Municipality meter calculation problems

Q1: In a free-standing unit complex how do you calculate the water and lights in a correct way when there is a municipality meter for the whole complex but each and every unit has its individual water and electricity meters? We are having constant problems with these calculations as the body corporate keeps coming with different ideas every month. Thanks.

A1: We need to distinguish two separate costs here. The first is the cost of the water and electricity that is used in connection with the common property and the second is the cost of the water and electricity that is used in connection with the individual sections in the scheme.

The bill for the water and electricity used in connection with the common property (which will be based on the readings of the municipality meter “for the whole complex”) must be shared amongst all the owners in the scheme. This cost must be divided according to the participation quotas of the sections in the scheme unless the developer or the body corporate have made special rules in terms of section 32(4) of the Sectional Titles Act 95 of 1986 which varies the effect of the participation quota. So in simple English, if no special rules have been made as to how communal costs are shared amongst the owners then the cost must be split amongst the owners in accordance with their allocated participation quotas. The participation quota schedule can be found on the last page of the scheme’s sectional plan which is held in your local Deeds Registry.

The bills for the water and electricity used in connection with the individual sections must be paid by the owners of those sections. The whole point of individual metering of water and electricity is that owners in the scheme pay for the water and electricity that is consumed in their sections and therefore there should be no subsidization between the owners in respect of these costs.

So, how do you calculate who pays what?

Your first step is to take a ‘base’ reading from each owner’s separate meter on a certain date, for example the first day of the month. Record the base reading and then take another reading a month later, ie. on the first day of the next month. Now you have two figures. Subtract the first from the second and you will have calculated how many units of water or electricity that individual owner has used and therefore how much s/he is liable to pay for his/her section’s consumption. Do this for all the owners in the scheme.

Your next step is to add up all the individual owners’ unit consumption and to subtract this amount from the total units charged in the municipality’s bill. This will give you the amount of water and electricity that has been used in connection with the common property. This amount must be split amongst owners on the basis of the participation quotas or the section 32(4) rule if there is one.

Q2: Our block is financially sound but has the usual bickerings. One of the owners has suggested that we have an administrator. Would this be legal? At the moment we are administered by in house and I would say very successfully but there are the usual jealousies.

A2: The term “administrator” is used in the Sectional Titles Act 95 of 1986 (“the Act”) to refer to a person appointed by the High Court to control, manage and administer a scheme in circumstances where the body corporate in general and its trustees in particular are unwilling or unable to properly control, manage and administer the scheme in accordance with the Act and the scheme’s rules. The appointment of an administrator is a drastic measure and one that should only be used as a last resort once all other remedies have been exhausted. From your question it does not sound as if your scheme is anywhere near in need of an administrator.

Perhaps when you refer to an “administrator” you envisage someone who is employed by the body corporate to assist the trustees in carrying out the functions and duties of the body corporate. This person is referred to as a “managing agent” and most schemes in South Africa are managed by one.

In terms of prescribed management rule 46 the trustees may decide to appoint a managing agent and must appoint one if required to do so by the body corporate in general meeting.

Lawyer fees on levy

Q3: I am an owner of a sectional title unit. I often get lawyer’s letters from the Body Corporate about various things. The Body Corporate do not believe in speaking to an owner, they send lawyers letters.  My question is I always get charged on my levy for these lawyers letters, are they allowed to do this? I also have to pay my lawyer as every time I get a lawyers letter I in turn send it to my lawyer. Clarification on this subject would be appreciated.

A3: In terms of prescribed management rule 31(5) an owner is liable for all legal costs incurred by the body corporate in recovering from him any levies or other arrear amounts due and payable to the body corporate. He is also liable for the body corporate’s legal costs incurred in enforcing compliance with the management rules, the conduct rules or the Sectional Titles Act 95 of 1986. An owner who is successfully sued by the body corporate is liable, amongst other possible expenses, for the body corporate’s full legal costs.

Therefore if the lawyer’s letters that you receive are part of the body corporate’s attempt to recover arrear levies or other amounts from you which you owe to it or to enforce the rules of the scheme or the provisions of the Act, then you may well be liable for the costs of the lawyer’s letters.

However, from your statement that the body corporate does not talk to owners it simply sends lawyers letters, it seems that the body corporate may be incorrectly charging you for lawyer’s letters which do not relate to recovery of levies or enforcement of the rules or provisions of the Act. If you believe you have been wrongly charged for the fees associated with lawyer’s letters your recourse is to dispute the charge. Be careful of using the formal dispute resolution procedure in terms of prescribed management rule 71 because the costs may outweigh the benefits. This is a matter best dealt with by negotiation, so try to convince the managing agent that the charge has been incorrectly raised.

Balcony Damage

Q4: My fiancé owns a townhouse, and was recently advised that the balcony has a water problem that is causing damage to the unit below. The body corporate have advised him that he is responsible for the maintenance of the balcony, and the costs of the repair have been quoted as R7 000. Is he indeed responsible for repair of this exclusive use area, and if not, how can we prove to them that this is not the case? Please could you kindly advise if possible. Many thanks.

A4: In the situation you describe your fiancé has exclusive use rights to a balcony which is common property. When it comes to exclusive use areas in sectional title schemes, one has to distinguish between the operational and financial responsibility for maintaining and repairing the exclusive use area. The body corporate is responsible for maintaining and repairing all of the common property in terms of section 37(1)(j) of the Sectional Titles Act 95 of 1986 (“the Act”), but the owner entitled to exclusive use of an area of common property (in this case your fiancé) is responsible to pay the maintenance and repair costs associated with the common property area to which he holds exclusive use rights in terms of the proviso to section 37(1)(b) of the Act.

Therefore if the leak is in fact coming from the balcony to which your fiancé holds exclusive use rights then he will be financially responsible for the repairs that need to be carried out.

I suggest that before any work is done on the exclusive use area balcony your fiancé should request to see evidence that the leak is in fact emanating from that balcony, for example a report from a reputable leak detector or waterproofing expert.

Article reference: Volume 4, Issue 10, Page 6.