By Prof Graham Paddock

Prof Graham PaddockVoting in layered scheme

Q1. I own a unit where there are 260 units. There are approximately 60 units that are semi-attached homes. These units have one vote each. The other 200 units comprise of 9 body corporates. Each body corporate has one vote.

When it comes to HOA meetings, the 200 flats are outnumbered by the 60 HOA units by nearly 6 to 1. This is very unfortunate in any decisions that are made. As a result, the flat owners that have no private gardens etc. are paying nearly three times the levy that the home owners are paying.

Is it possible for a body corporate (12 – 18 flats) to leave / break away from the HOA? Will those flats still be able to access their property from the street, seeing that they will have to drive on roads that belong to the HOA?

A1. It seems you are in a multi-level HOA development with subsidiary sectional titles bodies corporate with the voting values stacked in favour of the conventional owners and against the sectional owners.

It is unlikely that any subsidiary sectional scheme will be able to break away from the HOA, particularly as you confirm that the scheme is set up so that sectional owners have to use HOA roadways and infrastructure I suggest that if your concerns are shared by the other sectional owners the trustees of the 9 schemes should jointly consult an attorney who understands sectional titles and HOAs very well to see if there is anything that can be done to unpick this aspect of the original design of the development.
UCT (Law@Work) Sectional Title Scheme Management course
Levy for undeveloped units?

Q2. Please advise if the developer or owners of real rights stands are responsible to pay full levies for the undeveloped stands within a sectional title development.

At our AGM it was decided to phase in full levies for undeveloped stands but the developer is now questioning this and want to revert to an original levy for undeveloped stands. The undeveloped stands do incur maintenance in terms of grass mowing, etc and the owners of the real rights have access to the full use of the property (game reserve with dams for fishing, etc).

A2. The holders of real rights of future extension are not obliged to pay levies. They only become members of the body corporate and subject to pay levies when they register sectional plans of extension showing the sections and exclusive use areas they have created. Until then they are co-developers.

They pay such contributions, if any, as the developer has disclosed in advance will be paid. This is one of the issues that will be addressed by the amendments to the Sectional Titles Act currently in process. When these come into force such a holder will have to pay any costs attributable to the future development area.

Refusing Access to Financials

Q3. I have requested from the managing agent and the Trustees of our building over a month ago to view the monthly income and expenditure statements.

I have to put a request in writing and they are given 14 days notice but the managing agent and the trustees are still refusing to allow me to view these.

What steps can I take now without having to use an attorney. Is there no control body or organization that I can go to?

A3. No, at the moment there is no body that controls sectional titles bodies corporate (or any other form of community scheme such as share block companies, retirement developments, homeowners associations etc).

But the Community Scheme Ombud Service Bill that is currently being debated in parliamentary committees is designed to help you with just this sort of problem and many others. And the Service is designed to work without lawyers in almost all cases.

It is hoped that the CSOS will be set up in 2011 and come into operation in 2012.

Article reference: Paddocks Press: Volume 5, Issue 11, Page 6
Professor Graham Paddock is an authority on sectional title law and practice. He is one of the Course Conveners of the University of Cape Town (Law@Work) Sectional Title Scheme Management course. The next course is due to start on 6 December 2010.
This article is published under the Creative Commons Attribution license.