Recent amendments to the Sectional Titles Regulations

Recent amendments to the Sectional Titles Regulations, published in the Government Gazette #38923 dated 30 June 2015, include inter alia the insertion of the management rule 4Aa, which reads as follows: 

"(4Aa) After the expiry of a financial year and until they become liable for contributions in respect of the ensuing financial year, owners are liable for contributions in the same amounts and payable in the same installments as were due and payable by them during the expired financial year: Provided that the trustees may, if they consider it necessary and by written notice to the owners, increase the contributions due by the owners by a maximum of 10 per cent excluding capital expenditure to take account of the anticipated increased liabilities of the body corporate. Such increase shall be ratified or changed after the Annual General Meeting by the trustees once the body corporate has approved or amended the schedule of income and expenditure." 
 
This sees the welcome return of the power of the trustees to increase levies by up to 10% on the previous year’s levies, prior to AGM, so as to mitigate the cash flow implications of increases that are effected at the beginning of the financial year (mostly March) but hitherto only accounted for in the levies after the AGM, some four months later. 

Other amendments in the above regulations include that the title deed of any real right registered over land is to now be included within the sectional titles register.  All documents and correspondence, placed in a sectional title file, must now be endorsed with a deeds registry date endorsement upon filing. 

Another amendment in the above regulations sees management rule 7 (Annexure 8 of the Sectional Titles Act) which deals with the nomination of trustees, being amended to restrict any person from being nominated to act as a trustee if he/she is in current breach of rule 64 (i.e. is in arrears with levy contributions and or is in persistent breach of the rules) and, moreover, even restricts any member from nominating a trustee if he/she himself/herself is in breach of rule 64. 

The Community Schemes Ombud Service officially established

The Community Schemes Ombud Service (CSOS) has officially been established, in line with the Community Schemes Ombud Services Act (assented to in June 2011).  

CSOS aims to provide a dispute resolution mechanism for community schemes and to provide training for conciliators and adjudicators; regulate, monitor and control the quality of all sectional titles scheme governance documentation; and take custody of, preserve and provide public access to sectional title scheme governance documentation. 

This Advisory Council will be tasked with making recommendations to and advising the Minister in terms of the provisions of the act and keep the implementation of the Act and the regulations under regular review.  

The Chief Ombud has been appointed and Mr Themba Mthethwa will be assuming this role going forward. 

Due to the fact that the Sectional Title Schemes Management Act (also assented to in 2011) has still not been implemented, at this stage we believe that the CSOS will have to concentrate its energies on disputes in other forms of community living such as home owners associations. 

Intersect expands its footprint in the CBD and Waterfront Marina

Intersect Sectional Title Services has been recently appointed to manage several new contracts, two of which are based in the Cape Town CBD and the Victoria and Alfred Marina. 

The first is a brand new large, multi-use, building called the Mirage, which is situated in the Chiappini/Strand and Hudson Street precinct and incorporates a retail; residential and hotel components. 

Intersect was instrumental in establishing the body corporate for the Mirage and will continue to assist the newly appointed trustees with their day to day duties in the future. 

The 2nd scheme, Ellesmere, consists of luxurious apartments and is situated within the V&A Marina. 

The V&A Marina is made up of 17 individual sectional title schemes and is situated at the entrance to the world famous Cape Town Waterfront precinct and Intersect proudly manages several schemes therein. 
 

Update on the Community Schemes Ombud Services Act

The recent appointment of Mr Themba Mthethwa as the Chief Ombud for the Community Scheme Ombud Service Act (CSOSA) is, hopefully, a sign that the act will finally be implemented soon. 

CSOSA, along with the Sectional Title Schemes Management Act (STSMA), was assented to in June 2011 already but is yet to be implemented. 

CSOSA aims to provide for the establishment of the community schemes Ombud service and a dispute resolution mechanism for community schemes. The Service must develop and provide a dispute resolution service; provide training for conciliators, adjudicators; regulate, monitor and control the quality of all sectional titles scheme governance documentation; and take custody of, preserve and provide public access to sectional title scheme governance documentation. 

