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What is Community living?

Introduction

As South Africa’s population is increasing, the prospect of community living has become a favourable solution for many South Africans, with approximately fifty-eight thousand developments made up of Body Corporates, Share Blocks and Homeowners Associations, community living has become a significant contributor to the South African economy.

Community living is not only affordable, but also an opportune lifestyle choice, that benefits people from all walks of life. Members of a community have the opportunity to share common interest with neighbours and enjoy common area facilities, such as a play park or swimming pool, which could be too costly for an individual to maintain on their own.

Together with the many advantages of community living, certain commitments are required from an owner, which in most cases differ somewhat from that of the conventional land or home ownership, for example a Sectional Title Development, requires the input from all members when it comes to the decision making of shared responsibility matters of the community.

Owners new to sectional title living are often uncertain about their rights and responsibilities as part of a community living development, which is why Solver Property Services, as Sectional Title Experts have put together this guide for easy community living.

The information contained herein, provides a valuable guide regarding community living and the rights and obligations of owners within the community.

This guide contains general information for those owning or looking to buy into community schemes. The information contained herein is aimed to advise owners and potential buyers of what community living entails and should not be taken as legal advice.

Should you require further information, kindly contact the Solver Property Services offices on 010 822 2882 or alternatively email info@solver.co.za. For matters that cannot be resolved internally, members may log a dispute through the Community Schemes Ombuds Service (CSOS).

Community Scheme’s Explained

A community scheme, as described by The Community Scheme Ombud Service Act of 2011 is defined as ‘’Any scheme or arrangement in terms of which there is a shared use of and responsibility for parts of land and buildings’’ examples of community schemes include:

  • Sectional Titles Developments
  • Share Block Developments
  • Homeowners Association Developments
  • Business Park Developments

These developments consist of shared common property and individually owned erfs or units.

In a community scheme, owners have the choice to either privately own a section of land (Homeowners Association) or a section of a building (Body Corporate) along with a share of the common property.

If you are considering buying into a community scheme, it is important that you understand your rights and responsibilities as an owner and not only for your property but for the shared common property as well.

For this purpose, the conduct rules of the scheme are the best place to start. Another important aspect is understanding what common property is and the costs involved on the upkeep and general maintenance of these areas.

General Common property areas include but are not limited to:

  • Roadways
  • Parking bays
  • Communal lifts
  • Stairway/s
  • Swimming pool/s
  • Playground/s
  • Gym
  • Tennis court/s
  • Squash court/s
What is a Body Corporate?

The expression Body Corporate is a term used to define the owners within the scheme, a Body Corporate is made up of all the owners within the scheme and comes into existence when the first unit is sold and transferred by the developer and the Inaugural Meeting has been held.

A Body Corporate is a legal entity which may institute or face legal action and in order to be compliant must adhere to The Sectional Titles Schemes Management Act (STSMA), The Prescribed Management Rule (PMR), The Community Schemes Ombud Service Act and the Council By-Laws.

At an Annual General Meeting the owners or their representatives (also referred to as a proxy) decide on important matters relating to shared responsibilities. These include:

  • The management of the scheme.
  • Maintenance of common property.
  • Insurance.
  • Approval of the budget.

When buying into a Body Corporate it is recommended that you find out if there are any outstanding fees and charges still owing by the Body Corporate, as a new owner in the scheme, you will be required to honour the payments.

What is a Share Block Development?

Plainly put, a share block development is another form of property ownership, it allows for a single company to own a development, whilst allowing individuals to purchase the right to use a specific section or space within the development.

In a Share Block development, the Directors are tasked with the management of the company and are bound in terms of the Companies Act as well as the Share Blocks Control Act. Unlike a Body Corporate, the Directors of the company may take all management decisions without the consultation of the shareholders.

What is a Homeowners Association?

In a Homeowners Association, an owner is given a registered title deed to a conventional property, in other words you own the building as well as the immediate land that it is situated on and as such you are responsible for the maintenance and upkeep of the property both inside and outside.
The Homeowners Association, however, is responsible for the general upkeep and maintenance of the common areas and is governed by the Companies Act.
A Homeowners Association is also obligated to hold an Annual General Meeting whereby important matters relating to the association is discussed and voted on, these include:

  • The management of the association.
  • Maintenance of common property.
  • Insurance pertaining to the common areas.
  • Approval of the annual budget.
What is a Committee?

