A Property24 reader asks:
A Property24 reader says she has a property on the South Coast but there is no body corporate and financials don't exist, so it's impossible to sell. What to do?I have a property in Marina Beach in KwaZulu-Natal which is a deceased estate and I'm the executrix. There is no body corporate, I get a levy account every month that I pay to an office in Durban with one lady working there, the chairman resigned last year and moved to Cape Town. I'm trying to sell the unit but they have no books or financial records, which is making it very difficult. Do I have any recourse? I want the estate wound up.
How can I force them to produce some sort of a financial statement? Who can I approach, there must be some sort of watch dog controlling Body Corporate? I would appreciate any help you can give me.
Carryn Durham, specialist sectional titles lawyer at Paddocks, advises:
The first thing to note is that if the scheme to which you refer is a sectional title scheme then there will be a body corporate. Section 36(1) of the Sectional Titles Act 95 of 1986 (“the STA”) states that:
“With effect from the date on which any person other than the developer becomes an owner of a unit in a scheme, there shall be deemed to be established for that scheme a body corporate of which the developer and such person are members, and every person who thereafter becomes an owner of a unit shall be a member of that body corporate.”
The problem might be that there is not a board of trustees in place. The body corporate should call for a special general meeting. The owners, with the help of the managing agent, can follow the procedure in Prescribed Management Rule 53 (PMR), which states:
“The trustees may whenever they think fit and shall upon a request in writing made either by owners entitled to 25 per cent of the total of the quotas of all sections or by any mortgagee holding mortgage bonds over not less than 25 per cent in number of the units, convene a special general meeting. If the trustees fail to call a meeting so requested within fourteen days of the request, the owners or mortgagee concerned shall be entitled themselves to call the meeting.”
At this meeting the body corporate must elect a board of trustees. If no one is willing to act as trustee then perhaps the best route is to offer to pay an amount of money to professionals to act as trustees in terms of PMR 10.
If this attempt to organise the body corporate’s financial and management affairs fails then it is possible to have an administrator appointed in terms of section 46 of the STA. This is the best option in the circumstances where a body corporate in general and its trustees in particular, are unwilling or unable to properly manage and administer the scheme in accordance with the Act and the scheme's rules. This should be an option of last resort because the cost is high, as a paid professional will be doing what the volunteer trustees would usually do for free.
In terms of section 46(1) of the STA the body corporate; a local authority; a person in whose favour a Court has given judgment against the body corporate for R500 or more; any owner; or any person who has a registered real right in or over a unit (such as a bondholder) may apply to the High Court for the appointment of an administrator of the body corporate.
The Court may appoint an administrator for either a fixed or an indefinite period and on specified terms and conditions as to remuneration. The body corporate must pay the administrator's remuneration and expenses out of its administrative fund.
The Court, in ruling on any such application, may make an order regarding payment of the costs of the application. The administrator of a body corporate takes over its powers and duties or such of those powers and duties that the Court directs he or she shall have.
Once appointed, an administrator may be removed or replaced by the Court on application by any of the persons who are entitled to apply for his or her appointment. An administrator may also apply for his or her own replacement.
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