Owners of units in sectional title schemes are sometimes left to their own devices after having taken transfer of their units from the developer as far as commencing with the functions of their body corporate is concerned.
Contrary to common belief the body corporate doesn’t have to be registered in terms of the company laws but is in terms of the Sectional Titles Schemes Management Act 8 of 2011 deemed to have been establishment from the date on which any person other than the developer becomes an owner of a unit in a sectional title scheme . Every person who becomes an owner in the scheme thereafter and the developer will be a member of that body corporate.
A developer is the owner of any section in respect of which the ownership is not held by any other person and is thus the entity who transfers the units or sections to the purchasers.
The developer will only cease to be a member of the body corporate when it no longer has a share in the common property. This is after every section in the scheme has been transferred and the developer has not reserved a right of extension of the scheme. If it has reserved a right of extension it will cease to be have a share in the common property after every section in the subsequent phases have been transferred and it has exercised its right of extension in full.
A member of the body corporate will cease to be a member when he or she ceases to be an owner of a unit in the scheme.
The Sectional Titles Schemes Management Act places various responsibilities on the developer with regard to the functions of the body corporate once it is deemed to have been established. The developer must convene a meeting of the members not more than 60 days after the establishment of the body corporate. At this meeting the developer must furnish the members with copies of the sectional plan, a certificate from the municipality to the effect that all the rates due by the developer up to date of establishing the scheme have been paid, and proof of revenue and expenditure concerning the management of the scheme from the date of the first occupation of any unit until the establishment of the body corporate. The developer must also pay over to the body corporate any residue revenue.
The body corporate must further be designated as the “Body Corporate” and must have the name of the scheme as indicated on the sectional plan and sectional plan number allocated thereto by the deeds office.
FUNCTIONS OF THE BODY CORPORATE
In terms of section 3 of the Sectional Titles Schemes Management Act the body corporate must establish and maintain an administrative fund sufficient to cover the estimated annual operating costs for, inter alia, repair, maintenance, management and administration of the common property, including reasonable provision for future maintenance and repairs, the payment of rates and taxes and other local municipality charges for the supply of electricity, gas, water fuel and sanitary or other services to the building or land, any insurance premiums, and the discharge of any duty of any other obligations of the body corporate.
The BC must also establish and maintain a reserve fund in such amounts as are reasonably sufficient to cover the costs of future maintenance and repair to the common property.
Any contributions levied, other than special contributions, shall be due and payable on passing of a resolution to that effect by the trustees of the body corporate, and may be recovered by the body corporate by an application to an ombud from the persons who were owners of units at the time when such resolution was passed.
A scheme shall also be regulated and managed by means of the rules , which must provide for the regulation, management, administration, use and enjoyment of the sections and the common property (a “section” together with an undivided share the common property constitutes a “unit”). The prescribed management rules appear in annexure 1 to the regulations and the prescribed conduct rules appear in annexure 2 to the regulations under the STSMA.