How to deal with improvements in sectional title schemes.

Regulation 29 in the Sectional Title Schemes Management Act (STSMA) now provides for clear instructions as to how improvements should be handled in sectional title schemes, and trustees should be aware of whether they will need unanimous, special or majority resolutions to carry out certain upgrades in their scheme, says Michael Bauer, general manager of property management company IHFM.
 
If an improvement is deemed to luxurious, in that it is not absolutely necessary, then Regulation 29 (1) stipulates that a unanimous resolution is required. 
 
Regulation 29 (2) makes provision for the body corporate proposing “to make alterations or improvements to the common property that are reasonably necessary; provided that no such proposal may be implemented until all members are given at least 30 days written notice with details of —

(a)  the estimated costs associated with the proposed alterations or ?improvements;

(b)  details of how the body corporate intends to meet the costs, including details ?of any special contributions or loans by the body corporate that will be required for this purpose; and ?

(c)  a motivation for the proposal including drawings of the proposed alterations ?or improvements showing their effect and a motivation of the need for them; ?

(a)  the estimated costs associated with the proposed alterations or improvements;
(b)  details of how the body corporate intends to meet the costs, including details of any special contributions or loans by the body corporate that will be required for this purpose; and 
(c)  a motivation for the proposal including drawings of the proposed alterations or improvements showing their effect and a motivation of the need for them; 
and if during this notice period any member in writing to the body corporate requests a general meeting to discuss the proposal, the proposal must not be implemented unless it is approved, with or without amendment, by a special resolution adopted at a general meeting.”
 
The regulations are very specific with regard to prepaid meters, whether water, gas or electricity, in that it is stipulated that these installations would be deemed necessary improvements, and that if there is majority of owners in favour of the resolution then they can be installed and the costs are borne by the owners, as stated in 29 (3). 
 
“A body corporate must, if so directed by a majority resolution of members —

(a)  install and maintain separate meters to measure the supply of electricity, water, gas or the supply of any other service to each member's sections and exclusive use areas and to the common property; and 
(b)  recover from members the cost of such supplies to sections and exclusive use areas based on the metered supply. 
 
If prepaid meters are proposed on the common property, then a special resolution is required, as state in 29 (4) “A body corporate may on the authority of a special resolution install separate pre-payment meters on the common property to control the supply of water or electricity to a section or exclusive use area; provided that all members and occupiers of sections must be given at least 60 days’ notice of the proposed resolution with details of all costs associated with the installation of the pre-payment system and its estimated effect on the cost of the services over the next three years.”

Much thought has been given to ensuring that all conditions with regards to luxurious or non-luxurious items have been covered, said Bauer, and trustees are able to download the regulations from the IHFM website, under the FAQ section, to assist them in getting to know these new management rules.