Subsidence of Sectional Title Dwellings

Part 1: A Case Study and Legal Analysis

By Prof. Graham Paddock

This article examines the legal implications and responsibilities arising from foundation subsidence and consequent internal damage in sectional title schemes, using a real-life case study. The focus is on the duties of the body corporate and unit owners, and the application of relevant legislation, including the Sectional Titles Act 95 of 1986 and the Sectional Titles Schemes Management Act 8 of 2011. This case study highlights the process of determining liability for underpinning foundations and repairing resultant damage, offering a methodological framework for similar cases.

Subsidence can pose a real risk to the structural integrity of buildings within sectional title schemes. Determining responsibility for addressing subsidence and its effects on sections can be complex, involving an interplay of statutory obligations and practical considerations. This article explores these issues through a detailed case study, illustrating the legal principles and procedural steps involved in resolving such issues.

According to expert evidence from a qualified firm of engineers, the foundation underpinning a dwelling section within a sectional title scheme required stabilisation due to subsidence, which had also resulted in internal damage to the dwelling. This case study focuses on two primary issues: the responsibility for stabilising the section’s foundations and the cost of repairing the resulting internal section damage. It does not cover potential CSOS claims, although these should be borne in mind.

Methodology

Preparation for dealing with these issues involved three key steps:

1. Document Review: Inspection of insurance policies, trustee resolutions, sectional plan, property reports, correspondence, photographs, scheme rules, and engineering reports.
2. Analysis of Legal Framework: Applicable legislation, including: Sectional Titles Act 95 of 1986 (ST Act); Sectional Titles Schemes Management Act 8 of 2011 (STSM Act); Community Schemes Ombud Service Act (CSOS Act), and relevant body corporate management rules.
3. Interpretation of Applicable Statutory Law: Definitions of key terms including: “unit,” “section,” “common property”, “body corporate” and “owner” are included in Section 1 in both the ST and STSM Acts; Sections 5(3)(d), 5(4), and 5(5) of the ST Act define section boundaries; Section 16(1) of the ST Act deals with ownership of common property; Section 3(1)(l) of the STSM Act makes it the body corporate’s duty to maintain all the common property; Section 13(1)(c) of the STSM Act makes it an owner’s duty to repair their section and Section 28 of the ST Act provides for servitudes for subjacent and lateral support between sections and common property.
4. Interpretation of Common Law: The common law includes the concept of ‘delict’ allows a person who suffers damages as a direct result of another person’s failure to comply with a statutory duty to claim compensatory damages.

Findings

1. Responsibility for Stabilising Foundations: The foundations below the median line that support the sections in a sectional title scheme are classified as common property. Section 3(1)(l) of the STSM Act mandates that the body corporate must maintain the common property in a state of good and serviceable repair. This includes the obligation to underpin and stabilise foundations affected by subsidence.
2. Responsibility for Repairing Internal Damage: While unit owners are responsible for maintaining their sections in good repair (section 13(1)(c) of the STSM Act), the common law law of delict allows them to claim reasonable costs for internal repairs from the body corporate if the damage within their section is directly caused by its failure to properly maintain the common property foundations. In addition, section 28 of the ST Act obliges the body corporate to ensure that the common property foundations properly support the section it is designed to support.

Legal Analysis

The body corporate bears both the operational and financial responsibility for stabilising the common property foundations and repairing the damage to the common property envelope that surrounds the section above foundation level. In these cases, the body corporate is legally obliged both to arrange for the work and to pay all the associated costs. Owners, however, must carry out and pay for the repair of internal damage to the section, but are entitled to claim and receive reimbursement from the body corporate for all costs directly attributable to the common property foundation subsidence. These conclusions are based on the unqualified statutory obligation imposed on the body corporate in regard to repair and maintenance of the common property and the reciprocal servitudes for support between sections and common property.

Insurance Considerations

In the case study, the body corporate was advised to file an insurance claim for subsidence damage, as subsidence was not excluded under the scheme’s policy. The excess payment was 1% of the sum insured with a minimum of R5 000, payable by the body corporate as the insured party. Additional claims for loss of rent, removal costs, and alternative accommodation covered by the body corporate’s insurance policy should be considered. As the insured, the body corporate must make these claims and recover the relevant amounts, which must then be paid to the owner who has suffered the associated losses.

Conclusion

This case study highlights the importance of a thorough legal and factual analysis in resolving subsidence-related disputes in sectional title schemes. The body corporate’s statutory duty to maintain common property and the owner’s right to claim for internal damage are central to these disputes. Trustees, managing agents and legal practitioners should ensure comprehensive documentation and a clear understanding of legislative provisions to effectively navigate resolution of such cases.

This article aims to provide a practical guide for legal professionals dealing with subsidence issues in sectional title schemes, ensuring a balanced and legally sound approach to guide the parties in negotiating such complex matters. In a subsequent article I will deal with the process of making an application to the CSOS when parties are unable to resolve the issues.

Article reference: Paddocks Press: Volume 20, Issue 03

This is the first in a two-part series, which will be continued in April’s Paddocks Press.

This article is published under the Creative Commons Attribution license.

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