The STSMA, on the other hand, will seek to assist bodies corporate to manage and regulate sectional titles schemes, including the application of the rules and to establish a sectional titles schemes management advisory council. 

This Advisory Council will be tasked with making recommendations to and advising the Minister in terms of the provisions of the act and keep the implementation of the Act and the regulations under regular review. 

The Council will consist of no more than seven but no less than five members, of whom one must be the chief Ombud as referred to above; one must be a senior official of the department designated by the Director-General; and the remainder must be persons appointed by the Minister who must have skills, knowledge and experience in the management of a range of types of schemes.

Ensuring due diligence when appointing a managing agent

In the early part of 2013 the Managing Director of Intersect Sectional Title Services, Mr Martin Bester, issued a press release headed "The importance of good financial planning in Sectional Title" and a very recent investigation by the Estate Agency Affairs Board [EAAB] into the misappropriation of body corporate funds has highlighted, once more, the need for trustees to, at the very least, ensure that the managing agent they appoint to administer the affairs of the body corporate or home owners association they represent, has ticked all the boxes in terms of the EAAB's fiscal, administrative and legal requirements. 

Every managing agent dealing with trust funds on behalf of its clients is an estate agent by definition - this is a fact. This means that the managing agency is subject to the same terms and conditions as an estate agency as laid-down by the EAAB and is therefore required to maintain a valid fidelity fund certificate at all times. Moreover the head of company [Principal] and each of the property managers [Agents] must have satisfied the EAAB's requirements ito the qualifications and professional designation exams so as to hold and maintain their individual fidelity fund certificates. 

Failure to ensure that the managing agent appointed to administer the affairs of the body corporate or home owners association is in receipt of same could jeopardise any future claims against the EAAB's fidelity fund, leaving the body corporate or home owners association with a loss. 

Should the trustees be found not to have performed reasonable due diligence at the time of the appointment of the managing agent a gross negligent act or omission [mala fide] could be argued and, if proven, could find the trustees held liable in their personal capacities for the loss or part thereof as the Sectional Titles Act or (usually) the Constitution or Memorandum of Association only indemnifies the trustees as long as they are acting in good faith and that no gross negligence can be proven. 

It is therefore imperative that due diligence is performed prior to the appointment of any managing agent and the very least to request are copies of the fidelity fund certificates of the company; of each of the agents as well as that of the principal. Moreover an explanation of how trust funds are dealt with, preferably in writing, would be strongly advised. Lastly, the trustees must, without exception, insist on (monthly) management accounts and keep an eye on the inflows and outflows of the scheme. 

Intersect Sectional Title Services has been administering sectional title schemes and home owners associations since 1971, and is 100% compliant with the EAAB and every manager in its employ is in possession of a valid, current, fidelity fund certificate. 

An internet search can be done on the EAAB's website for registered and compliant agents and agencies at http://www.eaab.org.za. 
 

Intersect appointed to manage a further property within the V&A Marina

Intersect Sectional Title Services has been appointed to manage a further sectional title scheme within the Victoria and Alfred Marina as of July 2014. 

The scheme, Bannockburn, is made up of 27 luxurious apartments set in, arguably, the most prestigious sectional title complex in the country - The V&A Marina - made up of 17 individual sectional title schemes, each with its own established body corporate.
 
This appointment further cements Intersect's place as a market leader in the property management industry. 

Intersect enjoys continued growth in the Century City precinct

Intersect Sectional Title Services has been appointed to manage a further commercial development within the Century City situated in The Estuaries, Century City. 

Ibis House, a premium-grade office building, has been developed by Horizon Capital, a commercial property investment, asset management and development company, based in Cape Town. 

A 4 Star Green Star rating with the Green Building Council of South Africa (GBCSA) has been targeted in order to significantly reduce operating costs with excellent transport links located in close proximity to The Estuaries that enable employees to use a 'park and ride' system. Other green building initiatives focus on energy and water efficiency, as well as improving the working environment for occupants. 