At the Annual General Meeting, the members of the scheme must elect a committee. The committee is made up of a chairperson, treasurer, and secretary and may also have additional serving members. It depends on the type of scheme and their rules but, generally, a community scheme must have a minimum of two or three committee members. Your Solver Property Portfolio Manager can advise you further in this regard.

What does it entail: Over and above the day to day running of the scheme a committee member must adhere to the following:

Familiarise themselves with the Sectional Titles Act, or in the case of Homeowners Associations or Share Blocks, the Memorandum of Incorporation.

  • Make sure levies are settled to date.
  • Enforce the rules of the complex.
  • Approve and adhere to the budget of the scheme.
  • Work closely with the managing agent and estate manager to ensure matters are addressed timeously.
  • Ensure that the complex is adequately insured.
  • Approve maintenance projects within the complex.


All committee members must adhere to their fiduciary duty towards the scheme and must always:

  • Act honestly and in good faith.
  • Act in the best interest of the Body Corporate / Owners Association / Share Block.
  • Avoid material conflict between their own interests and that of the scheme.
  • Not receive any personal financial benefit, unless agreed upon by the members at a general meeting.
  • Notify other committee members of any interests he/she may have.
Common Property Maintenance

This varies from scheme to scheme, however, the Sectional Titles Schemes Management Act 8 of 2011 states that a scheme must maintain the common property and as per the Community Schemes Ombud Service Act. Therefore, Body Corporates are obligated to also have a 10 Year Maintenance Plan in place for the purpose of maintaining major capital maintenance items such as the painting of the scheme, roof repairs, re-tilling of walkways, pool refurbishment etc…

When it comes to the maintenance of the common property, the committee members, will source the services of professionals to carry out the required maintenance. Should the required maintenance exceed the financial restriction imposed on the committee members at the annual general meeting, a special general meeting may be required to vote on their preferred course of action. Your Solver Property Portfolio Manager can advise you further in this regard.

The Annual General Meeting

An Annual General Meeting is a yearly meeting of owners or shareholders of a scheme and requires a notice period of 14 days for Body Corporates and usually 21 days for Homeowners Associations. At the annual general meeting, owners are tasked to consider the financial position and direction of the scheme.

The agenda of the AGM usually contains the following – depending on the type of scheme:

  • Budget approval.
  • Consideration of the Annual Financial Statements.
  • Appointment of an auditor.
  • Insurance.
  • Election of Committee members.
  • Address all general items submitted by members 48 hours prior to the meeting.
A Special General Meeting (SGM) on the other hand may be held during the year, in the event where there are urgent matters that must be discussed and voted on by the members and usually requires a longer notice. ie. 30 days’ notice. However, this is dependent on the type of scheme, and this can sometimes be shortened based on the urgency of the matter.

 

The Costs Involved To A Community Member?

The costs involved (levies) to a member of a community scheme is determined by the financial obligations of the scheme, which usually include items, such as:

  • The insurance premium.
  • Audit and bank charges
  • General upkeep of the common property.
  • Garden and cleaning.
  • Pool maintenance.
  • Management services
  • Employee expenses
  • Council charges
  • Association levies
  • Legal costs
  • Access control
  • Security services and armed response
  • Reserve fund contributions
  • CSOS contributions and more…

The various financial obligations of the scheme are calculated and approved in the annual budget by the committee members and circulated to the members prior to the annual general meeting (AGM).

The non-payment of levies ultimately results in the scheme failing to meet its financial obligations, which could result in the suspension of service from service providers or even the disconnection of utilities from council (In Body Corporates). In severe cases non-payment of levies could lead to an administrator being appointed by the court to take over from the committee members.

Consequences of late or non-payment
In a community scheme, levies are due and payable, in advance, on the 1st of the month. Any owner who pays late will be subject to additional charges such as interest and/or charges for the issuing of arrears notices.

Continually defaulting on a levy payment, may ultimately result in the account being handed over to complex attorneys for legal collection, which will result in blacklisting, negative credit records, the sheriff auctioning the defaulter’s belongings or even the property.

