Tarleys Trust
0 comments 22.01.2016
Sectional Title 101
By: Bradley M Berman & Jaclyn M Berman

1. Introduction
One of the most popular trends in the South African housing market is that of Sectional Title Ownership.
Sectional Title allows Owners to be part of a Sectional Scheme, allowing a significant reduction in the price of Property Ownership.
Many Owners are often confused about certain Sectional Title concepts which we have attempted to address in the hope of achieving a greater understanding of Sectional Title.
2. What is Sectional Title?
Sectional Title occurs when an ERF (a piece of land) is divided into many sections which are sold to individual owners who then own their section as well as their portion in undivided shares in the common property.
The most common example of Sectional Title is a complex divided into many units, each of which is individually owned. It is not limited to this example as a Scheme can comprise of freestanding houses as well. The common property comprises of all areas which do not form part of sections (ie. Stairs, passages, communal pool, etc).
3. What are my responsibilities as an Owner in a Sectional Scheme?
As an Owner, your responsibilities are to not infringe upon the rights of other owners and to make timeous payment of levies to the Body Corporate as well as payment of the applicable Rates to the City of Cape Town.
4. What is a Body Corporate?
A Body Corporate comes into existence at the time the first transfer takes places from the developer or entity responsible for the opening of a Sectional Title register. A Body Corporate is an independent legal subject which is represented by the Trustees in terms of the mandates and powers conferred upon them in the Management Rules and as decided at the Annual General Meetings from time to time. Most Bodies Corporate appoint a Managing Agent to attend to the many tasks Trustees are burdened with and make the necessary representations on their behalf.
The Body Corporate is formed in order to ensure the day-to-day tasks of running and maintaining the building are performed, and any obligations of the owners and Trustees in respect of the common property are fulfilled.
5. What is an Annual General Meeting (AGM)?
An Annual General Meeting is a meeting which usually takes place once a year, within 4 months of the financial year-end of the Body Corporate.
This is where the Trustees are elected and the powers, directions and restrictions of the Trustees and Managing Agents are conferred upon the respective parties.
6. What are Conduct Rules?
Conduct Rules are the rules of the complex which every owner should be fully acquainted with. These rules confer certain directions, restrictions and sanctions to residents of the complex, all of whom are equally bound by the same rules in order to ensure harmonious living amongst all residents within the Scheme.
It is a legal requirement that the Conduct Rules are attached to every lease in respect of Sectional Title property. The failure to attach the Conduct Rules to a lease may render it void. It is for this reason that residents may never claim they are unaware of the contents of the Conduct Rules.
7. What are Management Rules?
Management Rules are the rules conferring certain directions, restrictions and powers relating to the Management of the Sectional Title Scheme to the representatives acting on behalf of the Body Corporate.
8. What are the Body Corporate’s Responsibilities?
The responsibilities of the Body Corporate are simply to ensure all rules are being followed, the common area is maintained to the standard to which it should be, the levies are paid on time by the owners. Should an owner fall into arrears, the Body Corporate is mandated to take appropriate action against the owner who has failed to fulfill his obligations.
9. What is a Managing Agent?
A Managing Agent is appointed to Manage the affairs of the Body Corporate on behalf of the Trustees and Owners. Managing Agents act on instruction of the Trustees.
The Managing Agent is the interface through which owners communicate with the Trustees of the Body Corporate.
10. What are Levies?
Levies are payable by each owner in proportion to the size of their Section/s seen against the total square meterage of all the sections (expressed as a percentage). This is known as a participation Quota
[Example: 10 units of 15/m2 each will total 150/m2 of individually owned sections. Each unit therefore owns 10% of the common property in undivided shares and the owners are liable for a 10% contribution towards the levies.
Levies are made up of the annual expenses (or foreseeable expenses) as decided at the Annual General Meetings. Any surplus remaining after payment of monthly expenses is invested into a reserve fund for future use which attracts a higher interest rate as compared to the current account.
11. How does the insurance for the building work?
The Body Corporate (and usually, the Managing Agents) are responsible for insuring the building adequately. The insured amount is reviewed annually at the Annual General Meeting.
The structure of the building is insured but not the land on which the building is built. The insured amount is based on the cost of rebuilding the building in the event of destruction. Various other items are also encompassed in the insurance policy. Ie. Geysers, burst pipes, etc.
Please see our Sectional Title insurance article for more information.
12. Who are Tarleys Trust and how do they fit into the picture?
Tarleys Trust Property Group is a company which services many aspects of the property industry. One of the many functions performed is the management of Bodies Corporate.
Tarleys is therefore the interface between the Owners and Trustees who manage the various aspects of the day-to-day running of the common property as well as the collection of levies and the administrative functions of the Body Corporate.
Any problems relating to the common property or running of the common areas should be directed to Tarleys for the appropriate assistance, failing which they will direct you to the appropriate person for speedy resolution to the matter.
13. How to read our statements
Statements are sent out on a monthly basis, the date of the statement can be found on the top Right hand corner of the statement. Should any payments be made after the date on which the statement was printed, these payments will not reflect on that statement.
Please always check your statements to ensure payments have been captured correctly. Should any payments not be captured please send proof of the deposit to the accounts department (accounts@tarleys.co.za) who may then allocate the funds correctly.
It is very important to always use the reference given at the bottom of the statement as this facilitates for the correct capture of all amounts paid.
Levies are payable by the 7th of each month, in advance, and are payable regardless of whether or not a statement has been received.
14. What do I do in case of an emergency?
The first determination that should always be made is the cause of the problem. Determining the cause will usually lead you to the responsible party and consequently the person with whom you should be dealing.
As the Body Corporate may not concern itself with matters within an owners individual section, any emergency which stems from either the outside of the section (including another owners section) should be directed to the Managing Agent for assistance. The portfolio manager for your complex will be able to assist you with the appropriate action which will need to be taken in the case of an emergency.
Our online helpdesk can be found on our website (www.tarleys.co.za) and can be consulted as a guideline for assistance.
Emergency after hours support is also provided to our clients and can be reached on 084 TARLEYS (8275397)