Ibis House is positioned to become the first certified green office space for small to medium tenants in South Africa and Intersect is proud to be managing the complex from a sectional title perspective. 

Home Owners Associations and VAT

As of the beginning of April 2014 residential home owners associations are being treated the same as sectional title bodies corporate, in the eyes of SARS, with regards to VAT. 

This is according to Martin Bester, Managing Director of Intersect Sectional Title Services, who explains that section 12 (f) (iv) of the VAT Act was recently added which exempts home owners associations from having to register for VAT, regardless of the associations' gross income received from the levies paid its members. 
"Home owners associations (also known as property owners associations) can however voluntarily register as a VAT vendor, specifically if the association is commercial; retail or industrial in nature and where owners can claim input VAT, if they themselves are VAT vendors." 

"This also means that home owners associations which are currently registered for VAT may elect to continue as before, if it is felt that there is a benefit to them. Otherwise it would make sense to de-register as a VAT vendor, but remember that there will be a recoupment of any capital input VAT claimed and this would have to be paid over to SARS before the final deregistration takes place. 

The schemes' auditors would be best placed to offer such advice," says Bester. 
 

Intersect appointed to manage a 2nd property within the V&A Marina

Intersect Sectional Title Services has been appointed to manage a further sectional title scheme within the Victoria and Alfred Marina, arguably the best sectional title address in the country, as of November 2013. 

The scheme, Kylemore, is made up of more than 80 luxurious apartments set over three buildings and is now Intersect’s 2nd appointment within the Marina. 

“We are very pleased to have been appointed to a further scheme within the V&A Marina as this not only confirms the level of service we provide our clients leading to such referrals, but furthermore the Marina is the typical address that Intersect strives to administer.” 

The V&A Marina is made up of 17 individual sectional title schemes and is situated at the entrance to the world famous Cape Town Waterfront precinct. 

When is an independent contractor considered to be an "employee"?

A common practise in sectional title schemes or home owners’ associations is the employment of independent contractors to, for instance, maintain the property or act as estate or building managers, however Intersect Sectional Title Services’ Managing Director, Martin Bester, advises that one must be careful in this regard. 

“Regardless of the contract in place, if any, if an employee/employer relationship can be proven, then the scheme, as the employer, is liable and obliged to register the employee for PAYE, and to deduct contributions accordingly for unemployment insurance, taxation and skills development levy (if applicable)” advises Bester. 

“The differentiation between an employee and an independent contractor is not clearly defined, however, we have learnt that in order to ascertain whether an employee / employer relationship exits, certain tests are conducted” he continued.  “In many circumstances where an individual is employed to carry out regular duties such as those of an estate or building manager the tests prove that an employee/employer relationship does exist” 

The following characteristics are, inter alia, indicative of the employment relationship: 

 An employee is subject to the ongoing control and supervision by the employee.  
 An employee’s remuneration is not dependant on what she or he produces. 
 An employee places his or her productive capacity at the sole disposal of the employee. 
 An employee is usually entitled to certain benefits such as bonuses or thirteenth cheques; sick and leave pay, medical aid and pension benefit. 
 An employee usually works out of the employer's office. 

The above items are merely indicators of the employment relationship.  

Therefore, if you are employing a person in such a capacity then you are advised to ensure that you comply with the regulations.  A labour specialist will be able to assist you in this regard. 

Furthermore, the above also fulfils the employer’s obligations with regard to the Compensation for Occupational Injuries and Diseases Act [COID], which too places the onus of ensuring that the employee is registered and an annual return submitted and paid for on the employer. 

Intersect enjoys continued growth

Intersect Sectional Title Services has increased its footprint in the Southern Suburbs and Hout Bay areas by having been awarded three new contracts.  

According to Martin Bester, the Managing Director of Intersect Sectional Title Services, Intersect has enjoyed continued growth over the 2013 year due to Intersect’s excellent track record and ongoing referrals from its existing clientele. 

