanimous resolution - all members who cast their votes must do so in favour. This means that a unanimous resolution may be vetoed by and abstention.

2. Functions of the Body Corporate

   Normal Levy Fund

   Prior to the new Act, the Body Corporate had to establish an administrative fund which; in its opinion would be sufficient to cover the annual operating expenses of the scheme. The mew Act has changed the wording to say that the Body Corporate must establish and maintain an administrative fund reasonably sufficient to cover the estimated annual operating cost of the scheme.

   Reserve Fund

   This is new and should be embraced by the industry. The Body Corporate must establish and maintain a reserve fund which is not less than amounts prescribed by the Minister in the Regulations.

   In my experience, many Trustees operationally manage their buildings very well and have always catered for a "buffer" fund. However, an inordinate number of Trustees find themselves in financial difficulty with the building run from "hand to mouth" on a monthly basis. This reserve fund will ensure that a building does not fall into disrepair, and that the Body Corporate at every Annual General Meeting puts its mind to the Collection of monies for this fund, and the maintenance plans for the building.

   Levy Collection

   The Ombud can be approached to resolve disputes, however, parties may still proceed to Court of private arbitration.

3. Powers of the body Corporate

   A Body Corporate can:

   Purchase, sell, mortgage, hire or let units	- SPECIAL RESOLUTION
   Borrow money required for performance of its functions	- SPECIAL RESOLUTION
   Lease common property (Less than 10 years)	- SPECIAL RESOLUTION
   (More than 10 years)	- UNANIMOUS RESOLUTION
   Purchase additional land	- WRITTEN AUTHORISAITON OF OWNERS
   Delineate a registered Excusive Use Area	- UNANIMOUS RESOLUTION
   Create Exclusive Areas through the Rules	- UNANIMOUS RESOLUTION (If created through Management Rules) - SPECIAL RESOLUTION (If created through Conduct Rules)

4. Meeting of Bodies Corporate

   1. Unanimous resolution
   • A notice which proposes a unanimous resolution may also be sent by email or fax.
   • Importantly, a unanimous resolution which would have an unfairly adverse effect on any member is not effective unless that member consents thereto, in writing, within 7 days from date of the resolution.
   • A Body Corporate or owner who is unable to obtain a unanimous resolution, may approach the Chief Ombud for relief.

5. Proxies

   Aproxy is not allowed to act for more than two members at a general meeting.

6. Votes

   When calculating in number, each member has one vote.

   When voting for majority decisions, you can only vote on value, not number.

7. Trustees

   With regard to the, fiduciary relationship with the Body Corporate, a Trustee is obligate to notify the other trustees of the nature and extent of any direct or indirect material interest in any contract of the Body Corporate , as soon as he or she becomes aware of such interest, instead of "at the earliestopportunity practicable."

   There is a definite tightening up on Trustee liability. Before the new Act, there was an indemnity which protected Trustees, apart from two instances. The first, where there was gross negligence and the second where there was a conviction for fraud. Now, with the new Act, the Trustees are still indemnified, but, if they breach their fiduciary duty in any way, they could be sued. The exclusion to the indemnity is no longer limited to fraud and gross negligence. So, action can be taken for any loss that the Body Corporate suffers, or any economic benefit received by the Trustee.

8. Rules

   Any amendments to Management or Conduct Rules must be approved by the Chief Ombud, afterthe necessary Body Corporate resolutions have been taken. Once approved, the Chief Ombud must issue a certificate to that effect.

   You can still create Exclusive Use Area through the Rules in terms of Section 10(7). The new Act simply clarifies that Conduct Rules can be utilised to create the Rules. In the case where there is a failure to secure a special or unanimous resolution, the affected owner or Body Corporate, can approach the Ombud for relief.

9. Duties of Owners

   An owner had to notify the Body Corporate of any change of ownership or occupancy in his unit.

