PROPERTY: Sectional Title Schemes Explained
Recent Western Cape Business News
Pistor says people often confuse ownership of property governed by a home owners’ association in accordance with the common law with that falling under a body corporate which is governed by the Sectional Titles Act.
“Further to the provisions of the Sectional Titles Act, a sectional title scheme is governed by the Regulations to the Act and the Management and Conduct Rules of the development as registered in the deeds office. The trustees are not entitled to make any decisions or rules which conflict with these registered rules unless the rules are changed with the appropriate authority of the body corporate.”
She points out that once a body corporate has been established in respect of a sectional title scheme, owners can only change the management rules by means of a unanimous resolution which has more stringent notice time, quorum and voting requirements to achieve than changes to the conduct rules which can be done by means of a special resolution.
“Trustees are not entitled to make unilateral changes to any of these rules,’’ she warns.
Pistor says a body corporate has to appoint trustees to carry out the functions prescribed by the Act and Regulations on its behalf and owners should therefore ensure that general meetings are held annually to appoint the necessary trustees.
“The Sectional Title Act requires the appointment of a minimum of two trustees and the maximum number of trustees is determined by the owners in the general meeting.
“Nominations for trustees should be given by no later than 48 hours prior to the general meeting and the body corporate is only entitled to accept nominations at the general meeting if insufficient nominations have been received.”
She further points out that trustees appointed by the body corporate do not have to be owners of units in the development provided that the majority of trustees are owners. The managing agent may also be a trustee, provided that he or she is an owner.
Owners, says Pistor, are entitled to attend trustee’s meetings although they are not entitled to receive notice of trustees meetings nor to vote at such meetings.
“Trustees that are going to be absent from trustee’s meetings are not entitled to appoint a trustee to act in their place. This prerogative rests with the board of trustees as a whole and it is the trustees, and not the body corporate, who elect the chairman to represent the board of trustees.
“In this regard it is important to note that the chairman has no more obligations nor entitlements than a regular trustee. The only difference being is that the chairman has a casting vote in the case of an equal number of votes.
“The annual chairman’s report is also actually a report which the trustees are obliged to present to the body corporate. So if the chairman fails to do so, the trustees can appoint another person from amongst themselves to attend to this,” concludes Pistor.
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