Sectional Title South Africa

Portfolio of Evidence

Simon John Smith

1.2 Sectional Title

Sectional title is a form of ownership where a number of people can simultaneously own a piece of land on which a building or buildings is built, while each one of these people individually owns a townhouse or a flat in the building. Each individually owned building is called a section and this forms part of the overall sectional scheme. The remaining portion of the land is called the common property and is owned in undivided shares by each owner. Examples of the common property are;

 Corridors

 Lifts

Certain areas of the common property may be set aside as exclusive use areas for a particular owner examples of these could be;

 Gardens

 Garages

 Carports

All of the owners of units in a sectional title scheme have to pay levies, which goes towards covering the running costs of the scheme. The amount of levy payable by each owner is calculated by using the participation quota. The participation quota is calculated by taking the size of the owners unit (Floor size in SQ meters) and dividing it by the floor surfaces of all the units in the scheme. This participation quota is also used to determine the size of the undivided share the owner has in the common property as well as the weight of their vote at any meetings. All of the above is regulated by the Sectional Title Act (Act 95 of 1986)

1.2.1 Role Players

The role players in a sectional title scheme are;

 Owners (Body Corporate)

 Trustees

 The managing agent

 Developer

 Surveyor

 Conveyancer

Owners (Body Corporate)

The owners of each section who also make up the body corporate play a role in making sure that the complex they live in is well run and is operated accordingly to the provisions of the sectional title act. The body corporate has the obligation to ensure that a budget is drawn up and that the owners all contribute towards the budget (Levies) to ensure that all the financial obligations of the body corporate are met. The body corporate will normally appoint a group of the owners who will then be called Trustees to active control the above requirements.

Trustees

In most cases the owners of a sectional title scheme hand over most of the responsibility of the control, management, and administration of the common property to a group of owners who are nominated as Trustees. All Trustees must act honestly and in good faith, and manage the functions only in the best interests of the body corporate. They cannot exceed their powers and may not have conflicts of material interest. The Trustees are appointed annually by the owners at the AGM and may serve for one year until the next AGM where he can be re-elected. The duties of the Trustees include;

 Keeping minutes of the trustees meetings

 Keeping all accounting records for a period of six years

 To insure the building

 To determine the monthly levy payable by the owners

 To keep a record of the conduct rules

Managing Agent

As self management of a sectional title scheme can be a dangerous and onerous thing many Trustees with the permission from the body corporate appoint a managing agent to attend the affairs of the complex. Almost all relationships with managing agents differ so here are some of the most common functions of a managing agent;

 Put the insurance in place

 Ascertain the replacement values of the buildings

 Operate an account for the body corporate

 Collect levies

 Provide the Trustees with the necessary knowledge from the Act.

 Organise