It is important to note, when an account has been handed over for legal collection, the defaulting owner will be liable, for the arrears on the levy account as well as any legal fees that may arise.

Buying To Invest

Buying into a community scheme as an investor, your rights and responsibilities remain the same as if you were living in the property, the property maintenance, levies and associated costs remain payable by you as the owner.

It is the responsibility of you as an owner to ensure that Solver Property Services have your correct postal address, email address and contact number.

When letting your unit, a new resident form must be completed by the tenant and returned to the Solver Property Services offices, this information is used to register the occupant on the access control system and for record purposes in case of an emergency

What Are Conduct Rules?

The conduct rules of a scheme, outline the duties and responsibilities of an owner/resident in a community development and as such set the tone for a harmonious living environment. The rules should be registered and approved by The Community Schemes Ombud Service (CSOS).

Owners and residents must ensure that they are in possession of a copy of the rules of the scheme and that they familiarise themselves with this document. The same can be said for potential buyers as the rules will allude them to what is or is not permissible within the scheme, a good example of this will be pets in a community scheme. Where some schemes permit the keeping of a pet, others adhere to a strict no pets policy, which is good to know before buying or renting within a scheme.

Get The Foundations Right

When buying into a community scheme you will need to do your homework. The more information you can obtain regarding the scheme, the better equipped you will be to make an informed decision.

It is important to investigate possible future developments in and around the scheme, as well as possible adjudication orders concerning the scheme. Another important matter to pay special attention to is the financial stability of the scheme and any possible debt owing by the complex.

As a potential investor, doing your due diligence is of the utmost importance and this will also include enquiring whether certain exterior improvements to the section, such as the enclosure of a balcony or the installation of an air conditioning unit have been approved by the committee and if so, what conditions apply to the approval. Do not be shy to request a copy of the approval given as this will save you a lot of leg work in future, if this is ever challenged.

So, You Are A New Owner, What’s Next?

Once you have signed on the dotted line and the registration has been concluded, you will need to ensure that this information is communicated to your managing agent by your transferring attorneys and that the information provided is true and accurate as it will be used for all future communication.

This information will allow the Solver Property Services, as the managing agent, to create a unit profile in your name as the unit owner and issue you with a welcome pack containing important information relating to the complex such as the banking details, your levy statement and invoice, the conduct rules (and MOI (Memorandum of Incorporation) in the case of a Homeowners Associations and Share Blocks) and a debit order form, should you wish to make use of this easy payment method.

It is important that you are in possession of all relevant documents relating to the scheme, some of which include the sectional plans and the zoning certificate. If these are not available through your managing agent, they may be obtained through the Surveyor Generals offices.

The Buyers Checklist

  • By purchasing a property in a community scheme, do you know you will form part of that scheme?
  • Are you aware of any contracts or debt that the scheme has entered into?
  • Do you understand the conduct rules of the scheme and how the rules apply to you?
  • Do you understand your financial contribution (levies) to the scheme?
  • Do you understand the maintenance responsibilities you have?
  • Do you understand the role of the managing agent and/or estate manager (if applicable)?
  • Have you confirmed that any exterior alterations to the section have been approved?
Effective Property Management

Unlock effective sectional title management with expert tips from Solver Property Services. Enhance your property’s value and community harmony today!

Understanding Sectional Title Management

Sectional title management is a specialised field within the property management sector that deals with the administration and oversight of properties divided into sections and common areas. These properties, often residential complexes or townhouses, require a unique approach to management due to their shared ownership structures. In a sectional title scheme, individual owners possess their units while sharing ownership of common property areas such as gardens, pools, and hallways. This dual ownership framework necessitates effective management practices to ensure both individual and collective interests are maintained.

Effective sectional title management is crucial for maintaining the value of the property and ensuring a harmonious living environment for all residents. It involves a range of tasks, from financial management and maintenance to legal compliance and conflict resolution. A well-managed sectional title scheme can enhance the overall quality of life for its residents, making it a desirable place to live while also protecting and potentially increasing property values. Conversely, poor management can lead to disputes, financial difficulties, and a deterioration of the property, which ultimately affects everyone involved.

Solver Property Services is a leader in the field of sectional title management, offering expert advice and services to ensure properties are managed efficiently and effectively. With years of experience and a deep understanding of the complexities involved, Solver Property Services provides invaluable insights and practical tips to help trustees and managers navigate the challenges of sectional title management. By implementing these tips, you can enhance the functionality, value, and harmony of your sectional title scheme.

The Importance of Effective Communication

Effective communication is the cornerstone of successful sectional title management. It ensures that all stakeholders, including trustees, property owners, residents, and the management team, are on the same page regarding the operations and administration of the property. Clear, consistent, and open communication helps to build trust, foster transparency, and prevent misunderstandings, which can lead to disputes and dissatisfaction among residents.

One of the key aspects of effective communication is ensuring that all relevant information is readily accessible to everyone involved. This includes financial reports, maintenance schedules, meeting minutes, and any other important documentation. Regular updates and clear channels of communication, such as newsletters, notice boards, and digital platforms, can keep residents informed and engaged with the management processes. It’s also essential to provide opportunities for feedback and input from residents, as their insights and concerns are valuable for making informed decisions.

Moreover, effective communication extends to handling complaints and conflicts in a timely and respectful manner. Addressing issues promptly and professionally can prevent them from escalating and can demonstrate to residents that their concerns are taken seriously. By establishing a culture of open dialogue and responsiveness, sectional title managers can create a more cohesive and cooperative community environment. Solver Property Services emphasises the importance of communication and provides tools and strategies to enhance communication within sectional title schemes, ensuring that all parties feel heard and valued.

Key Responsibilities of a Sectional Title Manager

The role of a sectional title manager encompasses a wide range of responsibilities aimed at ensuring the smooth operation and maintenance of the property. These responsibilities are critical for maintaining the value of the property and ensuring the satisfaction and well-being of the residents. A sectional title manager acts as the liaison between the property owners, trustees, residents, and service providers, coordinating various tasks and addressing any issues that arise.

One of the primary responsibilities is overseeing the financial management of the property. This includes preparing and managing budgets, collecting levies, paying bills, and ensuring that the property’s finances are in order. Accurate financial management is essential for maintaining the property and funding necessary repairs and improvements. The sectional title manager must also ensure that financial reports are transparent and accessible to the owners, fostering trust and accountability.

In addition to financial management, the sectional title manager, together with the trustees, is responsible for the maintenance and upkeep of the common property areas. This involves coordinating with contractors and service providers to ensure that the property is well-maintained and any necessary repairs are carried out promptly. Regular maintenance not only enhances the aesthetic appeal of the property but also prevents larger, more costly issues from arising in the future. The manager must also ensure that the property complies with all relevant regulations and standards, which involves staying up-to-date with any changes in legislation and implementing necessary measures to ensure compliance.

Financial Management for Sectional Titles

Financial management is one of the most critical aspects of sectional title management, as it directly impacts the property’s maintenance, value, and overall functionality. Effective financial management involves meticulous planning, transparent reporting, and diligent oversight to ensure that the property’s finances are healthy and well-managed. To support the trustees, a sectional title manager must be adept at budgeting, levy collection, expense tracking, and financial reporting to maintain the community’s financial stability.

Budgeting is the foundation of financial management for sectional titles. A well-prepared budget outlines the expected income and expenses for the property, allowing for effective financial planning and allocation of resources. The budget should account for both regular operational costs, such as utilities and maintenance, and any anticipated capital expenditures, such as major repairs or improvements. By creating a comprehensive budget, the sectional title manager can ensure that there are sufficient funds to cover all necessary expenses and avoid financial shortfalls.

Levy collection is another crucial aspect of financial management. Levies are the primary source of income for sectional title schemes, and timely collection is essential for maintaining cash flow and funding the property’s operations. The trustees, supported by the sectional title manager, must implement efficient levy collection processes (For which Solver Property Services can prepare the necessary guidance and expertise), including setting clear payment deadlines, providing convenient payment options, and addressing any overdue accounts promptly. Transparent communication with owners regarding the purpose and necessity of levies can also help to foster understanding and compliance.