   Owners may, by written consent of all the other owners, use their sections or Exclusive Use Area for another purpose. If an owner considers a refusal by other owners as unreasonable, he / she can apply to the Ombud for a decision.

10. Insurance by Owners

    A major innovation stipulates that an owner may not obtain an insurance policy in respect of damage arising for risks covered by the policy of the Body Corporate. This obviates cases of doubleinsurance.

    Trustees must obtain valuations every three years.

11. Appointment of Administrators

    An Applicant may apply to a Magistrates' Court instead of to the High Court for the appointment of an administrator. The Ombud would oversee the administration and would receive reports every three months.

Sectional Title Schemes Management regulations

Main changes and innovations

Definitions

The new definitions include "primary section", and "utility section".

"Primary section" is defined as a section designed to be used for human occupation as a residence, office, shop or factory.

"Utility section" is defined as section, which, in terms of by-laws, is designed to be used as an accessory to a primary section, such as a bathroom, toilet, storeroom, parking bay, parking garage, domestic worker's unit.

Reserve Fund

The regulations set out the calculation of the contribution to the find as follow:

• If at the end of the financial year, the money in the reserve fund is less than 25% of the total contribution for the last financial year to the normal levy fund, then the budgeted contributionof the reserve fund must be at least 15% of the total budgeted contribution to the admin fun.
• If the money in the reserve fund is more than 25% but less than 100%of the total contributions to the normal fund for that previous year, the budgeted contribution to the reserve fund must be at least the amount budgeted to be spent from the normal fund on repairs and maintenance in the financial year being budgeted on.
• If the amount in the reserve fund is equal or greater than 100% of the total contribution to the normal fund, then no contribution is necessary.

Insurance Risks

Quite a few words have changed:

• First, the reference to "fire" in old the Rules is replaced by "smoke".
• Storm, tempest and flood" are replaced by "storm, tempest, windstorm, hail and flood".
• Subsidence" is included with "earthquake".
• Addition of "impact by aircraft and vehicles".
• The words "water escape" come before "bursting or overflowing of water tanks, apparatus or pipes."

Management Rules

Annexure 1

Main changes and innovations

Rule 2 - Terms of reference

New definitions include 'Executive Managing Agent.' Interesting to note that the definition of an "accounting office" has been omitted. Every Body Corporate, however small, will have to be audited in future.

Rule 3 - Binding Nature

Tenants and occupiers eg: guests, visitors and family members are bound by the Conduct Rules, and a member of the Body Corporate i.e.: the owner, must take all reasonable steps to ensure that his occupants stick to the Rules.

Rule 4 - Service Address

Trustees can designate a fax, e-mail or other address as an alternative service address of the Body Corporate. A change of service address must be lodged with the Community Schemes Ombud Service.

Rule 5 - Number of Trustees

If a scheme consists of 1, 2 or 3 owners of primary sections, each person is considered to be a Trustee. If a scheme consists of more than 4 owners, they can elect how many Trustees. A loophole in this Rule does not cater for where there are exactly 4 owners.

Rule 6 - Requirements for office and disqualification Non-owners can be Trustees. There is now also no requirements that the majority of Trustees must be owners or spouses of owners.

A Managing Agent his employee, or an employee of the Body Corporate may not be a Trustee unless they own a unit in the scheme.

The new Act specifies two new instances where a person automatically ceases to hold office as a Trustee:

1. Where he is sentenced to imprisonment without the option of a fine;
2. Where he is removed from an office of trust on account of misconduct in respect of fraud or misappropriation of money.

Rule 7 - Nomination, election and replacement of Trustees

Even if you, as an owner, are in arrears with your levies, or in breach of the Conduct Rules, you can now nominate a Trustee or be appointed as a Trustee.

Rule 8 - Reimbursement, remuneration and indemnity

Trustees can be reimbursed for disbursements actually and reasonable incurred by them in the course of carrying out their duties.

When it comes to salary, whether monetary or otherwise, owners can only receive this benefit as Trustees if there is a determined special resolution.

