There is a definite nip in the air, and a distinct feeling that work is the order of the day.
With the public holidays behind us, we are now provided with the opportunity to knuckle down and focus on producing results for our clients; gain new skills, acquire increased knowledge from daily experience, and most of all find purpose in being industrious contributors to the Sectional Title industry.
Hoping that you are all feeling as motivated as we are!
Marina and the Sectional Title team
Group seminars for Directors of Homeowners’ Associations
BBM is providing workshop group seminars for Directors of Homeowners’ Associations. We held our first session on the 20th of April at our Houghton office which was highly successful. The interactive nature of the workshop appealed to the participants, as many of them required information on the New Companies Act to take back to their members.
If you are a Director of an HOA and would like to join a morning session, please contact Lola at email@example.com
If you are a Managing Agent, and you would like to bring a few Directors and brand the morning as a value added service to your clients, feel free to discuss this with us. Contact Belinda on firstname.lastname@example.org
As you can well imagine, we are tasked with trawling through a substantial number of Homeowners’ Association Constitutions and Articles. Have a look at the first three paragraphs of this officious document – left us somewhat speechless!!
- "XYZ Homeowners’ Association is a legal fiction created from the minds of men and has no jurisdiction higher than a living, sentient human being."
- "The Bills of Exchange Act 34 of 1964 as amended by Act 56 of 2000 forms the foundation of commercial law in South Africa and is directly applicable to the way in which XYZ Homeowners' Association conducts business."
(Ahem…completely irrelevant actually)
- "No third party outside of XYZ Homeowners’ Association, such as a debt collector, collections agent, legal representative of a law firm, sales rep or court of law, is required in this matter, and the bank has no right to request or encourage their engagement."
(That's telling the banks and the courts!! Hehehe!)
We know that most HOA documents require tweaking, but this is ridiculous!!
Trust ... not such a credible word in Sectional Title circles
Speaking to our Managing Agent clients on a daily basis gives us a feel for the dynamics at play within the community lifestyle environment. We are undoubtedly at the pinnacle of what may be the most precarious position in which Managing Agents have ever found themselves. With the Tsunami effect of the Constantia (CSTM) debacle still at the forefront of our minds, Managing Agents are faced with a far more hostile, untrusting public… and with good reason you might say. Picture the scene - As Trustees, you unsuspectingly engage the services of one of the largest and seemingly reputable Managing Agents on the West Rand, only to find that there had been a wholesale plundering of your trust monies. So now, you are faced with waiting for a lengthy curatorship process which will ascertain the extent of the damage. Thus far, the trust shortfall from the main CSTM trust account is R18 million. It has come to light that there were various other trust accounts, including 470 trust accounts at FNB. When you receive your depleted funds, you then have to claim the shortfall from the Estate Agency Affairs Board (EAAB). Admittedly then, it is justifiable that the man in the street is going to place increased checks and balances on Managing Agents.
The powers of the Body Corporate fall squarely within the ambit of the Sectional Titles Act, and the Trustees have the right to decide how monies of the scheme should be managed. The question of the central trust account is invariably the “elephant in the room.” The larger Managing Agents operate one central trust account. Directly pursuant to the CSTM findings, the knee jerk reaction by the EAAB was to propose to amend legislation with regard to trust accounts to require that a separate trust account be managed for each individual client. The findings that monies had been moved, mixed and manipulated in the CSTM account to the extent that it was no longer possible to determine which trust creditors’ funds were whose, and whose trust monies were remaining, does lead one to believe that the EAAB was not on the wrong track.
However, after a roadshow conducted by the National Association of Managing Agents, the latter organisation is of the opinion that the requirement for one trust account should be retained, as the most recent inspections of the major agencies by auditors appointed by the EAAB confirmed that substantial monies had been spent on the professional running of the trust accounts, and further claims were unlikely.
Proposals were tabled surrounding a more secure environment as follows:
From a practical point of view, it is important that Trustees keep a close eye on authorization of payments from whichever account a Managing Agent operates. There should never be a time where monies are moving without the knowledge of Trustees.
At a recent function hosted by IHFM, Addsure and Propell, at which Marina was a speaker, Mike Addison from Addsure reminded us of a really significant provision of the Management Rules which should be highlighted: 29(2)(b).
In a nutshell, the rule states that if the members of the Body Corporate, by simple majority, decide to take out a fidelity guarantee, (ie: insurance to cover them in any circumstance where anyone has defrauded them of money eg: owners working in the service of the Body Corporate, Trustees or Managing Agent) then the Trustees have no option but to do so. This from BBM’s perspective, is a highly recommended step to take.
The cost is generally less than R200 per month – well worth it!!