Accurate financial reporting is essential for transparency and accountability. Regular financial reports provide a clear overview of the property’s financial status, including income, expenses, and any outstanding liabilities. These reports should be shared with the trustees to keep them informed and engaged with the financial management process. Solver Property Services emphasises the importance of financial transparency and provides tools and strategies to help sectional title managers maintain accurate financial records and communicate effectively with trustees and owners. At Solver Property Services, Trustees are granted full viewing access to all financial platforms, ensuring complete transparency at all times.

Maintenance and Upkeep of Common Property

The maintenance and upkeep of common property areas are vital for ensuring the property’s overall appeal, functionality, and value. Common property areas, such as gardens, pools, hallways, and recreational facilities, are shared by all residents and require regular attention to keep them in good condition. Effective maintenance management involves proactive planning, timely repairs, and ongoing monitoring to address any issues before they escalate.

A proactive maintenance plan is essential for managing the upkeep of common property areas. This plan should include a schedule of regular inspections and maintenance tasks, such as cleaning, landscaping, and equipment servicing etc. Regular maintenance not only enhances the property’s aesthetic appeal but also prevents more significant problems from arising, ultimately saving time and money in the long run.

Timely repairs are crucial for maintaining the property’s functionality and safety. When issues are identified, they should be addressed as soon as possible to prevent further damage and inconvenience to residents. The sectional title manager should have a network of reliable contractors and service providers who can respond quickly and efficiently to repair requests. Clear communication with residents regarding the status of repairs and any potential disruptions can also help to manage expectations and reduce frustration.

Ongoing monitoring and maintenance are necessary to ensure that the property remains in good condition over time. This includes keeping an eye on wear and tear, addressing any emerging issues, and updating the maintenance plan as needed. Solver Property Services emphasises the importance of regular maintenance and provides tools and strategies to help sectional title managers implement effective maintenance plans and coordinate repairs efficiently.

Conflict Resolution Strategies

Conflict is an inevitable part of any community living arrangement, and sectional title schemes are no exception. Disputes can arise between residents, between residents and the trustees, or between the trustees and service providers. Effective conflict resolution strategies are essential for maintaining a harmonious living environment and preventing disputes from escalating and causing long-term damage to relationships and the property’s reputation.

One of the key strategies for conflict resolution is fostering open and respectful communication. Encouraging residents to express their concerns and grievances in a constructive manner can help to address issues early and prevent misunderstandings. The sectional title manager should create clear channels for residents to voice their concerns, such as email or telephonic communication, regular meetings etc. By listening to residents and taking their concerns seriously, the manager can build trust and demonstrate a commitment to resolving issues.

Mediation is another effective conflict resolution strategy. When disputes arise, a neutral third party can help to facilitate discussions and find mutually acceptable solutions. The sectional title manager can act as a mediator or enlist the help of a professional mediator if needed. Mediation can help to de-escalate conflicts, promote understanding, and reach agreements that satisfy all parties involved. By addressing conflicts in a fair and impartial manner, the manager can help to maintain a positive and cooperative community environment.

Clear policies and procedures for handling conflicts are also essential for effective conflict resolution. These policies should outline the steps for reporting and addressing disputes, as well as the consequences for non-compliance. Having clear guidelines in place can help to manage expectations and ensure that conflicts are handled consistently and fairly. Solver Property Services provides expert advice and resources to help sectional title managers develop and implement effective conflict resolution strategies, ensuring that disputes are resolved quickly and amicably.

Legal Compliance and Regulations

Legal compliance is a critical aspect of sectional title management, as it ensures that the property operates within the framework of relevant laws and regulations. Failure to comply with legal requirements can result in penalties, disputes, and potential damage to the property’s reputation. A sectional title manager must stay up-to-date with current legislation and assist in implementing necessary measures to ensure compliance with all applicable laws and regulations.

One of the primary legal requirements for sectional title schemes is adherence to the Sectional Titles Act and related regulations. This legislation governs the management and administration of sectional title properties, including the responsibilities of the body corporate, the rights and obligations of owners, and the procedures for meetings and decision-making. The sectional title manager must assist in complying with these regulations, including maintaining accurate records, holding regular meetings, and adhering to voting procedures.

Solver Property Services emphasises the importance of legal compliance and provides resources and support to help sectional title managers navigate the complexities of relevant legislation. By staying informed and implementing necessary measures, managers can assist their properties in operating within the law and maintain a positive reputation.

