Several new amendments to the Prescribed Management Rules (as set out as Annexure 8 to the Sectional Title Act) came into effect on 28th October – and these, says Michael Bauer, general manager of the property management company IHFM, will radically change certain traditional practices in sectional title schemes. It is, therefore, he says, important that all sectional title trustees and members become aware of them.
The most important of these amendments, says Bauer, relate to:
- Budget preparation:
The amendment of PMR 36 (1) requires the trustees to prepare the levy budget, prior to the financial year end, and to lay this before the members at the AGM. In the past budgets were usually prepared only a few weeks prior to the AGM (and four months after the financial year end) thereby putting strain on the cash flow of the body corporate.
- Notices for General Meetings:
Another amendment, one which will save time, costs and labour, is a substitution of PMR 39 2 (2) and 54 (1). This allows for the delivery of documents by facsimile or email, provided that the owner consents in writing to this. Annual notice and supporting documents for the AGM may now be issued in a digital format, whereas in the past these had to be issued by prepaid post.
- Special levies:
Trustees and members of sectional title bodies corporate should note the deletion of PMR 31 (4), which dealt with the special contributions (special levies) and gave the trustees the power to raise these on their own decision. These clauses have been amended, and now allow the trustees to raise special levies only with owners’ consent.
- Use restriction:
Another more useful change is the amendment of PMR 68 1 (v), which now provides a use restriction. PMR 68 is an addition of section 44 (1) and deals with owners duties and obligations. This change allows owners to use their sections or exclusive use areas only for the purpose as indicated on the sectional plans of the scheme. For example, if a section is zoned as a garage on a sectional plan, it may not be used for anything else, e.g. a workshop or storage area.
- Arbitration:
This amendment to PMR 71 (4) is a minor, but possibly impractical change. This change basically now requires the Chief Registrar of Deeds to appoint an arbitrator in dispute cases instead of the local or provincial Registrar of Deeds who performed this function previously.
- Proxy rule:
A change to PMR 67 now stipulates that any owner of a unit in a scheme may not hold more than two proxies. This, Bauer believes, will lead to many re-adjournments and practical problems in holding general meetings in the future because without proxy holders it may be difficult to attain the required quorum and if trustees cannot reach a quorum within 30 minutes of a scheduled general meeting (as it is most often the case), they will have to re-convene seven days later.
This, says Bauer, will increase costs as managing agents will charge for appearing a second time. In addition, most proxy forms pass the vote to the chairman if the proxy holder does not attend the meeting – but this is no longer possible. Second meetings are now likely to be seen far more often.
“We understand the thinking behind the new rule,” he said, “but its application will lead to problems.”
The amendments outlined apply to the standard Prescribed Management Rules only. The Sectional Titles Schemes Management Bill and Community Schemes Ombud Services are yet to be promulgated. Bauer says that it is just possible that the new rules may in the end apply only to new sectional title schemes, i.e. those launched after 28th October. However, he says, this matter has still to be confirmed one way or the other and he is not yet in a position to comment on it.
Download the Amended Sectional Title Act and Amended Prescribed Management Rules Download the Amended Sectional Title Act and Amended Prescribed Management Rules here
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Hi Michael,
It has come to our attention that our conduct rules are not registered, and also not aligned with the STA.
We have drafted new rules, and arranged an SGM for discussion of the draft rules for 11 January 2012.
Please advise if your company offers the services of an STA expert who will attend, and chair this meeting for us; and if so, what the cost would be.
Regards
Felix Kroukamp
Can te trustees make a rule and impose a fine for non aderence thereto if the rule was not discussed and passed at a general meeting nor registered in the Deeds Office?
Hi, please help,
I bought into a complex a year ago where several promises were made and and none fulfilled.
I now intend erecting a carport at my unit.
I was given permission by the new body corp but was recently told that I will have to follow procedure and bear the costs of a quantity surveyor and architect and then submit to the deeds office.
What is the correct procedure to put up a carport?
Thanks and regards
Len