Orders Relating To The Acquisition And Disposal Of Property, Common Areas And Exclusive Use Areas

A CRITICAL ANALYSIS OF CERTAIN ASPECTS OF THE COMMUNITY SCHEMES OMBUD SERVICE ACT, NO 9 OF 2011

MONTH 9: SEPTEMBER 2019


Orders Relating To The Acquisition And Disposal Of Property, Common Areas And Exclusive Use Areas


There are many different community schemes and arrangements in South Africa. For many years there was no regulatory body governing these schemes. The Community Schemes Ombud Service Act 9 of 2011 (“CSOSA”) came into operation in October 2016 and many of these schemes now qualify as community schemes under the CSOSA. Subsequently, the CSOSA established a regulatory body established by government to deal with complaints and disputes in community schemes and to oversee compliance and corporate governance in such schemes. 

The CSOS is designed to provide an alternative, impartial, cost-effective and transparent service for the resolution of administrative disputes in community schemes. The term “community scheme” refers to a wide range of shared land use arrangements, including sectional title, share block and retirement schemes, home owners’ associations and housing co-operatives. 

The CSOSA defines a “dispute” as:

“a dispute in regard to the administration of a community scheme between persons who have a material interest in that scheme, of which one of the parties is the association, occupier or owner, acting individually or jointly”.

This means that the CSOS can deal with disputes regarding the administration of a community scheme if the dispute is between persons who each have a material interest in the scheme, such as executive committee members, owners, occupiers, managing agents and bondholders, and one of the parties to the dispute should either be the association or an owner or occupier.

Section 39 of the CSOSA provides for a list of seven types of orders that a CSOS adjudicator can give in terms of a dispute application. Each month, I will consider one of these seven categories of types of orders from a practical point of view to determine which kind of community scheme disputes can be taken to the CSOS for resolution and how an adjudicator can deal with such disputes. It is important to note that the list of orders provided for in the CSOSA is not exhaustive as the chief ombud is entitled to propose any other order.

In community schemes, the owners and the association are liable to pay for repairs and maintenance of different parts of the buildings. The general rule is that the community of owners or the management body is responsible for repairs to the common property, while the individual owners are responsible for repairs required within the walls of their apartments. However, disputes might arise regarding responsibilities pertaining to repairs and maintenance. Last month, I considered various orders relating to maintenance, repairs and works in community schemes. This month, I will consider some of the orders which specifically relates to the acquisition and disposal of property, common areas and exclusive use areas.  


An order giving effect to alteration or improvement proposal that was unreasonably rejected 

It is not uncommon that community schemes are made up with members from different backgrounds, including members with different financial means. Improvements to the common property in a scheme will therefore almost always be controversial as some owners will be able to afford the additional expense while others would not be able to afford it. Some owners who do not expect to derive any benefit from these improvements will oppose them, while others will support them. If a member feels that the association has unreasonably rejected an improvement proposal, he or she may apply to have this decision reversed.

In terms of section 39(6)(d) of the CSOSA, an application may be made for an order declaring that the association’s decision to reject a proposal to make improvements on or alterations to common areas is unreasonable and requiring the association to agree to the proposal; or to ratify the proposal on specified terms. It would be interesting to see which factors the ombud would take into consideration when making a decision pertaining to improvement proposals. I would assume that the decision would mostly be based on the necessity of such improvements.   


An order requiring the association to acquire or dispose of property 

The association is responsible for making decisions regarding the acquisition of property for the use, convenience or safety of the members. It is not always easy to determine which property is necessary for the use, convenience or safety of owners or occupiers. Therefore, the CSOSA makes provision for the trustees or a member to bring an application for an order that gives the association the appropriate direction and authority in this regard. 

In terms of section 39(6)(e) of the CSOSA, an application may be made for an order requiring the association to acquire, within a specified time, specified property or the use, convenience or safety of owners or occupiers; not to acquire specified property; or to dispose of specified property, within a specified time.


An order requiring the association to grant exclusive use that has been unreasonably refused 

Exclusive use areas are parts of the common property destined for the exclusive use by a certain owner or owners. Where a member reasonably requires exclusive use rights over a part of the common property and the association unreasonably refuses to grant such right, the member can bring an application to compel the association to grant such rights, in terms of the scheme’s rules.

In terms of section 39(6)(f) of the CSOSA, an application may be made for an order declaring that an owner or occupier reasonably requires exclusive use rights over a certain part of a common area, that the association has unreasonably refused to grant such rights and requiring the association to give exclusive use rights to the owner or occupier, on terms that may require a payment or periodic payments to the association, over a specified part of a common area.


An order obliging an owner to accept common area obligations

Although the general rule is that the community of owners or the management body is responsible for the common property, while the individual owners are responsible for their private areas, individual members may have certain obligations regarding the common property. Disputes may arise because the association considers it reasonable to require a member to accept obligations in respect of some part of the common property while the member disputes such obligations. In terms of section 39(6)(g) of the CSOSA, an application may be made for an order obliging an owner or occupier to accept obligations in respect of a defined part of a common area.

An example might be exclusive use areas which forms part of the common property, despite being for the exclusive use of a certain owner or owners. In such a case it might be unreasonable to have all the members of the scheme contribute to the expense of such area and therefore the association might want to approach the CSOS for an order directing the specific owner to carry the expenses of such exclusive use area. Such an order could possibly be supplemented by another in terms of section 39(3)(b) of the CSOSA, requiring the association to approve and record a new scheme governance provision setting out the obligation of the owner (and any future owners) pertaining to the maintenance and costs of the exclusive use area. This provision can also be included as a title condition in the title deed of the property.

Keep an eye out for next month’s newsletter as I will consider orders pertaining to general and other issues which do not necessarily fit into any of the previously discussed categories. 
 
DANIËL VAN ZYL

ATTORNEY & CONVEYANCER
LL.B & LL.M  (University of Stellenbosch)

ASSOCIATE AT VAN ZYL KRUGER INC

 

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