By Jennifer Paddock
In terms of section 37(1)(j) of the Sectional Titles Act 95 of 1986 (“the Act”), the body corporate is obliged to maintain and repair the common property and the trustees do not need the permission of the owners in general meeting before they decide to do so. However, they are not entitled to effect improvements to the common property without first consulting owners. In terms of prescribed management rule (“PMR”) 33(1), a unanimous resolution must be obtained before a luxurious improvement to the common property can be effected (or removed). In terms of PMR 33(2), a special resolution is required to authorize a non-luxurious improvement (or its removal) should any owner request a special general meeting to discuss the trustees’ proposal.
It can be difficult to distinguish between maintenance and repairs on the one hand, and improvements on the other. In a situation where the trustees are unsure of the nature of the proposed work they will be uncertain whether the particular expense requires the owners’ permission or not. Take for example the issue of replacement. If a scheme’s building has old wooden window frames which are clearly in need of replacement, would replacing them with longer lasting and less maintenance-intense aluminium frames be considered an improvement to the common property or could it be considered maintenance and repair? Professor CG van der Merwe in his work Sectional Titles, Shareblocks and Time-Sharing (LexisNexis) speaks about ‘non-recurring costly items’ which can only, with difficulty, be categorised as either maintenance and repair or improvements. The replacement of wooden window frames with aluminium ones seems to be such an item. You may think that maintenance and repair does not include replacement and therefore such work must be considered to be an improvement to the common property. But this is not necessarily true. The Act envisages replacement when necessary as part of the body corporate’s duty to maintain and repair pipes, wires, cables and ducts; so is it really a stretch to say that maintenance and repair can include replacement? You may then argue that because the window frames are being replaced with a higher quality and more expensive material that this is an improvement. But this is not necessarily the case. The trustees may have taken a long-term attitude towards the maintenance and repair of the window frames by replacing the wooden frames with aluminium ones. Such replacement would prevent the window frames from having to be replaced and constantly maintained in the foreseeable future, so this attitude could in fact be a cost-saving one.
Professor CG van der Merwe states that “rapid technological advance and new building designs and materials may widen the traditional concept of maintenance”. He asks the question “Is the replacement of a defective lift by a more modern type an improvement or does it fall under maintenance of the common property?”. In van der Merwe’s view “the problem of distinguishing between these two concepts becomes even more involved if it is regarded as a question of fact which is to be resolved in each instance by reference to the characteristics and nature of the scheme and the social and economic position of the occupants”.
So how does one distinguish between an item that is considered to be an improvement and one that is considered maintenance and repair? In our view one must consider the utility and the cost of the item. An item would be maintained or repaired if the work done results in the item having the same utility as it had before it was fixed/replaced and if the cost of the work/replacement is roughly the same as it has been in the past taking inflation into account. An item would have been improved if the trustees decide to significantly increase the utility of the item despite the fact that it is possible to fix/replace the item with material that has the same utility.
In some instances the case is clear cut, for example modernising a perfectly functional foyer area purely because the residents feel it is out-dated. This is clearly an example of an improvement to the common property because the foyer works and does not require attention. However, there are often times when it is not so clear. The attitudes of investor-owners often differ vastly from resident-owners and the owners will argue one way or the other to further their differing agendas. Because the Act and prescribed rules do not guide us on how to distinguish between maintenance and repairs and improvements, owners use their own value judgments to try and resolve the matter.
When disputes arise in this regard the owners may face a deadlock situation as the cost of resolving the dispute is likely to far outweigh the cost of maintaining, repairing or improving the item in question. A practical way which would allow the trustees to move forward in this situation is for the owners in general meeting to give to them a direction in terms of section 39(1) of the Act by majority vote as to how to treat the proposed work. However, this would not necessarily resolve the issue and an owner who disagreed with the direction could still initiate arbitration proceedings if s/he felt it necessary.Article reference: Volume 4, Issue 12, Page 3.
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