Guide to Sectional Title Living
This document contains important information regarding
"Sectional Title Living".
As an owner of a unit in a sectional title scheme, you own the following:
b.An undivided share in the common property.
WHAT IS A "SECTION"?
A section can be either a specific portion of a building (a flat in a multi storey apartment block) or a building in itself (a townhouse). A section must be shown on the sectional plan and each section is given a unique number. The section number does not need to correspond to the flat / townhouse number.
What is an "undivided share in the common property"? This includes the land on which the buildings are situated together with those parts of the building(s) which are not included in a section (e.g. roads, lifts, swimming pool area, staircases, carports). Lock-up garages may either be common property or constitute separate sections.
All the owners of the various sections are entitled to use the common property - However, parts of the common property may be set aside for the exclusive use of the owner of a particular section(e.g. garden adjacent to a section, carports, parking bays, patios). These exclusive use areas must be shown on the sectional title plan.
An owner may not sell his section and retain his exclusive use area. However he may sell and transfer the right to an exclusive use area to another owner of a section in that scheme.
PARTICIPATION QUOTA (PQ)
The participation quota of a section is a percentage expressed to four decimal places (e.g. 0.5478). It is calculated by dividing the floor area of a section by the sum of the floor areas of all the sections in the scheme, (i.e. the larger the section, the larger the PQ and vice versa). A schedule of PQ's is lodged together with the sectional plan at the deeds office and may only be changed with great difficulty.
WHY IS PQ SO IMPORTANT?
1. It determines the size of the owner's undivided share in the common property.
2. It determines the value of the vote of an owner of a section (in the case where the vote is reckoned by value).
3. It determines the amount of the owner's levy.
4. It determines the amount a particular owner can be held liable for the payment of a judgement debt of the body corporate.
THE BODY CORPORATE
A Body corporate is formed on the date the developer transfers the first section to another owner. The body corporate is made up of all owners of a section in a sectional title scheme.
DUTIES AND POWERS OF THE BODY CORPORATE.
1. The Body Corporate must establish a fund for administrative expenses which it believes will be sufficient for the repair, upkeep, control, management and administration of the common property, reasonable provision for future maintenance and repairs, for rates and taxes and the supply of electricity, water and other services to the building. You the owner have the responsibility to maintain and repair your section. The dividing line between your section and the common property is the middle of the wall surrounding your section.
2. The Body Corporate must insure the building to its replacement value against fire and other prescribed risks and pay the premiums from the fund. (It is your responsibility to insure your possessions).
3. The Body Corporate may require the owners, whenever necessary, to contribute to this fund to an amount determined by it from time to time. This is your levy, which must be paid on the first of each month in advance. The Body Corporate may charge interest on outstanding amounts.
4. The Body Corporate must maintain the common property.
1. The Body Corporate may appoint such agents and employees as it may deem fit.
2. The Body Corporate may purchase, hire or otherwise acquire movable property for the use of owners for their enjoyment or protection, or in connection with the enjoyment or protection of the common property.
3. The Body Corporate may establish and maintain on the common property suitable lawns and gardens and recreational activities.
4. The Body Corporate may borrow monies required by it in the performance of its functions or the exercise of its powers. 5. The Body Corporate may invest any moneys of the fund.
6. The Body Corporate may do all things reasonably necessary for the enforcement of the rules and for the control, management and administration of the common property.
The trustees are elected at the first general and each subsequent annual general meeting (AGM), and hold office from the one AGM to the next AGM. The members of the Body Corporate determine how many trustees will hold office for the period, but there may not be less than two trustees at any time.
A trustee does not have to be an owner provided that the majority of trustees are owners, or spouses of owners, and provided that the Managing Agent in that capacity may not be a trustee.
MANAGEMENT AND CONDUCT RULES
A sectional title scheme is controlled and managed by the Body Corporate by means of rules. The rules comprise both management rules and conduct rules.
The management rules cover the following points:
1. Domicilium of the Body Corporate (it's legal address)
2. Trustees (all matters to do with trustees and their meetings their duties and obligations).
3. Meeting of owners.
a. Annual General Meetings are held once a year.
b. 14 days’ notice for each AGM must be given and must be accompanied by the following:
i.Schedule of replacement value of the building and all improvements to the common property and the replacement value of each unit.
ii. Proposed budget for the forthcoming year.
iii. Annual Financial Statements for the period.
iv. A chairman's report.
Voting at the AGM is done on a show of hands - each owner having one vote, unless prior to the vote a request is made for a poll, in which case the PQ will be used to establish the value of the vote.
The conduct rules cover the following:
a. Pets - Owners must obtain the permission of the trustees in writing to keep pets. Owners of pets must have consideration for their neighbours. Barking dogs are a nuisance to everyone except for their owners.
b. Refuse disposal. (Place it in the designated areas at the times decided by the trustees)
c. Vehicles (Parking, speeding, washing and oil leeks)
d. Damage, alterations and additions to the common property.
e. Owners may not put anything on any part of the common property which in the discretion of the trustees is aesthetically displeasing or undesirable, when viewed from the outside of the section.
f. Placing of Advertising signs and notices.
g. Littering. (It is your complex - litter leaves a bad impression).
h. Laundry - owners may not hang laundry so as to be visible from outside the buildings or from any other sections.
i. Storage of inflammatory material and other dangerous acts.
j. Letting of units - all tenants must abide by the management and conduct rules.
k. Eradication of pests.