Recent schemes include Emeraldene in Wynberg, The Boardwalk in Hout Bay and Deauville in Newlands. 
Each of these are residential in nature, but Intersect also administers commercial, industrial and retail as well as mixed-use developments, and has recently also been awarded the management contract for a light industrial development in Paarden Eiland. 

“We are pleased with the continued growth of Intersect, whilst remaining committed to excellent service delivery“, says Bester, “to this end we have employed qualified and experienced staff to handle every aspect of our clients’ needs.”  “All of our managers have been certified by the Estate Agency Affairs Board, are in possession of valid fidelity fund certificates and have either completed or been exempted from, as a result of their individual qualifications, the prescribed national qualifications and professional designate exams set down for the industry.” 
 

Sectional Title Q & A

Levies: 

Can trustees raise a special levy? 

The answer is yes.  Prescribed Management Rule 31(4B) deals with this as such: 

“The trustees may from time to time, when necessary, make special levies upon the owners or call upon them to make special contributions in respect of all such expenses as are mentioned in rule 31(1) above (which are not included in any estimates made in terms of rule 31(2) above), and such levies and contributions may be made payable in one sum or by such instalments and at such time or times as the trustees shall think fit.” 

Having said that the Trustees should be wary of raising special levies for items already included in the approved budget for the year, as mentioned in PMR 31 (4B), and or for proposed luxurious improvements as this requires a unanimous resolution of the members. 
 
Trustee Meetings: 

How many meetings should trustees hold per annum? 

There is no prescribed answer to this as the Act states that the trustees shall meet as they deem fit.   Some Management rules have been amended though to determine minimum number of meetings, but this is rare.   

Generally, trustees meet once a quarter and such meetings should be concurrent with the financial year of the scheme, however trustees can opt to meet as often or as infrequently as they wish, depending on the demands of the scheme. 
 
AGM’s: 

Can a person hold more than one proxy? 

There is ongoing confusion about this and this confusion is caused by the Sectional Title Schemes Management Act, which I refer to earlier, which is not yet in force.   
Currently a person may hold as many proxies as he or she has been given. 
However, once the above Act comes into force the number of proxies held by any one person will be limited to 2. 
 
Can one vote if in arrears with levies or in breach of the conduct rules? 
 
The answer is no, except in the case where a special or unanimous resolution is required.  The breach should also have been communicated to the owner, in writing, and the owner must be in persistent breach thereof.    

Having said that, the bondholder of the unit in question, if in attendance, may vote on behalf of the owner as a proxy even if in arrears and or breach. 
 
What is the quorum requirement for an ordinary general meeting? 

In a Home Owners Association the quorum is determined by the Constitution.  In Sectional Title, however, it is determined as follows: 

 the number of owners holding at least 50 per cent of the votes, present in person or by proxy or by representative recognised by law and entitled to vote, in schemes where there are ten units or less; 
 the number of owners holding at least 35 per cent of the votes, present in person or by proxy or by representative recognised by law and entitled to vote in the case of schemes with less than 50 but more than 10 units; and
 the number of owners holding at least 20 per cent of the votes present in person or by proxy or by representative recognised by law and entitled to vote, in the case of schemes with 50 or more units. 

It is important to note that that a general meeting called for the passing of a unanimous resolution requires 80% of the members, in value and number, to be present. 
 
New Acts: 

Will our existing Management and Conduct Rules fall away when the Sectional Title Schemes Management Act is operational? 

No, they will continue in force until such time as the prescribed rules are replaced by the Minister, which the new Act entitles him to do. 

Recent amendments to the Sectional Titles Act

On 14 March 2013 amendments to the Sectional Titles Act of 1986 were gazetted and thereby became operational one month later. 

Of particular relevance to owners and occupiers in sectional title schemes are the amendments to Annexure 8 (the Prescribed Management Rules or PMR) of the Act.  The following is a summary of these amendments and the everyday application thereof. 

PMR 7, which deals with the manner in which the trustees of a body corporate are to be elected, was amended so as to exclude nominees who are, at the time, in persistent breach of the Conduct Rules (notwithstanding a written warning to refrain from same); and further to exclude any nominee who is indebted to the body corporate. 

The amendment to PMR 7 applies predominantly to nominees who are also owners or even occupiers within the body corporate as only they could be indebted to the body corporate or in breach of its rules, however, the Act  (viz PMR 5) does not require that a trustee need be either. 

The next amendment sees the insertion of PMR 13 (g).  PMR 13 (a-f) deals with the disqualification of trustees.  PMR 13 (g) now provides further for any trustee indebted to the body corporate for a period in excess of 60 days to be disqualified should he/she fail to settle same within a period of 7 days of being notified to do so. 

Lastly PMR 31 (4A) was replaced by PMR 31 (4B).  PMR 31 (4A) allowed the trustees to, at their discretion, increase the levies charged by up to 10% at the beginning of the financial year.  This generally would form part of the proposed budget and be ratified by determination at the AGM.   

I am not particularly keen on the deletion of PMR 31 (4A), as this allowed the trustees to effectively ensure that the levies for the financial year were in line with the expenses and budget for the applicable year (provided the levy increase required was < 10%), whereas the AGM is typically 3 to 4 months after the beginning of the financial year.  This simply means that should a body corporate require a levy increase within a financial year, the 1st quarter of the financial year is missed and the resultant increase could be greater or it could result in backdated increases which are a particular problem in commercial or VAT registered schemes. 

PMR 31 (4B) on the other hand basically provides for the trustees to make special levies or contributions on the members for expenses or costs, over and above those already provided for in the approved budget, and for same to be payable in whichever manner the trustees deem fit.  So no major changes there then. 
 

Reducing energy consumption- It can be done!

Intersect Sectional Title Services proudly manages the Icon Building on the Foreshore in Cape Town. 

The Icon is a 19 storey building that used to be a high consumer of energy.  So much so that we were concerned and adamant that things had to change.  However, reducing the energy consumption in any building takes a concerted effort by the property owners, managers, tenants and staff, but is a most worthwhile exercise, both from a financial and environmental point of view. 

We started out by tracking the consumption of the building at various stages and over a period of time and compared this to the municipal invoices and meter reading statistics.  This then presented us with a benchmark and allowed us to calculate what we would like to achieve in energy reduction. 

Once we ascertained our goal, we set about identifying the energy intensive apparatus in the building and sought ways to reduce their consumption. 

This led to our replacing in excess of 600 T8 fluorescent light fittings with the smaller and more energy efficient T5 fittings, and converting some 1100 downlighters to LED alternatives. 

The further installation of CO2 sensors in the basement parking levels, thereby reducing the usage of the extraction fans from 24/7 to ‘as required’, resulted in a massive decrease in the energy consumption of the building. 

We were also able to take advantage of Eskom’s rebate policy to recover a great deal of the capital cost of the exercise as well. 

These measures, along with the awareness and assistance from the various role players in the building, have led to significant reductions in both energy consumption and cost.  Further savings are achieved by the installations of timers and sensors thereby utilising apparatus only when required.  These savings are perpetual and, in the face of ever increasing energy costs, are a welcome reprieve for the owners of this building, which we are proud to be associated with and pleased that we could assist in this exercise. 

Financial Management in a Sectional Title Scheme

Recent reports regarding aspects of the financial management of a sectional title schemes by managing agencies have resulted in trustees reviewing the agreements with their managing agents and insurers as well as their fiduciary roles as trustees, and this is by no means a bad thing. 
 
Martin Bester, Managing Director of Intersect Sectional Title Services, as sectional title specialist company based in the Western Cape, who sits on the residential and sectional title committee at SAPOA and is an alternate member of the Sectional Titles Regulations board, offers the following advice: 
 
When considering the appointment of a managing agency, a basic checklist should be ticked off, should the agency not comply with any aspects thereof then the trustees should seriously consider the merits of their appointment, if at all. 
 
Ensuring that the managing agency is in possession of a valid fidelity fund certificate, issued by the Estate Agency Affairs Board (EAAB) is critical.  All managing agents are estate agents by definition and by virtue of the nature of their work, therefore every managing agent must be registered members of the EAAB and, as long as they operate one or more trust accounts, they must contribute to the EAAB’s fidelity fund (based on the interest earned on the trust account balances).  The EAAB’s fidelity fund is there to protect the body corporate against theft and or fraud resulting in a monetary loss of funds held in trust by a managing agency - provided the managing agency is registered with the EAAB and complies with the EAAB’s requirements. 
 
Over and above a valid fidelity fund certificate the managing agency should also be in possession of professional indemnity (PI) cover.  The PI cover protects the managing agency against errors, omissions or wrongful acts that results in a financial loss.  Should the body corporate suffer a loss as a result of the managing agency’s error, omission or wrongful act then the body corporate may have recourse to the managing agency and it would therefore be advisable for the trustees to ascertain and ensure that such cover is in place and that the managing agency is capable of dealing with such claims, bearing in mind that the managing agency has more than one client - any of whom could lodge such a claim. 
 
  
Further cover that would be suggested is for the managing agency to be in possession of its own fidelity guarantee.  This cover is put in place to protect the managing agency against theft or fraud by any of its employees resulting in a financial loss for the managing agency.  The reason a trustee would be advised to insist on this is so that he may be assured that the company has the resources to continue operating and providing the essential services that it does in the event of such a loss. 
 
Whilst on the topic of fidelity guarantees, the body corporate too should have fidelity cover in its own policy to cover the loss of any monies whilst outside of the managing agency’s control, examples of this would be petty cash, cash recoveries and/or monies held by trustees or employees of the body corporate, for whatever reason. 
 
So we now know that if the managing agency is registered with the EAAB and meets the EAAB’s requirement and is in possession of a valid fidelity fund certificate, that the body corporate’s funds, held in trust by the managing agency, is protected by the EAAB’s fidelity fund. 
 
We also know that the managing agency should have their own insurances to cover losses resulting from theft, fraud, errors, omissions and wrongful acts. 
 
Lastly we know that the body corporate too should have its own fidelity cover, albeit perhaps for a minimal amount. 
 
What the trustees should also be cognizant of and ensure is present in the body corporate’s insurance policy is trustees’ indemnity or liability cover.  This is put in place to cover the trustees should the body corporate become legally liable for costs as a result of their [the trustees] wrongful acts, so long as such acts are in good faith and subject to the various exceptions of the insurance policy. 
 
So what else should trustees do or insist upon in order to reduce financial risks, well the trustees should insist on monthly management accounts in order that the cash movement, variance to budget and assets and liabilities can be scrutinized.  Trustees should also approve all payments made by the managing agency on behalf of the body corporate, and this could be done in a number of ways. 
 
 The auditor too plays a role in this process.  The accounts of a body corporate are audited annually by the appointed auditor, providing the scheme is made up of 10 units or more (should the scheme be made up of less than 10 units then an accounting officer may be appointed to prepare the annual financial statements).  The preparation of the accounts for the audit is generally done by the managing agency and the auditor’s responsibility is, inter alia, to test the payments made by the managing agency against the invoices and statements of the creditors and the approvals of the trustees. 

 Therefore the appointment of a managing agency, an insurance broker and of an auditor are all important duties of the body corporate, and homework done in this process will result in a reduction in risk and overall better corporate governance of the body corporate.

Intersect's ongoing growth continues

Intersect Sectional Title Services has enjoyed further growth having recently been appointed to administer schemes in Rondebosch, Tokai, Century City and in the prestigious Waterfront Marina. 

According to Martin Bester, the Managing Director of Intersect Sectional Title Services, Intersect has enjoyed significant growth over the 2012 year, a period in which many businesses are struggling, and this is owed to Intersect’s ongoing excellent track record and referrals from existing clientele, culminating in four new appointments towards the end of the year. 

Recent schemes include the newly build upmarket apartment block, The Rondebosch on Belmont Road, just a stone’s throw away from Intersect’s offices, which consists of 166 apartments. 

Another new development to which Intersect has been appointed is the Park Lane Office development in Century Way, Century City, which is made up of 3 AAA grade sectional title office blocks. 

Intersect has also been appointed to manage the High Grove Home Owners Association in Tokai, made up of high end townhouses and near the new Blue Route Shopping Mall. 

Lastly, in December, Intersect was appointed to manage Helenslee, a prestigious apartment block set in the V&A Marina. 

Continued growth for Intersect in the Sectional Title environment

Intersect Sectional Title Services has been proudly awarded three further management contracts in the past month, spreading from the Southern Suburbs to the Atlantic Seaboard and around to Hout Bay. 

The first being Olive Grove, a new development nearing completion in Grassy Park which will be home to 70 new sectional title apartment owners. "This is another great development by Rawson Developers, and we are proud to be associated with them.” says Martin Bester, Managing Director of Intersect.
 
The second is High Level Court, a sectional title scheme based in High Level Road, Sea Point, boasting terrific views of Signal Hill and surrounds. 

Lastly, we have been appointed to manage Houtkapperspoort Mountain Retreat, a fantastic development off Constantia Nek in Hout Bay.  Houtkapperspoort is set in the most beautiful surroundings and is well known as a 4-star self-catering accommodation establishment.
  
Intersect is the sectional title specialist subsidiary of the Spire Property Group and has just celebrated its 40th year of providing efficient property management services to its clients.  Intersect is registered with the Estate Agency Affairs Board as well as the National Association of Managing Agents and Managing Director, Mr Martin Bester, represents the sectional title industry on the Sectional Title and Residential Committee of SAPOA and he is also an alternate member of the Sectional Title Regulations Board. 
 

Special Report: Intersect Sectional Title Services celebrates 40 years of efficient property management

Intersect Sectional Title Services has been managing property for 40 years, originally registered as Garvin Real Estate and Ovland Real Estate Agencies respectively, Intersect became part of the Spire Property Group, a leader in national property management services, in 1999 and has continued growing from strength to strength. 
 
Intersect manages sectional title schemes and home owners’ associations, both residential and commercial, across the Cape Peninsula. 

Conveniently situated at Tannery Park in Rondebosch, Intersect prides itself in being sectional title specialists, servicing the South Peninsula, Southern Suburbs, CBD, Atlantic Seaboard and Hout Bay areas. 
 
The Intersect team is made up of qualified and experienced property managers and support staff, headed by Managing Director, Martin Bester, who himself has many years of experience and is well respected in the industry.  

Martin is a member of the Residential and Sectional Title Committee of SAPOA and an alternate member of the Sectional Titles Regulations Board, a board that advises the Minister of Human Settlements of sectional title related matters. 

“Our focus is on providing our clients with an efficient service and we place an emphasis on strong financial and administrative systems,” says Bester.  

“One of the things I believe differentiates us from other managing agencies is the company ethos that we apply.  We employ the best staff available, are hands on in our approach and are always ready to provide advice on property management and related matters.” 

“We apply strict corporate governance in our dealings with our clients’ funds, backed up by fidelity cover issued by the Estate Agency Affairs Board.” 

“We also support our clients in matters relating to the repairs and maintenance of their buildings, and our facilities division is on hand to assist trustees and owners alike with issues relating to the common property of the scheme.” 

“But possibly most importantly, apart from our high levels of service, are the down to earth, personal relationships we enjoy with our clients” concluded Bester. 
 

Intersect appoints two new property managers

Intersect Sectional Title Services, the sectional title specialist subsidiary of the Spire Property Group, has recently appointed 2 new property managers. 
 
Martin Bester, the Managing Director of Intersect Sectional Title Services, who sits on the board of the Residential and Sectional Title Committee of SAPOA and is a committee member of the Sectional Title Regulations Board, confirmed that Intersect has recently appointed Clyde October and Dane Moore as property managers as a result of continued growth of the business. 
 
“Having just created an additional property portfolio we needed to staff up.” says Bester. 
 
“We have always placed an emphasis on finding the best people at Intersect, a philosophy which is shared by the Spire Property Group as a whole.” 
 
“In March 2012 we appointed Clyde October, who has Bachelor’s degree in Business Administration and who joins us from another property management company and brings with him several years of sectional title management experience.” says Bester. "Dane Moore joined us in May 2012 directly from the commercial property management sector and is in possession of a Bachelor of Science degree (honours) in property studies and is also a level 1 CFA candidate." 
 
“I am confident that these two recent appointments will further cement our place as leaders in the sectional title management industry.” concluded Bester

The difference between Sectional Title Schemes and Home Owners' Associations

Townhouse developments and complexes have grown considerably more popular in recent years as people increasingly opt for the improved safety and security, as well as the sense of community, that often comes with cluster living. 
 
Martin Bester, the Managing Director of Intersect Sectional Title Services, who sits on the board of the Residential and Sectional Title Committee of SAPOA and is a member of the Sectional Title Regulations Board advises that there are predominantly two different types of cluster developments: sectional title schemes and homeowners associations, and these differ in the way the scheme is run and where the responsibility lies. 
 
“In a home owners’ association, you own the house and the erf it is built upon.  Each unit has its own erf number and each owner is responsible for his/her own rates and taxes, insurance, maintenance, as well as water, sanitation and electricity.” 
 
“Important to note,” says Bester, “is that a home owners’ association which, in the Western Cape is usually registered in terms of the Land Use Ordinance at the City of Cape Town, is usually established to look after the maintenance of the roads, security and communal areas within the complex and a levy is payable by all of the home owners for this upkeep.” 
 
In a home owners’ association, each owner of an individual property is automatically a member of the home owners’ association and the home owners’ association will be responsible for establishing the rules of the development. 
 
According to Bester, when it comes to sectional title property, you own a unit, which comprises the section [which could be a flat or townhouse], and the exclusive use area(s) [which could include parking bays and or gardens, if any] as well as an undivided share in the common property.  
 
“Sectional title therefore is a form of joint ownership in terms of which parts of buildings or complexes can be exclusively owned, in conjunction with shared ownership of other parts of the buildings and the land."
 
“The owners in a sectional title development collectively form a body corporate, which, once established, is responsible for the day to day running of the scheme and the enforcement of the rules, as well to establish a fund to ensure that all bona fide costs are met and that the property is suitably maintained.” 
 
How they are similar: 
Bester advises that home owners associations are similar to sectional title schemes in that each raise levies in order to offset the costs associated with administering and maintaining the common property.  
 
“There is also [limited] control over individual behaviour of the members in each, by way of approved rules.” 
“Both schemes offer a form of communal living, which is attractive to certain people, based on the “lock up and go” and secure lifestyles some offer.” 
 
How they differ:
Bester further advises how the two forms of development are different. 
 
“A Sectional title scheme involves ownership of common property in undivided shares, whereas a home owners’ association does not.  In a home owners’ association, the common property, sometimes referred to as “private or common areas” is usually owned by the association.” 

“Another fundamental difference is that the owner in a home owners’ association is responsible for the repairs and maintenance as well as the house owners’ insurance for his/her own property, whereas in a sectional title scheme the body corporate is responsible for the repairs and maintenance of the common property, which includes the external parts of the buildings, as well as the for insuring the buildings and fixtures contained in the scheme, and finances same by means of the levy raised.” 

“Sectional title can provide for ownership in different levels on one piece of land that forms part of the common property, whereas in a home owners association each separately owned building is on a separate erf.  Also, in sectional title, it is usual to have some parts of the common property made subject to specific rights of exclusive use in favour of particular owners or groups of owners.  This concept is not ordinarily part of a home owners’ association.” 

 “Additionally, the common property, sections and registered exclusive use areas in sectional title schemes are shown on one or more sectional plans, whereas the property in a home owners association is shown on a general plan or separate diagrams.”