Enhancing Community Engagement

Community engagement is a key factor in creating a positive and cohesive living environment within sectional title schemes. When residents feel connected and engaged with their community, they are more likely to take pride in their property, participate in decision-making processes, and contribute to the overall well-being of the property. Enhancing community engagement involves creating opportunities for interaction, fostering a sense of belonging, and encouraging active participation from residents.

Another important aspect of community engagement is encouraging resident participation in decision-making processes. Regular meetings, such as annual general meetings (AGMs) and special general meetings (SGMs), provide forums for residents to voice their opinions, vote on important matters, and stay informed about the property’s management. The sectional title manager should ensure that meetings are well-organised, transparent, and accessible to all residents. Providing clear information and addressing any questions or concerns can help to foster trust and encourage active participation.

Solver Property Services provides tools and strategies to help sectional title managers enhance community engagement (such as newsletters and training events) and create a positive living environment. By fostering a sense of connection and encouraging active participation, managers can build a stronger and more cohesive community.

Leveraging Technology for Better Management

In the modern era, technology plays a crucial role in enhancing the efficiency and effectiveness of sectional title management. Leveraging technology can streamline administrative tasks, improve communication, and provide valuable insights for better decision-making. By adopting the right technological tools and platforms, sectional title managers can enhance their management practices and create a more efficient and responsive system.

One of the key benefits of technology is its ability to streamline administrative tasks. Property management software can automate various processes, such as levy collection, financial reporting, and maintenance scheduling. This not only saves time but also reduces the risk of errors and ensures that tasks are completed efficiently. With centralised data management, sectional title managers can easily access and update information, track progress, and generate reports. This can help to improve overall productivity and ensure that the property’s operations run smoothly.

Solver Property Services emphasises the importance of technology in sectional title management and provides resources and support to help managers adopt and integrate technological solutions. By leveraging technology, managers can enhance their management practices, improve communication, and create a more efficient and responsive system. Contact Solver Property Services for more information on their app, online portal etc.

Next Steps for Trustees

Effective sectional title management is essential for maintaining the value and functionality of the property and ensuring a harmonious living environment for residents. By understanding the key aspects of sectional title management and implementing best practices, trustees and managers can enhance the overall quality of life within their community. Solver Property Services provides expert advice and resources to help trustees and managers navigate the complexities of sectional title management and achieve success.

The first step for trustees is to prioritise effective communication within their sectional title scheme. Clear, consistent, and open communication helps to build trust, foster transparency, and prevent misunderstandings. By providing accessible channels for information sharing and encouraging feedback, trustees can create a more engaged and cooperative community.

Next, trustees should focus on financial management to ensure the property’s financial stability and sustainability. This includes preparing and managing budgets, collecting levies, and maintaining accurate financial records. Transparent financial reporting and timely levy collection are essential for maintaining cash flow and funding necessary repairs and improvements.

Maintenance and upkeep of common property areas are also critical for preserving the property’s value and appeal. Trustees, with the support of Solver Property Services, should implement proactive maintenance plans, coordinate timely repairs, and conduct regular inspections to address any issues before they escalate. By prioritising maintenance, trustees can enhance the property’s aesthetic appeal and functionality.

Conflict resolution strategies are essential for maintaining a harmonious living environment. Trustees should foster open communication, implement mediation processes, and establish clear policies for handling conflicts. By addressing disputes promptly and fairly, trustees can create a more positive and cooperative community.

Finally, trustees should get their managing agents to leverage technology to enhance their management practices (As Solver Property Services do). By adopting property management, trustees can streamline administrative tasks, improve communication, and make more informed decisions.

Solver Property Services is committed to providing expert guidance and support to trustees and Property Owners. By implementing these sectional title management tips, trustees can enhance the value, functionality, and harmony of their properties, creating a positive and thriving community for all residents.

Disclaimer: This article is for general informational purposes only and should not be considered legal advice. Community Schemes should consult professional legal advisors to ensure compliance with applicable laws and regulations.

Solver Property Services is a leading property management company in South Africa, dedicated to supporting community schemes since 2005. For more information, contact us at 010 822 2882 — our expert team is ready to assist you.