By Bennie van Dyk – Senior Operations Manager: Community Schemes Management
Living in a sectional title scheme can be frustrating if one does not understand the different roles and responsibilities of the members making up the scheme. A sectional title scheme consists of a legal entity called the body corporate. The body corporate comprises the respective unit owners in the scheme. Owners are called members. The members elect trustees to run the affairs of the body corporate between Annual General Meetings on behalf of them. The trustees, so elected, may opt to appoint a managing agent to assist with the administration of the affairs of the body corporate.
Unit owners in a scheme may decide to let their property. This can be done directly by the owner, or the owner may appoint a letting agent to do this on their behalf. However, the lease agreement is between the owner and the tenant and if a letting agent is involved, they are responsible for managing this relationship. It is the responsibility of the owner to make sure the tenant has a copy of the scheme’s rules and that he/she abides by these rules.
Tenants must report any maintenance issues related to the unit they reside in directly to the owner/letting agent to be attended to.
Members are responsible for the maintenance of the inside of their respective units. The outside of the units is usually part of the common property and maintained by the body corporate, unless there are specific rules identifying it as an exclusive use area, making it the responsibility of the owner. Members must report any maintenance issues to the outside of their properties immediately to the trustees/managing agent so that the necessary can be attended to timeously.
Owners should also ensure that they always keep their exclusive use areas in a good state and use their units for the purpose it was designed/intended for. Any improvements or extension should be applied for, and the correct procedures should be followed once approval has been granted.
Members have the responsibility to pay their monthly levies timeously in advance on or before the 1st day of each month to ensure sufficient cashflow for the day-to-day operations of the body corporate.
One should also practise good neighbourliness. When having a party, consider you neighbours. Abide by the rules of the scheme and convey these to your visitors and/or tenants.
Members also have to attend the general meetings of the body corporate and get involved. They should not wait for the Annual General Meeting each year but communicate with the elected trustees on a regular basis and offer to assist where necessary.
Trustees are elected each year at the Annual General Meeting and are nominated by the members of the body corporate. They have first and foremost a fiduciary duty towards the members if the body corporate. They should always place the interest of the body corporate before their own.
Once a year, the trustees need to draft a budget that will determine the monthly levies and implement the new budget. At the end of the financial year, the trustees also need to ensure that the books of the scheme are audited and then call the Annual General Meeting.
Trustees are responsible to run the day-to-day affairs of the scheme and to enforce the rules of the body corporate. Should there be a dispute, such dispute should also be first addressed by the trustees before the matter can be taken to CSOS for resolution.
The trustees will also supervise any staff appointed by the body corporate as well as any service providers working on common property and must ensure that the body corporate always complies with legislation.
Due to our busy lives and complicated legislative demands, one does not always have the time to attend to the administration of the scheme’s affairs after hours. Therefore, the trustees/members may elect to appoint a managing agent to perform the administration of body corporate affairs. Managing agents do not have any decision-making powers and solely act on the instruction of the trustees.
The managing agent’s responsibilities include:
- Collecting monthly levies on behalf of the body corporate and assisting with debt collection.
- Appointing contractors once the trustees approved the work to be done on common property and processing payments once approved by the trustees.
- Submitting insurance claims on behalf of the members and body corporate, provided that all the relevant information supporting the claim is provided.
- Drafting the budget and compiling the books for audit purposes on behalf of the trustees.
- Assisting with the compilation of the required 10-Year Maintenance Plan and executing the project in terms of the plan.
- Drafting a conduct letter to ensure members abide by rules as well as distributing circulars on behalf of the trustees.
- Seeing to it that meetings are conducted in terms of legislation and providing advice where needed.
- Protecting private information is key, and the managing agent should also advise trustees on compliance issues.
In conclusion, to ensure a harmonious living environment, all the parties listed above should work together as one team and ensure they play their part in the management of the scheme. To avoid any misunderstanding, it is always good to be as transparent as possible. Therefore, regular communication to all concerned is key.