As we approach the end of 2009 it is interesting to look back and consider what issues have arisen in the Sectional Title industry over the past 12 months. Here are some:


When will the provisions in the Sectional Titles Amendment Bill 2009 become law?
It could be at any time. The Bill was published for public comment and the inputs received have probably been analysed by now and some of them translated into amendments. The revised Bill will be published again when it is introduced to Parliament, but there is no way of knowing exactly when that will happen.

Are owners in arrears with levies protected by the consumer protection provisions in the National Credit Act?
Good question! Whereas the general view has been that the raising of levies, even if payable in installments, is not the granting of credit, there do seem to be indications that in some circumstances an owner debtor could force the body corporate to ‘re-schedule’ the debt.

The mischief, of course, is that other owners then have to find the cash to pay body corporate debts if they are to avoid very substantial penalties imposed by its creditors, and if the levy collection process is delayed for a substantial number of owners, the scheme could face commercial insolvency.

During the recent Information Sessions it was asked whether the CSOS could not also deal with levy claims by body corporates against defaulting owners as this is apparently the most pressing problem, particularly for inner-city and low-cost housing schemes… Interesting!

Are Managing Agents ‘debt collectors’ for the purposes of the Debt Collectors Act?
Well, the National Association of Managing Agents (NAMA) has a number of legal opinions saying that they are, so they need to register as such and open a separate trust account for this purpose and they are limited to the prescribed charges for various debt collection activities. And the National Credit Regulator’s arbitrator agrees with this view, having found a number of managing agents guilty of contravening the NCA because they charged higher amounts for their services.

The NAMA suggests that registration as a debt collector is not too onerous a task and the hassle of registration may be offset by the profits that can be earned from this activity. It has offered to advise its members how best to handle this process. But the issue is not entirely clear yet. Perhaps developments during 2010 will bring us the required certainty.

Should the CSOS regulate Managing Agents?
The NAMA thinks so and have made this comment at all the Information Sessions held for the STSM (Sectional Title Scheme Management) and the CSOS (Community Scheme Ombud Service) Bills.

This indicates the level of frustration in the industry at the fact that neither the Estate Agency Affairs Act nor the regulations under it have been amended to regulate the full scope of managing agency activities or to adopt the Code of Conduct developed by the NAMA for managing agents.

While the estate agency profession is moving towards a proper system of professional examinations designed to ensure that those who offer property brokerage and leasing services are properly qualified, managing agents have apparently been left out in the cold.

It is thought that the CSOS will better understand the managing agency profession and be able to regulate it. It is argued that it could also easily develop the capacity to hear cases against managing agents accused of professional misconduct, this being a species of dispute resolution procedure for which it is designed.

We await the Ministry of Human Settlements decision in this regard with interest.

When will the CSOS come into operation and where will its offices be situated?
In a Personal Finance article published on 5 December 2009 the Department of Human Settlements’ spokesperson, Chris Vick, is quoted as saying that the Department hopes to introduce the CSOS Bill in Parliament by the end of June 2010. The suggestion is made that the service could be up and running by early 2011.

While nothing is certain as yet, the service is likely to have a head office in Pretoria, a first pilot regional office in Gauteng and then two further regional offices in the Western Cape and Kwa-Zulu/Natal.

How and when will the Department of Human Settlements make sectional title tenure more suitable for housing delivery?

Probably in 2011. As readers know, the STSM Bill deals only with moving the current provisions relevant to governance of sectional title schemes to another statute under the oversight of the Department of Human Settlements. But it is clear that the Department understands that some work on the legislation is required to make sectional titles better suited to the housing delivery process.

While there are a number of approaches to dealing with this issue, my guess is that the ones that will receive priority are first making the legislation more understandable to the public, particularly by having the provisions re-written in plain English and without complex concepts where these are considered unnecessary. And the second priority may well be providing a framework of rules for low-cost housing developments.

Article reference: Volume 4, Issue 12, Page 1.

This article is published under the Creative Commons Attribution license.  

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