Useful Sectional Title terms - Part 2

Category Property Management

Useful Sectional Title terms - Part 2
Article by Kerry Olivier - ANGOR Property Specialists

Special Resolution
A resolution passed by at least 75%, calculated both in number and value, of the votes of the members of a body corporate who are represented at a duly constituted general meeting (75% of quorum).  Alternatively, it is agreed to in writing by members of a body corporate holding at least 75%, calculated in value and number, of all the votes. 

30 days’ notice of the meeting requiring a special resolution must be given. Examples requiring a special resolution:  Making or changing conduct rules, extending the boundaries of a section. 

Unanimous Resolution
All owners (unanimous) at the duly constituted general meeting must vote in favour of the resolution. If one owner is against the resolution, the motion is defeated.  At least 80% of owners, calculated both in value and in number, constitute the quorum.  30 days’ notice of the meeting requiring a unanimous resolution must be given. Examples requiring a unanimous resolution: Loans made from body corporate funds, changing Management Rules, leasing or selling part of the common property.

The number of people required (in person or by proxy) to be present before a meeting commences and must remain present for the duration of the meeting.

Trustee Meeting 

  • 50% of the Trustees by number (Not less than 2).

AGM's & SGM's (including where a special resolution will be taken)

  • Schemes with less than 4 primary sections - two thirds of total votes of members in value.
  • Schemes with more than 4 sections – one third (33.3%) of the total votes of members in value.

Meetings where a unanimous resolution will be taken

  • The quorum increases to 80%.

A proxy is a person who is designated by the owner to represent that individual at a meeting. The designated person may speak and vote on behalf of the owner.  A person may not act as a proxy for more than 2 other members.  A proxy form must be completed and delivered to the Managing Agent at least 48 hours prior to the meeting, or handed to the Chairman before or at the start of the meeting. A proxy cannot be the Managing Agent, or an employee of the Managing Agent or Body Corporate, unless he / she is a member.  

Not Reasonably Necessary Improvement
Non-necessary improvements to the common property. Example: installing a Jungle Gym. A unanimous resolution is required to proceed with an improvement which is not deemed to be reasonably necessary.

Reasonably Necessary Improvement
Useful or necessary improvements to the common property that would benefit the Scheme and that can be paid for from Body Corporate funds. Trustees must notify the owners of the need for the improvement, the cost and how it will be funded. If Trustees do not receive a request for a meeting to discuss the improvements within 30 days, they may proceed. 

Management Rules
Rules that describe the powers and responsibilities of the Trustees, and deal with the ways that the Trustees manage the Body Corporate (Annexure 1 of the Sectional Titles Schemes Management Act 8 of 2011 Regulations). The Management Rules can only be changed by way of a unanimous resolution.

Conduct Rules
Rules that determine the behaviour of the residents (owners, tenants and guests) living in / visiting the Scheme. Trustees have a duty to enforce the conduct rules. A special resolution is required to change the conduct rules of a Scheme. 

Home Insurance (Body Corporate / Sectional Title Insurance)
Insurance cover over the structure of your section. The Body Corporate is responsible for obtaining and maintaining home insurance. This forms part of the monthly levy (contribution).

Household Insurance
Insurance cover over the contents of your section. The resident of the unit (owner/ tenant) is responsible for obtaining and maintaining household insurance. 

Fidelity Fund Insurance
Insurance specifically covering Scheme executives, Scheme employees, the Managing Agent and employees against loss of money and fraud, sustained as a result of any act of fraud or dishonesty committed by any insurable person.

Liability Insurance
Insurance that provides protection from claims arising from injuries or damage to other people or property.

Rates and Taxes
Charges levied by the local municipality, based on the market value of properties, which are recorded in the General Valuation Roll. The rates and taxes are used to pay for public services provided by your local municipality, including the maintenance of roads and traffic control, and to provide public parks, libraries, clinics, recreation centres, etc. These chargers will be on a separate statement received from the local municipality. Responsibility lies with the owner to receive and pay the account. 

Domestic Effluent
The waste water from your section that flows into the city's sewage system. Waste water comes from your basins, sinks, showers, baths and toilets. The monthly fee collected is used to maintain the sewage system and to treat, clean and purify the waste water.  This is calculated and charged at a fixed rate according to Municipal By-Laws across the various municipal districts. 

Domestic Refuse
The refuse from homes that is disposed of in bins and collected by the municipality. The monthly fee, payable to the local municipality, pays for this service to collect the refuse.

The Community Scheme Ombud Services (CSOS) which came into operation during October 2016.  Various and wide-ranging matters may be taken to CSOS for their adjudication. Example: Governance, financial and behavioral matters within the Scheme.  CSOS provides schemes with a Dispute Resolution Process.

Author: Kerry Olivier - ANGOR Property Specialists

Submitted 08 Jun 18 / Views 5453