SECTIONAL TITLE & HOA
1. WHAT EXACTLY IS SECTIONAL TITLE, AND WHAT DO I OWN?
In practical terms, a section is usually a flat or townhouse, but may also be a garage, domestic staff room or external storeroom. It can include an open area or an adjoining area e.g. balcony or garage and is shown on the Sectional Title plans by solid lines. The owner is responsible for maintaining and repairing the inside of the section and the hot water system serving the section regardless of whether the system is in the section or not. The outer frame of the section is maintained by the Body Corporate.
2. WHAT AM I INSURED FOR?
Your sectional title policy covers any loss or damage caused to the structure (building) and any of its standard fixtures and fittings in your unit, as a result of an insured, sudden and unforeseen event e.g. lightning, storm, wind, water and fire damage. In general, any insured damage caused to the building or fixtures (if you turn the unit upside down, everything that stays attached is usually considered a fixture e.g. ceiling, walls, wall to wall carpeting, doors, built-in cupboards) may be covered by the insurer. You may declare nonstandard improvements to your insurer, this may include solar panels, solar geysers, heat pumps, air conditioning, laminated wooden flooring, thatch roof lapa, wendy houses, garage door motors etc.
3. WHAT IS COMMON PROPERTY?
All building/s that do not form part of any section, including the land in the scheme are common property. Common Property is jointly owned by all those who own sections. Driveways, gardens, swimming pools, corridors, lifts, entrance foyers, parking bays, outer walls, outer windows, doors, foundations, the outside of the section and the roof are all part of the common property. As mentioned above, some parts of the common property are designated as exclusive use areas. Each owner has an undivided share in the common property. Owners are entitled to use all areas of the common property not reserved for the use of others (exclusive or private use). All use of common property must be reasonable and consideration of others must always be given.
4. WHAT IS A PARTICIPATION QUOTA(PQ)?
Every unit owner of a section also owns a share in the common property. The PQ determines the individual owners share in the common property and is established from the ratio of the area of an individual section to the area of all the sections combined. It is used to determine the value of an owners vote and the amount to be contributed by payment of the levy. Exclusive use areas are always excluded from the calculation of the PQ.
Example: A 100m2 section in a Scheme
comprising 4000m2 (the total square meterage
of all the sections added together) would have
a PQ of 2.5% or 0.025 which is calculated as
follows:
100 / 4000 = 0.025. This would comprise the share of levies payable by the section
owner and the value of the section owners vote at general meetings.
Example: A 100m2 section in a Scheme
comprising 4000m2 (the total square meterage
of all the sections added together) would have
a PQ of 2.5% or 0.025 which is calculated as
follows:
100 / 4000 = 0.025. This would comprise the share of levies payable by the section
owner and the value of the section owners vote at general meetings.
5. WHO ARE THE TRUSTEES?
The Trustees are usually, but not necessarily, owners of units in a scheme who have been
entrusted with the task of looking after the scheme on a day-to-day basis. Trustees are
appointed by the Body Corporate at an AGM and usually hold office until the next AGM. The
Managing Agent, members of his/her staff or an employee of the Body Corporate may not be a Trustee unless he/or she is an owner. Trustees work on a voluntary, unpaid basis. All Trustees are, of course, entitled to be reimbursed for all legitimate costs incurred by them in
execution of their duties. At the first meeting of the Trustees after being appointed, the Trustees elect a Chairperson who holds office until the next AGM but can be replaced by the other Trustees during his or her term of office.
entrusted with the task of looking after the scheme on a day-to-day basis. Trustees are
appointed by the Body Corporate at an AGM and usually hold office until the next AGM. The
Managing Agent, members of his/her staff or an employee of the Body Corporate may not be a Trustee unless he/or she is an owner. Trustees work on a voluntary, unpaid basis. All Trustees are, of course, entitled to be reimbursed for all legitimate costs incurred by them in
execution of their duties. At the first meeting of the Trustees after being appointed, the Trustees elect a Chairperson who holds office until the next AGM but can be replaced by the other Trustees during his or her term of office.