Non-owner Trustees can receive a salary, whether monetary or otherwise if an ordinary resolution of the Body Corporate is approved as part of the budget.

Rule 9 - General Trustee duties and powers

A great innovation is that the Trustees must, for the purpose of transparency, distribute the Minutes of general and Trustee meetings to all persons entitled to notice of the meeting, not later than 7 days after the date of the meeting. Before the new Act, Minutes were only made available for inspection on written application of an owner or registered mortgages.

Rule 10 - Validity of actions of Trustees

Re-enacted.

Rule 11 - Calling of Trustees' meetings

The Trustees must give a Trustee absent from the Republic 7 days' notice if a meeting is to be arranged by telephone or any other method.

Who can attend a Trustees' meeting has always been a common question. With the new Act, owners, registered bondholders, holders of future development rights and Managing Agent, may in principle, attend and speak at Trustees' meetings, but they are not allowed to propose a motion or vote. However, they may not attend those parts of the Trustees' meeting that deal with:

1. discussions on the contravention of the STSMA or the Rules;
2. any other matters in respect of which the Trustees resolve that the presence of such persons would unreasonably interfere with the interests of the Body Corporate or any person privacy.

The Rules have also been modernised to allow for meeting by phone or other method, as lone as it is accessible to all, and the identity of all participants can be confirmed.

Rule 12 - Chairperson

Where you have 2 owners only in the Body Corporate, the election and functions of a Chairperson do not apply.

Rule 13 - Quorum at Trustees' meetings

The change here is that if a quorum of 50% in number is not present at a Trustee meeting within 30 minutes of the appointed time, the Trustees present must adopt interim resolutions with will become final at the next Trustee meeting where there is a quorum, or by written resolutions signed by all the Trustees.

Rule 14 - Voting and resolutions at Trustees' meetings

Trustees must adopt a resolution by majority. The motion need not be seconded. The vote of a Trustee who abstains does not count.

Rule 15 - General meeting of Owners

Who receives notice? :

• Owners at their service address:
• Registered Bondholders; whether or not they have noted their interest;
• Future development right holders.

Trustees can call a General Meeting on 7 days' notice instead of the standard 14 days' notice, if there is an urgent resolution needed. For important things like alterations or improvement to common property or the installation of pre-paid meters, 7 days' notice will not suffer.

Anew sub rule in Rule 15 specifies that these documents must accompany the notice:

1. Agenda (in proper format);
2. Copies or summaries of documents that must be considered or approved by members at the meeting;
3. A proxy appointment form.

Rule 16 - First General Meeting (commonly referred to as " The Inaugural meeting")

Any contracts entered into by the Developer on behalf of the Body Corporate must be ratified by the Body Corporate. This item must be on the agenda. The Developer has no vote on this issue. Before the new Act, the contracts had to be ceded to the Body Corporate. There is also an increased responsibility on the Developer to furnish the Body Corporate with building plans, encroachment permits, plans showing the location of al pipes, wires, cable and ducts, even names and addresses of all contractors and persons employed by the Developer.

The 2 year prison sentence, or the payment of a fine if a developer fails to call a meeting, remains in place of the new Act. Remember that the Body Corporate can call the meeting if the Developer does not, and can recover the costs reasonably incurred from the Developer.

Rule 17 - Annual General Meetings (AGM)

Three interesting changes here. The first is that if a new development is registered after 7 October 2016, the financial year run of that specific building is the first day of October to the last day of September of the following year, unless otherwise resolved in a Body Corporate.

Owners can waive the obligation to call an AGM if at least one month before the end of financial year end all owners agree and consent in writing to motions that deal with items of business at the AGM. The Body Corporate may organise attendance at an Annual or Special General Meeting by telephone or other method.

Rule 19 - Ouorum

For: 1, 2 or 3 primary sections, the quorum will be constituted by the attendance of members entitled to vote and holding 2/3 of the total votes of all member in value.

