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May 2011 |
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Welcome to our new look edition of Sectionally Speaking. We trust that you will enjoy the refreshing new style as well as the quicker download times.
As you may know, you are receiving this newsletter as a result of having requested that your name be added to our database. This may have been a direct request (e.g. by email or at a seminar) or via your Body Corporate. Nothwithstanding this fact, in light of the requirements of the newly enacted Consumer Protection Act, we would like to be sure that you are actively and willingly a recipient of our newsletter. Accordingly, we take this opportunity to highlight the "opt out" feature at the bottom of this email. Should you wish to be removed from our mailing list, kindly click on the "opt out" link below.
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In this month's BBM Law News |
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The Managing Agent and Arrear Levies |
The Trustees in a complex have a duty to ensure that every owner is paying their levies timeously. If levies fall into arrears, then it is incumbent upon the Trustees to instruct the Managing Agent to take action. In most instances, there is a clause in the Management contract which automatically gives the Agent the right to instruct Attorneys on behalf of the Body Corporate should an owner ignore a final notice from the Managing Agent. However, the Managing Agent cannot act alone. Trustees are not entitled to simply delegate the collection responsibility to the Agent and Attorneys. Trustees are in fact in charge of the process, and must be reported to directly by the Agent and the Attorney. If a Trustee himself is in arrears with levies, he should not be allowed to serve as a Trustee, and should be asked to tender his resignation in writing.
An interesting development, of which many Trustees are not aware, is that Managing Agents fall under the Debt Collector's Act. So, this means that where an owner is in arrears, and the Managing Agent sends a letter of demand, or hands the owner over to Attorneys, all charges relating to the recovery of the arrears are governed by a tariff set by the Debt Collectors' Council.
Below are the charges that a Managing Agent is allowed to charge (effective from 1 March 2011)
- Ordinary letter - R15.00
- A registered letter - R15.00 (plus registered post cost)
- E-mail - R15.00
- Fax - R15.00
- Phone calls - R15.00
- Acknowledgement of debt - R30.00
- Correspondence received and attended to - R7.00
- Consultation with debtor - R37.00
- On receipt of an instalment in redemption of the debt inclusive of instalments made directly to the client - A fee of 10% of the instalment received subject to a maximum amount of R368. No additional fee shall be charged for any attendance in connection with the receipt or payment of any instalment.
So, gone are the days where the Managing Agent can charge R200 + VAT for handing over matters to Attorneys, and then whatever fee they feel is reasonable. They are, in terms of the law now obliged to keep within the prescribed tariff.
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Congrats to NAMA. |
Recently, the Registrar of Deeds passed Resolution 46, 47, and 62 of 2010 regarding Homeowners' Associations. This resolution sought to exclude the necessity of obtaining a clearance certificate from the HOA, where a unit in the development was being sold as a result of a Sale in Execution. The industry was appalled by this resolution, as the security which an HOA previously had regarding being fully paid for arrear levies owed to it by an owner whose property was foreclosed on, was rendered useless by the Registrar's resolution. Due to urgent representations made by NAMA, the resolutions were suspended with immediate effect on the 15th March 2011.
In the words of the Registrar:
- The National Association of Managing Agents (NAMA), which represents a fairly considerable number of homeowners' associations country-wide, has submitted documentation quantifying the financial impact of Registrars' Conference Resolutions 46, 47 and 62 of 2010 on Homeowners' associations it represents. The said impact is in the region of Eighty Million Rand (R80 000 000.00)
- Homeowners' associations have, for a considerable period of time, solely relied on the conditions registered against title deeds for ensuring collection of monies owed to them. The passing of these resolutions has effectively pulled the carpet under their feet.
- In view of the unforeseen and unintended consequences of these resolutions and the imperative to protect the Branch Deeds Registration from possible and needless litigation, the implementation of Registrars' Conference Resolutions 46, 47 and 62 of 2010 is hereby suspended with immediate effect.
Signed:
CHIEF REGISTRAR OF DEEDS
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This just goes to show how powerful an industry representative can be and a huge THANKS to NAMA for being such a vigilant watchdog!!!
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What's in a name? |
More and more often, we are seeing buildings popping up with the same names. This can cause serious issues, especially if they are in the same area.
Allen West from the Pretoria Deeds Registry has written an article clarifying the current situation. Should you wish to have a copy of this article, please contact Belinda Ruckard on bruckard@bbmlaw.co.za.
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Arbitration success |
| Our Paul Connell has just won an arbitration where water ingress resulted in substantial damage to our client's unit, due to a leaking patio above, which was the exclusive use of the top owner.
The arbitrator concluded, correctly so, that the top owner of the patio was liable to fix his patio, i.e. the source of the leaking water. He went further to say that the top unit owner was also liable for the internal damage caused to our client's unit, due to the fact that he had been fully aware of the problem for a very long period of time and had failed to take any steps to remedy the problem, consequently ensuring that the damage was exacerbated. |
Well, I never!! |
Whilst we stress the importance of every Body Corporate having a set of filed rules and we consult with Trustees on a daily basis in this regard, we sometimes come across some really peculiar rules that provide some light relief.
Some examples of these are:
- Residents may not collect their post in their pyjamas! (So can they collect it without pyjamas?)
- Residents must dress their windows in beige coloured curtains only! (So much for creative interior decorating!)
And our very favorite rule ...
- This is a child free complex and residents who fall pregnant will be asked to leave! (Need we say more?)
Jokes aside, we still deal with many Bodies Corporate which do not have updated, filed conduct rules. This becomes problematic when Trustees or owners rely on these rules to resolve a dispute.
We again remind Trustees and owners to ensure that their conduct rules are up to date in terms of the latest legislation, and filed at the relevant Deeds Office. Our "rules package" is always available to Bodies Corporate, owners and Managing Agents at a one-off fee of R1 800.00 (ex VAT) and includes an initial consultation; drafting / perusal / amending of rules; filing at the Deeds Office and delivery of the stamped rules to your office.
Kindly contact Belinda Ruckard for assistance in this regard on bruckard@bbmlaw.co.za.
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Marina at Propell |
Marina was recently hosted by Propell in Cape Town where a very successful Sectional Title seminar was held.
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