Which rules apply? Some further notes on maintenance of common property at sectional title schemes

February 1st, 2019

By Tertius Maree

I refer to the article by Brian Agar ‘Maintenance of common property in sectional title schemes’ 2018 (Oct) DR 19. I must firstly agree with Mr Agar that there is much to be criticised about the new sectional title legislation. My first and most important criticism is the extent to which the administration of sectional title schemes has unnecessarily been rendered more complicated and difficult, particularly by the prescribed management rules.

However, I must disagree with some very important aspects of Mr Agar’s views expressed in the article. Let me start with the most important one, namely the question as to which schemes the currently prescribed rules apply. Mr Agar states that ‘while schemes registered after 7 October 2016 must observe the Act and its Regulations, schemes registered under the Sectional
Titles Act 95 of 1986 retain most of their Management Rules and these do not require a maintenance plan.’ This view is based on s 10(12) of the Sectional Titles Schemes Management Act 8 of 2011 (the Act), which reads as follows:

‘Any rules made under the Sectional Titles Act are deemed to have been made under this Act.’

I must agree that this bland statement can be interpreted in different ways. However, the ruling interpretation as applied by trustees, managing agents, practitioners, academics, as well as the Community Schemes Ombud Service is that the word ‘made’ should be understood to mean amended rules adopted by respective bodies corporate and not rules ‘made’ by the legislature.

The latter interpretation is supported by the transitional clause, s 21 of the Act, which reads as follows:

‘Rules prescribed under the Sectional Titles Act must continue to apply to new and existing schemes until the Minister has made regulations prescribing management rules and conduct rules referred to in section 10(2) of this Act.’

The minister prescribed the new rules on 7 October 2016, at which point, the ‘old’ prescribed rules lapsed and the new rules became applicable to all schemes, old and new, except in respect of special rules ‘made’ by the bodies corporate prior to that date, which special rules are retained. The latter exception is subject to a proviso that such special management rules may not be irreconcilable with any prescribed management rule.

In general, it should, therefore, be understood that the rules prescribed under the Act apply to all sectional title schemes and that the requirements for a maintenance plan apply similarly to all schemes.

Mr Agar then finds a contradiction between formulas prescribed under management r 22(2) and reg 2. What should be understood is that management r 22(2) prescribes the formula, which must be applied, and the result should then be tested against the three minima prescribed under reg 2. These two provisions do not contradict each other.

The next point that warrants comment is the statement that ‘the proposed annual contributions to the reserve fund are voted on by owners at the AGM.’ This is not true. The owners vote on the budget only. Although this does ultimately result in determination of the levies, it is not the same as voting on the levies, which owners may not do. Should the owners adopt an inadequate budget, it will eventually unavoidably lead to the imposition of special levies by the trustees, about which the owners have no say.

I agree with Mr Agar that the preparation, adoption and upkeep of a maintenance plan is onerous and may be costly. However, the introduction of such a system has become unavoidable due to trustees and managing agents continuing to fund maintenance projects with special levies under the previous regime, despite many warnings, myself included.

No legislation is ever perfect, and this applies particularly to sectional title legislation. The concept of sectional titles was first developed for blocks of flats and the laws were framed accordingly. However, the concept very quickly washed over to other property formats, such as free-standing houses, shops and offices, mixed residential/commercial schemes, hospitals, caravan parks and even boat moorings. Soon it is likely also to apply to farmland. Each of these demand different legislative formats and to create a single law catering for all possibilities is very difficult and demands constant legislative adaptations.

New sets of problems arise constantly, and the legislature must provide solutions. Two examples are the building of mezzanine floors, which extend the floor areas of sections, doors and windows not fitted on the median lines of walls. Both required legislative amendments.

I cannot agree with Mr Agar that the issue of doors and windows have not been clearly resolved. The amendment referred to by him was that the median lines of external walls deviate to the median lines of doors and windows fitted in such walls. This means that the external halves of such features are common property, while the inner halves are private property. The accepted practice is that, as far as maintenance and replacement is concerned, the costs in respect of such features are split 50/50 between owner and body corporate. Mr Agar describes the amendment as ‘half-baked.’ Although not perfect, I would challenge him to draft something better.

Tertius Maree BA Law LLB LLM (Stell) is an attorney at Tertius Maree Associates in Stellenbosch.

This article was first published in De Rebus in 2019 (JanFeb) DR 20.