By Prof Graham Paddock
21. Who is liable for levies?
The person who is the registered owner of the unit on the day the trustees levy a contribution on owners is responsible to pay that levy to the body corporate. A contract to buy a unit may include a clause that transfers the liability for levies from the seller to a buyer from a particular date, e.g. the date of occupation.
22. How long does a particular levy last, and can I be asked for extra money?
Ordinary levies are based on a budget approved for a twelve month financial year, so you can expect them to be revised each year.
But if the body corporate encounters a necessary and unbudgeted expense, the trustees can declare a ‘special levy’ and all owners will be liable for their shares of the additional amount.
23. What does my levy include?
Owners pay general levies calculated on the approved budget for the current financial year, normally in monthly instalments.
The budget covers scheme expenses such as:
- municipal service charges for water, sewerage and refuse removal,
- cleaning, maintenance and repair of the common property, including lighting, lifts, intercom, security, fire alarms and extinguishers, refuse management, gardening services and equipment,
- insurance premiums and valuation fees, and
- perhaps, contributions to reserve funds for future maintenance, repairs and replacement costs.
24. Will the managing agent or supervisor do minor repairs in my section?
Not usually. These persons are employed by the body corporate to assist the trustees in the administration of the scheme generally and to care for the common property, not to deal with private repairs inside sections.
25. What should I do if the body corporate does not repair and maintain the common property?
You should discuss the matter with the trustees and the managing agent. If this does not get results, you should join other owners in demanding that the trustees arrange proper maintenance.
26. What are the managing agent’s duties?
Managing agents assist the trustees to run the scheme. They perform day-to-day management tasks, taking primary responsibility for administrative and record keeping requirements and assisting in the physical management of the scheme. The managing agent provides the trustees with regular financial and other management information and assists them to make decisions. They usually provide a full accounting and levy collection service, deal with the payment of body corporate debts and assist in managing maintenance and repair projects.
27. What can owners do if they don’t like the way trustees are running the scheme?
They can stand for election as trustees and play a more direct role in management. Owners who together hold twenty-five percent of the value of votes in the scheme can demand a special meeting to remove one or more of the current trustees and elect others.
28. Does each owner take a turn being a trustee?
No, you have a right to make yourself available to act as a trustee, but you do not have to do so. And even if you do make yourself available, others must vote for you before you can be elected as a trustee. Trustees are not normally paid for their services. Often they appoint a managing agent to assist them.
29. What are the duties of the trustees?
- To control, manage and administer the common property and body corporate’s assets.
- To ensure that owners and other occupiers of sections comply with the Act and the scheme’s rules.
- To ensure that arrear levies are promptly recovered.
- To manage the scheme generally.
- To call and hold regular annual general meetings and call and hold additional general meetings when necessary.
- To ensure that proper notices are given for all meetings.
- To keep secretarial and financial records and allow these to be inspected on reasonable notice.
- To act honestly and in good faith for the benefit of all owners and not in their own interests.
- To make sure that the scheme buildings and assets are adequately insured to replacement value.
- To raise special levies when necessary unbudgeted expenses are incurred.
- To make sure that the common property and facilities are maintained and repaired.
- To supervise the activities of the managing agent, if one is employed, and any other body corporate employee or agent.
30. How do trustees make decisions?
By majority vote. If their is a deadlock in the trustee voting, the chairperson has a ‘casting’ vote. Owners are entitled to attend trustee meetings as observers and to speak on the issues on the agenda.
31. What do you need to have and do to be a good trustee?
- A responsible attitude to the affairs of the body corporate.
- The ability to run the scheme sensibly, but at the same time to remember that you are dealing with people’s homes, their domestic lives and the welfare of their families.
- To set a good example to others, for example in obeying all rules, without becoming self-important.
- Leadership and communication skills.
- A working knowledge of the management provisions in the Sectional Titles Act and the scheme’s rules.
- An ability to participate in trustee and body corporate meetings, striking a balance between efficiency and social interaction.
- To be efficient in dealing with owner issues and supervising the managing agent.
- The ability to understand the scheme’s financial affairs.
32. What are the difficulties trustees can face?
- They may need to make unpopular decisions. Especially when you need to collect money from owners or control their behaviour, you can encounter negative reactions.
- Applying scheme restrictions firmly and equally to owners; some may be your friends while others may be very different to you.
- Dealing with owners who insist on contacting you personally every time they have a complaint. Your agreeing to be a trustee does not give owners the right to interrupt your life every time they have something to say.
- Finding yourself out of your depth. Scheme management can become financially and legally complex, so trustees must sometimes rely on professional advisers to make sure that they are on the right track.
- Dealing with difficult owners, at meetings and in one-on-one confrontations.
- Finding time to prepare for and attend meetings. If a trustee does not read the paperwork or cannot attend meetings regularly they are not able to participate properly in scheme management.
33. Where can trustees and owners do to protect their rights and understand their duties?
In a sectional title scheme, whether you are a trustee or an owner, you need knowledge to perform your duties and protect your interests.
- Read the Act and the scheme’s rules
- More information:
- To get sectional title advice from Prof Graham Paddock, become a Community member of Paddocks Club. (click here for more information)
- To understand how schemes operate, purchase the ‘Sectional Title Survival Manual‘ by Prof Graham Paddock. The 6th edition of this popular book retails for R295 each and can be ordered through Paddocks. (click here to order)
- To learn the detail of sectional title scheme management legalities, enrol for the University of Cape Town (Law@Work) Sectional Title Scheme Management course, which is presented in conjunction with Paddocks. (click here for more information)
This article is published under the Creative Commons Attribution license.