6. WHO MAKES THE RULES?
At the inception of a scheme, Management and Conduct Rules are established. These rules form Annexures 1 and 2 of the Sectional Titles Schemes Management Act and may be amended by the developer before the register is opened. As their names infer, the management rules control the running or management of the scheme, while the conduct rules lay down guidelines for the conduct or behavior of owners and occupiers and their guests or tenants.
7. WHAT IS THE DIFFERENCE BETWEEN ADMINISTRATIVE AND RESERVE FUND LEVY?
Administrative Levy: The costs incurred in running a scheme have to be paid by the Body Corporate.
These costs include:
- Auditors fees & administration charges Bank charges
- Refuse removal, water & sanitation
- Security & gardening services
- Electricity (common property)
- Maintenance of building (exterior)
- Lift Maintenance (if applicable)
- Insurance of the building and common property (only fixtures)
- Managing Agent costs
- Salaries/Wages (if applicable)
Reserve Fund Levy: Contributions collected from owners to build up and maintain a fund for future maintenance, repairs, and replacement of the common property and assets of the scheme. This includes planned, major, and capital expenditure to ensure the long-term sustainability of the scheme.
The reserve fund covers non-routine and long-term expenses, such as:
- Repainting of buildings
- Roof repairs or replacement
- Road resurfacing and paving
- Replacement of lifts or major equipment
- Boundary walls, fencing, or security upgrades
- Major plumbing or electrical infrastructure repairs
These costs include:
- Auditors fees & administration charges Bank charges
- Refuse removal, water & sanitation
- Security & gardening services
- Electricity (common property)
- Maintenance of building (exterior)
- Lift Maintenance (if applicable)
- Insurance of the building and common property (only fixtures)
- Managing Agent costs
- Salaries/Wages (if applicable)
Reserve Fund Levy: Contributions collected from owners to build up and maintain a fund for future maintenance, repairs, and replacement of the common property and assets of the scheme. This includes planned, major, and capital expenditure to ensure the long-term sustainability of the scheme.
The reserve fund covers non-routine and long-term expenses, such as:
- Repainting of buildings
- Roof repairs or replacement
- Road resurfacing and paving
- Replacement of lifts or major equipment
- Boundary walls, fencing, or security upgrades
- Major plumbing or electrical infrastructure repairs
8. WHAT ARE THE RULES REGARDING PETS?
It is not surprising that permission to keep a pet is covered by the very first rule (Rule 1) of the conduct rules, as much unhappiness and heartache have been caused by a failure to understand this rule. An occupant of a Sectional Title unit may not keep a pet in a scheme without the written consent of the Trustees, which consent the Trustees may not refuse without good reason. In considering an application, the Trustees have to be guided by the type of pet and the nature of the scheme. In granting consent Trustees may impose special conditions and may withdraw the consent if the pet causes a nuisance to other owners. Emotions run high when it comes to pets! Please note that often a Body Corporate will, by Special Resolution, amend conduct rule 1 and ban all or certain types of pets.
9. WHAT IS REQUIRED WHEN I SELL MY UNIT?
You must notify the Body Corporate that you are selling your unit, as a clearance certificate is required. Please note that the Act requires an owner of a Sectional Title unit to notify the Body Corporate of any change in the status of bond registered over the unit, such as the registration of a second bond, or cancellation of an existing bond.
10. MAY I RENT MY UNIT TO A TENANT?
Yes, but as an owner of the unit, you remain a member of the Body Corporate and are responsible for payment of the levy. You are also responsible for the conduct of your tenant, so you must furnish your tenant with a copy of the Rules. You are required to notify the Body Corporate that a unit is being rented to a tenant.
GOT A QUESTION?
Need a little more clarity? We’re here to help you navigate the details. We would love to hear from you.
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River Falls Office Park
262 Rose Avenue Doringkloof Pretoria 0157 Tel: +27 (0) 12 001 9000 [email protected] Private Bag x115, Centurion 0046 |