Complex living, euphemistically stated, is complex.
There are several benefits to living in shared living accommodations such as complexes, apartments and retirement villages. They include increased security measures, affordability and shared maintenance responsibilities.
However, the physical proximity, legal pitfalls and forced co-operation between conflicting personalities add fuel to the fire when things go wrong.
Conflict is far more common than some would think.
According to the annual report of the Community Schemes Ombuds Service (CSOS) tabled in Parliament this month, the office received 4 060 complaints in 2017/ 18 alone. It is the first full year of dispute resolution for the CSOS and it already received complaints for more than 20% of communal schemes registered with the Ombud.
The top 5 complaints are:
- Financial issues, by a long shot (46% of all complaints for the year). The complaints include calculation and setting of levies and how money is spent on behalf of the body corporate.
- Disputes about private and common property (19%). Whether your parking bay, garage or garden is common property, part of your unit or common property of which you have exclusive use, makes the world of difference in communal schemes. It affects, amongst other issues, your maintenance obligations, the calculation of levies and freedom to make alterations.
- Behavioural issues (8%). Did someone hear a barking dog?
- Governance issues, including dysfunctional boards of trustees (6%). 5
- Management agent issues (4%).
Barbara Coetzee, a Director and sectional title law specialist at VDT Attorneys, says the barrage of complaints is not surprising. “There is a general lack of awareness about the nature and workings of communal schemes. Laws surrounding communal schemes have become increasingly complicated and onerous. They are needed to protect owners in these schemes, but also add to the confusion in some instances.”
Because of the increasing complexity and disputes around these schemes, the Community Scheme Ombud was created as a central point for complaints, although an owner and body corporate may still need to approach a court in certain instances.
Ms Coetzee says that owners need to understand their rights and obligations within a scheme, and that it is becoming essential for a body corporate and board of trustees to get appropriate management and legal advice to stay within the confines of the law.
Her top tips for owners to prevent the top complaints, are:
- Preferably before you buy into a sectional scheme, but also when you’re already an owner, it is imperative to scrutinise the financial statements of the scheme. Pay particular attention to the trend in the reserve fund for maintenance. “Recent amendments to the relevant laws place special obligations on the trustees to draft and implement a 10 year maintenance plan and to have certain levels of reserves for this purpose. If a scheme does not currently have that level, levies would have to be raised,” Ms Coetzee explains.
- Know exactly what portion of the community scheme belongs to you and which parts belong to the body corporate. “Every scheme has a registered plan indicating the different areas. Request it from your management agent or trustees. As a general rule, the inside of your unit, including the inside half of the wall, would be your property and responsibility. Obvious common property includes facilities such as a shared swimming pool or club house. However, the gray areas in most schemes are parking bays, garages and gardens.” A general rule of thumb is that limited common space, such as parking bays, belong equally to all owners in the scheme except where it was designated as an exclusive use area for a specific owner, in which case that owner will usually pay extra for this exclusive right.
- The rules of the scheme must be absolutely clear on behavioural issues and the trustees must enforce this. All rules must be registered with the CSOS who will ensure compliance with the relevant laws. “We sometimes find that new trustees or caretakers in a scheme would unilaterally change rules as they see fit. This is not lawful. A very specific process must be followed to amend scheme rules.” Ms Coetzee says that owners who rent out their units must also ensure compliance with the rules by their tenants and their guests. It is advisable to include this condition in any rental agreement and to make sure your tenants have the latest version of the scheme rules.
- In many cases, boards of trustees become dysfunctional as owners do not want to volunteer to serve on the board. In those cases, it is essential to get legal and management advice. Appointing a managing agent could alleviate the pressure on trustees, but Ms Coetzee cautions that this does not relieve trustees of all their responsibilities in terms of the law.
- Owners and trustees must be careful when appointing managing agents. “At the very least, the agent must be registered with the relevant authorities such as the Estate Agency Affairs Board, and operate a separate trust account backed up by a fidelity fund,” Ms Coetzee advises. Remember that the body corporate gives instructions to the management agent and not the other way around. From an owner’s perspective, it is often overlooked that you must keep your contact details updated with the management agent. Many disputes arise because of miscommunication as owners do not receive letters, invoices, minutes and meeting documentation.
Contact Barbara Coetzee at VDT Attorneys for specialist advice on community schemes.
Visit http://csos.org.za/ for more information on the Community Scheme Ombud.
Copyright @ VDT Attorneys® October 2018