For 4 and above primary sections, the quorum will be constituted by the attendance of members entitled to vote and holding 1/3 of the total votes of members in value.

NB: The developer cannot be taken into account in determining a quorum, nor can a primary section owned by the Body Corporate.

Rule 20 - Voting

New change is that a motion at a general meeting need not be seconded.

Ordinary resolutions i.e.: 51% must be adopted by the majority of votes calculated in value.

Members cannot vote for an ordinary resolution if they owe money or breach rules after a Court has given judgment, or an adjudicator has ordered payment of that amount.

They can still vote for a special or Unanimous Resolutions.

Rule 20(5) - Proxies

A really important change in the new Act is that a person must not act as a proxy for more than 2 members.

Rule 20(9) and (10) - Special Resolutions

If a special resolution is passed at a General Meeting by members holding less than 50% of the total value of all members' votes, the Body Corporate must not implement the resolution for 7 days after the meeting unless the resolution is urgent and it could be agreed that safety would be compromised or there would be significant loss to the scheme.

If within that 7 day period, owners holding at least 25% of the total votes in value by written request require that the Body Corporate hold a Special General meeting to reconsider the resolution, then, the resolution cant be implemented unless it is again passed by Special Resolution or a quorum is not present within 30 minutes of the time set for the meeting.

A better explanation by way of example:

• There are 10 units in the scheme each having the same floor area.
• An SGM is called to pass a Special Resolution and the minimum quorum is present at 33.3% - round up to 4 members.
• The Special Resolution is passed, which is 75% of 4.
• Therefore only 3 members need to vote in favour of the resolution for it to pass.
• Now, in terms of Management Rule 20(9), less than 50% of the members have successfully passed the Special Resolution.

The Rule give the owners a "second bite at the cherry" so to speak, by postponing implementation to give more owners a chance to re-group.

Rule 21 - Functions and Powers of the Body Corporate.

1. Prior to the new Act, the Body Corporate could not make loans from its own funds. Now the Body Corporate requires a unanimous resolution to do so.
2. New interest rate on collection of arrear levies is the maximum rate set by the National Credit Act. As at today's date it is 26,45%. You will need a Trustee resolution.

Rule 22 - Maintenance, Repair and Replacement Plan

Completely new innovation which states that the Body Corporate must prepare a written maintenance, repair and replacement plan. The plan must set out:

1. The major capital expenses expected to require maintenance, repair and replacement within the next 10 years.
   These are: Wiring, lighting and electrical systems, pluming, drainage and storm water, heating and cooling systems, lifts, carpeting and furnishing, roofing, interior and external painting and waterproofing, communication systems, parking, roads, paved areas, security systems, communal and recreational facilities.
2. The plan must set out the present condition of those items.
3. The timeline for repair.
4. The estimated cost, the expected life of the items once maintained repaired or replaced.
5. Maintenance repair, replacement plan formula annually is:
   Estimated cost - past contribution
   Expected life
6. The plan must be reported on at every AGM.

Rules 23 - Insurance

New innovations are that the Exclusive Use Area is now taken into account in specifying replacement values. The Body Corporate must obtain replacement valuations of all buildings every three years, and must take out public liability insurance for not less than 10 million.

Rule 24 - Admin and Reserve Fund

This rule clarifies the difference between the Admin and Reserve Fund

The Admin fund is used to fund the operating expenses of the Body Corporate for a particular year. Money paid out is according to budget and Trustees' resolutions.

The reserve Fund must be used for the implementation of the maintenance, repair and replacement plan of the Body Corporate.

Monies going into the reserve fund are:

1. Part of annual levies designated for reserves or the MRR Plan.
2. Any amount received under an insurance policy for damage to property for which the Body Corporate is liable.
3. Interest on the fund.

Monies going out of the reserve fund:

1. Payments in respect of the Maintenance, Repair and Replacement plan.
2. Payment in respect of urgent maintenance and repair.

