Essential words related to sectional-titles

If you've recently moved into a home located in a sectional-title property such as an apartment, complex or duplex, chances are you may be overwhelmed with how these types of properties are managed and maintained.

If words such as Body Corporate, Homeowners Association and special levies leave you confused, read-on as we will explain popular terms related to sectional-titles and what purpose they serve.

Let's get started...

1. Body Corporate

A Body Corporate is the collective name given to all the owners of the units in a sectional title scheme. Its function is to manage and maintain the property, particularly common areas such as driveways, green spaces, and swimming pools and clubhouses. If the development is new, the Body Corporate is formed when the developer transfers a unit to the first owner. After which, an inaugural meeting will be held within 60 days of formation and this is in accordance with the Prescribed Management Rules (PMR).

2. Trustees

The trustees are a select group of owners chosen by the Body Corporate during the Annual General Meeting (AGM). They are elected through a voting process and are entrusted to manage the scheme in good faith and under the jurisdiction of the Sectional Title Schemes Management Act. Their duties are extensive and are inclusive of but not limited to financial management, maintenance management and setting up funds on behalf of the Body Corporate.

3. Homeowners Association

A Homeowners Association (HOA) is established in areas with boomed off gates or in an estate where each homeowner owns a property and the erf or plot where the property is located. The association typically owns the common areas such as the security fences, roads and boundary walls - this means that the owners do not have any right, title or interest in the common property. Besides ownership, an HOA is established by the residents to ensure safety, security and maintenance. 

4. Levies

A levy is a monthly fee charged to every owner in a sectional-title and is used for repairing, maintaining, managing and administering the common property.

5. Special Levies

If a sectional-title needs urgent property upgrades or repairs, then a special levy is charged to every owner's levy account on a monthly basis until it is no longer needed. A leaking roof, broken lift or pest control are examples of when a special levy may be implemented. These charges can be implemented by trustees even if it was not budgeted for at the last AGM.

 6. Exclusive Use Area

This refers to a part of the property that is co-owned by all the owners in a scheme and includes parts of the common property such as gardens, parking bays, courtyards, storerooms and braai areas. Owners can use and benefit from these parts of the property but they are required to keep it clean and neat and use it only for its intended purpose.

7. 10-Year Maintenance Plan

Every Body Corporate is required to prepare and implement a ten-year maintenance, repair and replacement plan (MRRP). This is set-up to safeguard and prepare a Body Corporate for significant expenses such as purchasing a new elevator. A new plan is drawn up every 7-10 years and funds to pay for the expenses are taken from the reserve fund. Read more about the reserve fund here.

8. Managing Agent

Most sectional-titles employ the expertise of a managing agent who is tasked with managing the entire property and help the trustees with various tasks. It is interesting to note that schemes who implement this service have fewer issues with levy payments, and owners enjoy a more secure and better-maintained living environment.

9. Community Schemes Ombud Service

In every sectional-title, disputes do arise, unethical behaviour may take place, and bad management may lead to a poorly run building. For all these reasons and more, the Community Schemes Ombud Service (CSOS) was established to monitor and promote good governance, develop and provide dispute resolution services; provide information and documentation to Bodies Corporate, and offer training to conciliators, adjudicators and other employees of the CSOS.

To find out more about sectional-titles or if you're looking for a trusted managing agent, speak to the trusted agents from De Lucia Group today. Michael De Lucia 082 493 1089