What is more, property data company Lightstone puts the total value of sectional title property at around R665bn, so it is increasingly important for the owners of sectional title units, and the banks that hold the mortgages on 58% of them, to understand how sectional title schemes are supposed to be set up and run.
However, there is still widespread misunderstanding of even the basics, starting with the body corporate and how it is established, as well as what its functions and powers are. And this often gives rise to many problems and disputes in sectional title schemes which could quite easily have been avoided.
Quite simply, the body corporate of each sectional title scheme is made up of all the unit owners in that development, and it is legally responsible for the day-to-day and financial management of the scheme.
It is established - automatically - when the first unit transfer from the developer of a sectional title scheme to a new owner is registered, and then it steadily gains more members until the last unit is sold and transferred, at which point the developer or development company ceases to be a member.
However, this is by no means an exhaustive list and in bigger sectional title schemes especially, it would be very impractical for every owner to be involved in day-to-day operations and decisions, so the body corporate will usually elect a smaller group of owners as trustees to act on its behalf.
Sectional title legislation makes provision for this and gives trustees the power to make certain decisions without always having to revert back to the body corporate for a mandate.
And by and large, he says, trustees work very hard on behalf of their fellow-owners and try their best to protect and enhance the value of everyone’s investment. But the fact remains that most are amateurs when it comes to real estate. It is also becoming difficult to comply with all the requirements of the increasingly complex sectional title legislation, so most trustees (and bodies corporate) could really do with the help of a professional managing agent.
Time and again it has been shown that sectional title schemes that employ competent managing agents have fewer problems with levy arrears, for example, and are also cleaner, more secure and better maintained – and this should please even those members of the body corporate who are not interested in serving as trustees themselves.
However, trustees do need to check the credentials and references of managing agents very carefully before making any appointment, and must ensure that their agent is a member of the National Association of Managing Agents with a valid and current Fidelity Fund Certificate.