Rule 25 - Contributions and Changes

An owner in arrears must pay to the Body Corporate, all reasonable legal costs and disbursements as taxed or agreed with that owner. Same situation applies to an owner not complying with the rules.

No account can be debited with fees or penalties without the owner's consent, unless, there is a judgement, or award. The Body Corporate is obligated to make available a full and detailed account of all amounts debited and credited to that member's account within the Body Corporate.

Rule 26 - Financial Records

Separate books must be kept for the admin and reserve funds. The Body Corporate will have to present more detailed annual financial statements at its general meeting.

In order to encourage earlier payments, such budgets in respect of the admin fund, may include discounts not exceeding 10 percent of a members' annual contribution applicable if all those contributions are paid on or before the due dates.

Books of account and record must be retained for a period of 6 years after completion of the transaction to which they relate. In the old Act it said that minute books must be retained for as long as the scheme remains registered. This has now been omitted.

Audit - The Body Corporate must:

Present audited financial statement to a general meeting within four months of the financial year end.

The audit must be carried out by an independent auditor, and the new wording states that it need not be carried out in accordance with any recognised financial reporting framework of guidelines for financial accounting. There is also no longer reference to an accounting officer.

Rule 27 - Governance documents and records

This rule serves to comprehensively improve the record keeping of a Body Corporate.

1. The Body Corporate must:
   1. Lodge a notification of an amendment to the scheme's rules with the Chief Ombud in the prescribed form within 10 days after the date of the relevant resolution.
   2. Compile and keep a complete set of all scheme rules:
   3. Prepare a consolidated set of rules whenever they are amended.
2. The Body Corporate must update the following records:
   1. Minutes of general and trustee meetings;
   2. Lists of trustees, members and tenants;
   3. Lists of sections shown on the sectional plan, exclusive use areas, and registered bondholders;
   4. Details of all future development right;
   5. Any other records prescribed by regulation.
3. The Body Corporate may obtain and keep a long list of other documents inter alia sectional plan, resolutions dealing with changes to common property, consents and approvals, written contracts, decisions of an adjudicator, magistrate or judge, insurance policies, income tax returns.
4. On the written request by a member, registered bondholder or a person authorised in writing by them the Body Corporate must make any of the records and documents available for inspection, and provide copies thereof within 10 days and in the case of Rules within 5 days. A fee covering costs may be charged for all copies except for scheme rules.
5. On termination of the contract of a managing agent, that person must within 10 day deliver to the Body Corporate all records in his or her possession.
6. All records referred to above must be in writing or in a form that can be easily converted to writing.

Rule 28 - Executive Managing Agents / Ordinary Managing Agents

A brand new concept of the " Executive Managing Agents" has been included in the Rules. Distinguishable from an ordinary Managing Agent, the Executive Managing Agent actually steps into the shoes of the Trustees, has an extremely onerous fiduciary duty, and is liable for any loss suffered by the body Corporate as a result of not applying care and skill.

The Body Corporate, may upon special resolution appoint an executive Managing Agent.

Or

25% of the owners in value can force an appointment.

Ordinary Managing Agent

• Appointment by an ordinary resolution or by a registered mortgagee holding 25% in number of primary section.
• A management agreement may not endure for more than 3 years.

How do you cancel a Management Agreement

One of two ways:

Give 2 months' notice on the back of a special resolution of the Body Corporate.

Or

The Trustees or the Body Corporate may by ordinary resolution cancel the agreement in accordance with its items.

Rule 29 - Alterations or improvement to Common Property

The word " alterations" have been included in the rule. The terminology of luxurious and non- luxurious improvement is no longer used.

Now, we speak about not reasonably necessary (old luxurious), and reasonably necessary (old non- luxurious). With the reasonably necessary alterations, you will follow the same process as the oldAct.

Pre-paid meters have occasioned the creation of a new rule, which says that the Body Corporate may with a special resolution install separate pre-paid meters on the common property to control the supply of water or electricity to a section or Exclusive Use Area. Owners must be given 60 days' notice of the resolution with specific details about the cost, including the estimated effect of the cost over 3 years.

