SHOWING ARTICLE 14 OF 95

Decisions requiring a special resolution in terms of the STSM Act

Category Property Management

Decisions requiring a special resolution in terms of the STSM Act
Article by Dr Carryn Melissa Durham - Paddocks

Different decisions in sectional titles schemes require different levels of consent. There have been some fundamental changes made by the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”) in regard to body corporate consensus levels. This article will list the decisions that now require a special resolution of the body corporate.

Before the STSMA came into operation on 7 October 2016, the Sectional Titles Act 95 of 1986 (“the STA”) provided for all the decisions that required a special resolution. A special resolution was required for:

  •     the creation of a servitude burdening or benefiting the land;
  •     the extension of a section;
  •     rules altering the vote values or levy liability (which also required the consent of adversely affected owners);
  •     substituting, adding to, amending or repealing the conduct rules;
  •     the creation or amendment of exclusive use rights in terms of the conduct rules in terms of section 27A;
  •     the cancellation of a notarial deed of cancellation of an exclusive use right in terms of section 27(5) of the STA;
  •     suing the developer;
  •     insurance against more risks than fire and those prescribed;
  •     non-luxurious improvements to the common property or their removal;
  •     holding general meetings in remote locations;
  •     a decision by owner’s that the managing agent’s contract be revoked; and
  •     authorising the remuneration of trustees who are owners.

All of these decisions continue to require a special resolution in terms of the STSMA and the rules prescribed thereunder. There are, however, additional decisions requiring special resolutions.

Section 4 of the STSMA lists the powers of the body corporate. This provision is a re-working of section 38 of the STA. There are three major changes in this provision. There is the introduction of three decisions that are now required to be taken by special resolution.

Firstly, section 4(b) of the STSMA states that a special resolution is required for the body corporate to purchase or otherwise acquire, take transfer of, mortgage, sell, give transfer of, hire or let units. There is the additional requirement that the dealing needs to be essential for the proper fulfilment of its duties.

Secondly, section 4(e) of the STSMA states that a special resolution is required for the body corporate to borrow moneys required by it, in the performance of its functions or the exercise of its powers.

Thirdly, section 4(h) of the STSMA states that a special resolution is required for the body corporate to enter into leases of parts of the common property to owners or occupiers for periods of less than ten years.

Section 5 lists additional powers of the body corporate. These provisions are those that were in the STA that gave bodies corporate powers to authorise acts of registration, specifying the level of authority required in each case. This provision contains three decisions that require a special resolution:

  1. Section 5(1)(f) of the STSMA states that a special resolution is required for the body corporate to enter into a notarial deed of cancellation of an exclusive use right in terms of section 27(5) of the STA.
  2. Section 5(1)(f) of the STSMA states that a special resolution is required for the body corporate to execute on behalf of the owners a servitude or a restrictive agreement burdening the land shown on the relevant sectional plan and may accept on their behalf a servitude or restrictive agreement benefiting such land, as contemplated in section 29 of the STA.
  3. Section 5(1)(h)of the STSMA states that a special resolution is required for the body corporate to approve the extension of boundaries or floor area of a section in terms of the STA.

If your body corporate have any decisions that need to be taken and you are not sure what type of resolution is required, please contact Paddocks at consulting@paddocks.co.za.

Article reference: Paddocks Press: Volume 11, Issue 12, Page 02.
Posted In: Paddocks Press Newsletter  | 14/12/2016
http://www.paddocks.co.za/articles/
This article is published under the Creative Commons Attribution license.

Author: Carryn Melissa Durham - Paddocks

Submitted 09 Jun 17 / Views 541