Putting a face to the name ... Paul Connell
We have been hosting interesting personal question sessions at our last three weekly Tuesday morning Sectional Title meetings – so interesting for our BBM teams who phone in from our national branches to get to know their colleagues at the other offices. In any event, Paul Connell, one of our Sectional Title consultants, who has been with BBM for 5 years, illuminated us on his interest in cubist art, and early studies in theology!
Paul adds value to BBM in respect of his practical grasp of Sectional Title, having worked as a Managing Agent and Director of a Management Agency for a number of years. His strength lies in consultations, mediations, and attending delicate meetings to act as a chairman. He is available for evening meetings, and is willing to attend at your complex to consult for an hour with the Trustees – we know how tough it is to all get together at an office during the week.
Call Lola on 011 622 3622 to set up a consultation.
'Lifting' the industry to new heights
From December 2012, the sub regulation 6(7) to the Lift, Escalator and Passenger Conveyer Regulations will become effective. The new sub-regulation applies to any person or legal entity having a permanent lift, escalator or passenger conveyor on his premises or any person who carries out work on lifts, escalators or passenger conveyors.
Just as a refresher on the main regulations:
The new Regulations apply to any person who has a permanent lift, escalator or passenger conveyor on his or her premises or any person who carries out work on lifts, escalators or passenger conveyors.
We highlight hereunder some of the more significant amendments reflected in the new Regulations.
The first amendment relates to the maintenance of lifts, escalators and passenger conveyors.
- Whereas the old Regulations stated that a competent person or a firm employing a competent person has to examine and maintain lifts, escalators or passenger conveyors on a monthly basis or at longer intervals as may be prescribed by the manufacturer, the new Regulations no longer permit a person only registered with the Engineering Council of South Africa to perform maintenance on any lifts.
- Further, in terms of the old Regulations, examinations must be carried out to all the parts prescribed by the relevant manufacturer and the door locks and gates of all lifts must be inspected monthly, whilst the suspension ropes must be examined every six months. The new Regulations prescribe that maintenance and examinations may now only be performed by a competent lift service provider being a person who employs competent lift mechanics or who is a self-employed competent lift mechanic who contracts with the user of lifts, escalators and passenger conveyors for purposes of maintaining and inspecting same.
- Moreover the new Regulations now specify that the lift’s safety gear, over speed governor and buffers must be tested at intervals not exceeding 12 months.
- Sub-regulation 7(6) of the new Regulations now also places an obligation on all lift service providers to immediately inform the provincial director if it is found that any lift, escalator or passenger conveyor is being operated without a valid comprehensive report.
The second amendment pertains to the interval period of inspections and tests to be performed on lifts, escalator and passenger conveyors. This interval period has been shortened from 36 to 24 months. The new Regulations also list additional circumstances where inspections should be carried out, for instance when a failure has occurred or whenever there has been a change in the competent lift service provider. It is further to be noted that these inspections may no longer be conducted by registered persons (i.e. persons registered with the Engineering Council of South Africa) but must be performed by an inspection service provider (i.e. persons who are registered lift inspectors and who have been accredited by the South African National System established by section 3 of the Accreditation for Conformity Assessment, Calibration and good Laboratory Practice Act, 19 of 2006). Sub-regulation 6(6) further requires inspection service providers to keep proper records of all inspections conducted by them.
The final amendment pertains to the list of details provided in Annexure 1 to the new Regulations as referred to in sub-regulation 3(1)(a). Sub-regulation 3(1)(a) states that no person shall install or permit the installation of a new or used lift, escalator or passenger conveyor unless that person has submitted a completed form in the form of Annexure 1 to the relevant provincial director who shall allocate an official number to the lift, escalator or passenger conveyor. Persons who install or permit the installation of a new or used lift, escalator or passenger conveyor must ensure that with effect from the 30th of November 2010, they make use of the new form attached as Annexure 1.
The new Regulations are, overall, more specific as to who may operate, maintain, inspect and test lifts, escalators and passenger conveyors. It is recommended that cognisance be taken of the required qualifications stipulated in the new Regulations, before appointing operators, lift mechanics and lift service providers in order to ensure compliance therewith.
Hot off the Press
Launch of Towerhill Johannesburg Development Agency roof gardens on the 10th of May 2012.
The Johannesburg Development Agency has commenced with the greening of fifteen buildings in the inner city. Tyres are brought onto the roofs of the building to act as containers for vegetables to be grown. This will provide better food security for residents in the impoverished buildings.
From a legal perspective, there would have to be a special resolution for non-luxurious improvements in place in order for such a project to take place.
Marina and Annette Horwitz will be co-ordinating a panel of specialist Sectional Title arbitrators together with the Association of Arbitrators. Once the application forms are ready, same will be sent out, and assessments will be completed by the Association, Marina and Annette during July.
There will be strict compliance standards, with the Sectional Title arbitrators having to be properly qualified. This is a major step in the right direction.