Rule 30 - Use of sections

Very important new wording: " The Body Corporate must take all reasonable steps to ensure that a member or other occupier does not do anything to a section or exclusive use area that has a material negative effect in the value or utility of any section or exclusive use area."

Also: a bold move in respect of Exclusive Use Areas -

The Body Corporate may by ordinary resolution give consent for a structure or building improvement if they are satisfied that it does not require other compliances e.g.: from council. This will help when owners wish to enclose balconies. Conditions will be attached to the ordinary resolution.

Rule 31 - Obligation to maintain

This rule only refers to sections. It used to refer to exclusive use area too in the old Act. Not sure what has occasioned the omission?

If despite written demand by the Body Corporate, and owner refuses to :

1. Carry out work in respect of his or her section ordered by a competent authority, or
2. Repair or maintain a section owned by that owner in a state of good repair,

and that failure threatens the stability of the common property, the safety of the building or otherwise materially prejudices the interests of the Body Corporate, the Body Corporate must remedy the owners failure and recover the reasonable cost of doing so from the owner. No notice at all is required if there is a case of emergency.

Conduct Rules

Annexure 2 Rules

Main changes and innovations

Rule 1 - Keeping of Animals

A great innovation is that Trustees are deemed to have given their consent for guide dogs, hearing or assistance dogs to reside with their owners and to accompany them on property.

Rule 2 - Refuse and Waste

Does not really take the Rule further apart from adding that the owner / occupier must not in disposing of refuse adversely effect the health, hygiene or comfort of owners.

Rule 3 - Parking of vehicles

The towing has been removed, and the reference to not allowing dripping of oil or brake fluid has been removed.

Rule 4 - Damage to Common Property and installation of locking devices and screens

The addition in this rule is that an owner may not, without Trustees, written consent damage or deface a structure.

Also, an owner now has Trustees' deemed consent to install a locking or safety device to protect the section against intruders, or a screen to prevent entry of animals or insects. The device must be consistent with specifications given by the Trustees, and the owner must keep the device in good order and repair.

Rule 5 - Appearance of section and Exclusive Use Area

The external appearance of a section or exclusive use area cannot be changed without Trustees' written consent.

Rule 6 - Storage of flammable materials

Trustees must give written consent for non-domestic flammable substances to be stored in a section or on common property.

Rule 7 - Behaviour of owners, occupiers and visitors

This is a brand new Rule which says that an owner or occupier of a section must not create noise and must take reasonable steps to ensure that their visitors do not behave in a way likely to interfere with the peaceful enjoyment of another section or another person's peaceful enjoyment of the common property.

Undoubtedly, the increase in behavioural issues in Sectional Title Schemes has prompted this additional Rule.

This was compiled by Marina Constas of BBM Law.

CV of Marina Constas

Marina Constas graduated from the University of the Witwatersrand in 1992 with a BA LLB degree. She became an Associate of the Association of Arbitrators in 2001, and was registered as a Fellow of the Association in 2002. She is a Director of BBM Inc Attorneys, and heads up the Sectional Title Property Department in every branch office, Houghton, Bedfordview, Cape Town, Umhlanga and Pretoria.

Marina is a specialist Sectional Title attorney, and has become a household name in the Industry having coauthored two editions of the bestselling book - "Demistifying Sectional Title". She gives talks and seminars to Owners, Trustees, Managing Agents and Estate Agents around the country, and has an excellent reputation in her field. She is a regular on Radio 702's, "Hot Property" feature, as well as on Summit TV's - "Ask the Experts Property Show."

In 2011, she received a Certificate from the National Association of Managing Agents for her years of dedication and loyal contribution to the Sectional Title Industry. In March last year, Marina was appointed to the Community Schemes Ombud Service Board as a result of her expertise and ability to make a valuable contribution.