select
|

Special resolutions in terms if the STSMA

Now that the new Sectional Title Schemes Management Act has come into force (as of the 7th October 2016), trustees should take note of what aspects of the scheme’s management requires a special resolution by the members, as it does take more planning and organisation to get these passed at the annual general meeting, says Mandi Hanekom, operations manager of sectional title finance company Propell.
 
Certain decisions that trustees were able to take on their own, now requires a special resolution by the members authorising the trustees to take the decision in question.
 
In terms of the STSMA, special resolutions by members are required by the body corporate:
 
Section 4(b): when essential for the proper fulfillment of its duties, purchase, acquire, take transfer, mortgage, sell, hire or let units;
Section 4(e): borrow moneys required by it in the performance of its functions or the exercising of its powers; and
Section 4(h): let a portion of the common property to any owner or occupier by means of a lease other than a lease contemplated in section 5(1)(a)”.
 
Special resolutions are also required prior to the body corporate:
 
Section 2(7)(e): pursuing any claim against the developer
Section 3(1)(i): insuring against other risks in addition to buildings’ insurance (fire cover)
Section 5(1)(f): cancelling an exclusive use right
Section 5(1)(g): executing a servitude or restrictive agreement burdening the common property
Section 5(1)(h): approving the extension of boundaries or floor area of a section
Section 10(2)(b): substituting, adding to, amending or repealing conduct rules
Section 11(2)(a): changing the value of any owner’s vote or liability to pay levies (i.e. deciding that votes and liability will no longer be determined by PQ)
 
Further instances where special resolutions are required are listed in the new Prescribed Management Rules:
 
MR 8(2): approving reward (payment) for trustees who are members
MR 15(4): changing the venue for meetings from the local municipal area where the scheme is situated
MR 23(8): insuring any additional insurable interest the body corporate has in the land and buildings of the scheme, and relating to performance of the body corporate’s functions
MR 28(1): appointing an executive managing agent
MR 28(7): cancelling a managing agent’s agreementon two months’ notice
MR 29(2): approving reasonably necessary alterations or improvements, if an owner requests a general meeting to discuss the matter
MR 29(4): installing separate prepayment meters on the common property to control supply the supply of water or electricity to a section or exclusive use area
 
As one can see, there are many references to special resolutions (17 in all) and for each special resolution 30 days’ written notice has to be given to body corporate members if the special resolution is to be on the agenda at a meeting, said Hanekom. 
 
Notices for meetings where a special resolution will be taken must be hand delivered or sent by registered post to the owners’ sections or chosen addresses. Email does not replace the requirement for notices to be posted or handed to owners.
 
When it comes to voting in favour of a special resolution, at least 75% of the votes, calculated both in value and in number, must support it. This means that at least 75% of all members (“votes in number”) and persons holding at least 75% of the PQ (participation quota) in the scheme (“votes in value”)is required to pass a special resolution.
 
Propell have a step by step guideline document that can be downloaded at http://www.propell.co.za/sectional-title-finance/documentation, which will assist trustees in ensuring that all the STSMA requirements are met with regard to special resolutions, but if there is doubt, trustees are encouraged to seek legal advice or the guidance of a managing agent, said Hanekom. 


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK