Community Scheme Q&A with TVDM Consultants

By Zerlinda van der Merwe

1. How is a trustee of a body corporate replaced?
 
Should a trustee resign or be removed from office, there will be a vacancy in the number of trustees, as determined by the members at the last annual general meeting. Although a body corporate can have a minimum of two (2) trustees, it is important to maintain a quorum of a majority of the determined number in order to make valid decisions, and exercise and perform the body corporate’s powers and functions. If only one (1) trustee is left, this person can only call a special general meeting to replace trustees to the number determined, or at least, to a quorum. In a similar way, the remaining trustees can replace a trustee/s, by majority trustee resolution. We sometimes call this “co-opting a trustee”. Such trustee/s will have all the authority of the replaced trustee until removed from office, their resignation, death or the next annual general meeting. There are no requirements as to who this person must be, other than qualify to be a trustee, and this person does not need  to be appointed by the members, but it will be good to notify the owners of the appointment.
 
Body corporate members may also remove and re-elect new trustees, during the financial year, to fill the vacant positions at a special general meeting. These trustees are removed, and new trustees are elected by way of ordinary resolution of the members. 
 
2. What are sectional plans?
 
Sectional plans are essentially a “birds-eye view” of the sectional title scheme, including the boundaries of the erf, the common property, sections, registered exclusive use areas, participation quota, servitudes, encroachments and rights of the developer to extend the scheme. You will also be able to see if the scheme has been built in phases, extended, if the developer holds any further right of extension, if sections have been destroyed, consolidated or subdivided, and if exclusive use areas have been added or cancelled. The sectional plans will not show you the interior of sections or the location of pipes, wires, cables, ducts etc. These plans are part of the body corporate’s record, and must be provided to all owners and made available at all general meetings of the scheme. 
 
3. How is interest raised on contributions and other charges?
 
The trustees, by majority trustee resolution, decide on whether or not interest will be raised on arrear payments to the scheme by owners. This resolution must be updated annually when the contribution to be levied is resolved, by the trustees, following the member’s approval of the budget at the annual general meeting. It is possible for the members of the body corporate, at any general meeting, to direct the trustees to raise, or not raise, interest. It must be noted that interest may only be raised in accordance with the National Credit Act 34 of 2005. 
 
4. Must all documents be sent to owners before an AGM?
 
Quick answer, yes. Any document that is going to be “considered” or “voted on” by a member, present in person or represented by proxy, at an annual or special general meeting, must be provided to all owners, who have not waived their right to receive notice, within time before the meeting, and in the correct format. If a document is late or not circulated, it may invalidate a vote taken at a general meeting, unless the trustees can provide evidence that a reasonable attempt had been made to provide proper notice. Rather call the meeting a bit later than circulate the notice without all the relevant documentation. 
 
5. Can trustees in a homeowners’ association make governance documentation?
 
Only if the constitution provides that supporting governance documentation can be made by the trustees, such as estate rules or architectural guidelines. If this authority does not exist in the constitution, then any such supporting governance document can only be made by the members, but again, it depends on the wording of the constitution. 
 
6. How do you amend a constitution without an amendment clause?
 
All owners will need to consent, in writing, to any amendment, which we suggest is the insertion of an amendment clause. It is usual in Common Law Associations that a constitution can be amended by seventy-five percent (75%) of a quorum, which differs depending on the scheme, and the number of members. 
 
7. Can co-owners all vote at annual and special general meetings?
 
When more than one (1) person or entity owns a unit in a body corporate, or erf in an HOA, a joint decision must be made as to how to vote on resolutions, and the person that is tasked with exercising this vote, must be duly authorised by a proxy from, properly completed, and in the correct form. In the case of ownership in the name of a juristic entity, a resolution must be in support of such appointment. 
 
8. What is common property?
 
In a sectional title scheme, common property is everything that is not a section or part of a section. An exclusive use area, rule-based or registered is also part of the common property, including servitudes and the right of the developer to extend the scheme. In an HOA, the common areas are all areas within the HOA that are not the erven owned by individual members.
 
9. What is the median line?
 
In a sectional title scheme, you own your section, up to the median line, which is an invisible mid-point that seperates a section from another section, or from the common property, including windows, doors, windows, walls, floors, ceilings, balustrades etc. Exclusive use areas do not have median lines, but it is possible to note the extent of EUA’s in terms of the rules or on the sectional plans. 
 
10. Do I own that parking bay?
 
It is very important to properly ascertain whether an area is owned by you, or allocated to you, before you claim or deny ownership and/or responsibility thereof. If an area is a section of part of a section, it will be delineated on the sectional plans of the scheme, as well as in the case of a registered exclusive use area, reserved right of the developer or servitude. A lease agreement, if registered, will be at the Registrar of Deeds, if not registered, it will be part of the body corporate’s records, as well as its supporting resolution (special resolution post 7 October 2017), a rule based exclusive use area will be in the management or conduct rules, again supported by the required resolution (unanimous and special) as part of the body corporate’s records.