Newsletters

1. SPECIAL BUSINESS ITEM: SPECIAL LEVY:

Graham Paddock has written many books and countless articles on Sectional Title law in South Africa and is an acknowledged authority. Here is what he had to say about the proposed Special Levy at Knightsbridge Mansions:

“On the issue of special levies, please bear in mind that the trustees only have the right to determine that these will be raised in circumstances where a necessary and unbudgeted expense arises. In my experience it is very seldom that expenses cannot wait to be included in the budget proposed by trustees to the annual general meeting. In other words many special levies are illegal because they are not truly necessary.

The owners can direct trustees not to raise a special levy without first convening a special general meeting and allowing the owners to give them a direction in this regard. Such a direction would, in terms of section 39(1) of the Act, bind the trustees and they could not reject it. Section 39(1) is seen as providing the owners in a scheme with a substantial amount of power and ultimately, confirming that the trustees are not the ‘masters’ of the body corporate, but that they are obliged to act on the basis of the owners’ instructions…”

Motion to Giving Directions or Imposing of Restrictions on Trustees:

The Trustees cannot raise a special levy or enter into contracts for major renovation projects over R100,000 without first convening a special general meeting and allowing the owners to give them a direction in this regard. Such a direction would, in terms of section 39(1) of the Act, bind the trustees and they could not reject it.

For the proposed Special Levy under Special Business #1 of this year’s AGM notice, such a meeting of all owners will take place 30 days from the date of the AGM, on 24 July, 2013 after all owners have been given complete information regarding the work and priorities proposed within one week after the AGM and allowed to seek additional counsel regarding the work to be done.”

Such a vote does not mean that you are for or against work being to be done on the building. Rather it means that the owners, who are ultimately responsible financially, will determine what work is necessary, the priorities, and how payments will be made and over what period of time. This puts the decision-making process back in the hands of the owners, in a true democratic, open and transparent process.

(For more details see IHFM web site: FAQ Special Resolution)

2. AGENDA ITEM: SECURITY LEVY:

Motion: That the members of the body corporate continue to share the costs equally for the special levy for the professional security system as was passed unanimously at a Special Meeting of all owners previously.

3. AGENDA ITEM: CHANGES IN PQ

There has been a change in the PQ of sections at Knightsbridge which increased some owners’ levies without notice or adequate explanation.

According to the Managing Agent, the Deed’s Office has only two documents: (1) the 1980 document entitled, “Rules for the Control and Management of the Building and Body Corporate, Known as Knightsbridge Mansions No.18/1980 and of the Property on which the Building is Situated”, which most owners received when purchasing their property and (2) the changes to the Unit #1 when it was converted into two garages with an entry way.

Since the square meterage has not changed in the units other than Unit #1, owners have trouble understanding why any of the PQ’s as noted in Annexure A of the document would have changed, since the PQ’s as submitted to the Deeds Office in 1980 as noted above included:

o a signature from the Deed’s Registry in Cape Town,

o an Architect’s Certificate by H. Turok, of Turok Dekker and Duncan,

o a Land Surveyor’s Certificate by Melchlor Frick Ekerman and

o certification by the City Engineer for the City of Cape Town, dated 1-2-1980.

Motion: A detailed explanation of how the change in PQ was determined must be made at the AGM so that the members of the body corporate can vote on whether to change the PQ’s or not. The owners affected must be made to feel that they have been dealt with fairly.

4. AGENDA ITEM: PARKING BAYS AND GARAGE UNIT:

Motion: That the Parking Bays and enclosed garage, noted as “Building #2” continue to be charged on the principle of attributable expenses, which is according to Sectional Title Law, since the owners involved have exclusive use to those areas. According to Sectional Title Experts, even the body corporate cannot change the way the way rents are charged for the exclusive use areas because it is a provision of the Act as stated in Section 37(1)(b).

Discussion: The Trustees have proposed changes in the way rents are charged for parking bays and the garage to be based on comparable rentals in the area. When this was questioned in the past, the body corporate was told by all of the Managing Agents, including Michael Bauer, who is the MD of IHFM, that the reason parking bay rentals were so low was because the charge was based on the “principle of attributable expenses,” rather than comparable rentals. This was because in the 1980 Knightsbridge House Rules document filed at the Deed’s Office noted above in Annexure A, these areas were noted as exclusive use areas: “The Owners having exclusive use to Car Ports 1 to 4…and the enclosed Garage”.

According to Anton Kelly, a Sectional Title Specialist and professor of Sectional Title law, “If there are formal exclusive use rights granted over these areas, either registered rights or rights granted by a scheme rule, the trustees have no choice but to recover only the actual expenses incurred by the body corporate for them. The body corporate can’t change that because it is a provision of the Act as stated in section 37(1)(b).” This section states that the body corporate can only charge an “additional contribution to the fund as is estimated necessary to defray the costs of rates and taxes, insurance and maintenance in respect of any such part or parts.”

5. CONTRACTORS ACCESS TO KNIGHTSBRIDGE

In a Newsletter sent out by the Trustees, the Chairperson, Kim Steenkamp, advised the body corporate and residents of our building of a new policy below:

“I [Kim Steenkamp] supervise security and Rodney and have implemented a new rule for the security that
- they are not allowed to grant access to any workmen without them carrying an approved letter signed by firstly our Managing Agent or in her absence myself or another trustee.
- This approval letter will only be granted if the renovation has been approved by the trustees or if it is a minor repair within an apartment, if Fiona Dimio, [the Managing Agent] has been advised beforehand.”

Can the Trustees or the Managing Agent restrict access to an owner’s unit as was demanded? When he was asked about this, Graham Paddock, author of Sectional Title books and the expert in Sectional Title Law in SA, stated emphatically:

“The chairperson has no right to make rules, only owners can. Can the chairperson, or even the trustees control a person's right to invite a workman to their section, and to use the common property for this purpose? The answer is no, neither the chairman nor even the trustees have this right. Sometimes people forget that they are dealing with people's rights to use and enjoy their exclusive and co-owned property!”

Vote against any restriction of your rights to have anyone you choose to enter your home. There are already security procedures in place to have people sign in with Security and to call you for permission to enter. There are also procedures in the Conduct Rules regarding contractors who work for owners who are doing extensive renovations in their units. But to restrict any workman from entering the building to come into your unit is a violation of your rights of ownership. For example, if you want a person to wallpaper your kitchen, why should you have to gain permission from the Managing Agent or Trustees to have the contractor enter?

In a Newsletter sent out by the Trustees, the Chairperson, Kim Steenkamp, advised the body corporate and residents of our building of a new policy below: