Whether improvements to security constitute a “luxury” or “non-luxury” item, they are definitely an “improvement” to the common property and need the buy-in of all owners of a sectional title scheme. Getting everyone on board, or not, is not as difficult as it appears if trustees follow the procedures laid out in the prescribed rules for ST schemes, says Andrew Schaefer, MD of leading national property management company Trafalgar.
Most residents of sectional title (ST) schemes are likely to agree on the need for good security, but problems can arise when they try to reach consensus on the type of security systems they need.
Cost is, of course, a major consideration, since security provisions are typically the second-highest cost items in sectional title scheme budgets after municipal charges, and some residents will always be opposed to installing anything but the most basic security system, while others believe the price of more sophisticated installation would be money well-spent, says Schaefer.
“Either way,” he says, “this is one decision the trustees cannot make on their own, because having new security equipment installed or existing equipment upgraded would quite clearly constitute an ‘improvement’ to the common property. And while trustees may authorise ‘repairs’ to common property in terms of the Sectional Titles Act, they may not give the go-ahead for any ‘improvements’ without consulting the owners in the scheme.”
Fortunately, he says, they should be able to resolve the issue, with the assistance of the scheme’s managing agents, by following the procedures for implementing both “luxurious” and “non-luxurious” improvements that are set out in the Prescribed Management Rules for ST schemes.
“The Act doesn’t provide much guidance when it comes to deciding whether a proposed improvement is luxurious or non-luxurious but in our experience, cost should not be the only determining factor. For example, most owners would probably agree that a good or better security system is not a luxury at all but a necessity – but might well disagree if they had to consider putting in a swimming pool or building a tennis court, even if these cost less than the security system.”
In any case, Schaefer says, improvements to the common property that the body corporate considers to be ‘luxurious’ require a unanimous resolution of the members, and there are two ways of obtaining this type of resolution. The trustees can choose either to attempt to get the written consent of all the owners, or to convene a meeting of owners, of which at least 30 days’ notice must be given.
“If they decide to call a meeting, at least 80% of the owners in the scheme (by number of sections and by value of participation quotas) will need to be present or represented by a proxy, and everybody will either have to vote in favour or abstain in order for the improvement to be approved.”
Oddly enough, implementation of a non-luxurious improvement is more complicated, he notes. “Trustees who want to recommend such a project are required to write to every member of the body corporate describing the proposed improvement, and giving details of the cost, how it will be paid and the effect it will have (if any) on the levies.
“Having sent this letter, the trustees must then wait 30 days before starting to implement the improvement. However, should they receive a written objection from any owner during that 30-day period, they must convene a general meeting of the body corporate, of which a further 30 days’ notice at least must be given.