Sectional title scheme: Duties and responsibilities of body corporate and owners
Many property owners in Namibia choose to buy units in Sectional Title Schemes, or Townhouses as they are more often referred to. The reasons why these schemes are so popular include the high security normally offered and the relative affordability of this property type. The prospective owners, however, do not always understand that they buy into a Scheme which will be managed and controlled by a Body Corporate.
The Sectional Titles Act regulates the relationship between Body Corporates and Owners. Despite the popular belief that the Body Corporate is this special group of owners, who runs the Sectional Title Scheme, in terms of Section 38 of the Act, every single owner of any unit in a sectional title scheme is “…from the date on which that person becomes such an owner, a member of that body corporate.” The Body Corporate is therefore nothing more than a group consisting of all the owners in the Sectional Title Scheme.
In terms of Section 41, the Body Corporate must appoint Trustees who shall then perform and exercise the functions and powers on behalf of the Body Corporate. So, what must the Body Corporate do?
What needs to be done with the funds collected from owners through the payment of levies?
- The Body Corporate shall first and foremost establish a fund by collecting levies from the respective owners of the units.
- The fund established through the collection of levies shall be used for the repair, control, and administration of the common property. (“Common Property” means those portions of the land in the scheme which do not form part of any unit, for example the gardens, parking area etc.) The owners themselves are responsible for the interior repair and maintenance of their respective units, while the Body Corporate is responsible for the maintenance and upkeep of the Common Property.
- The established levy fund must also be used by the Body Corporate for the payment of certain local authority charges like rates and taxes.
- The Body Corporate is furthermore compelled to insure the buildings against fire and such insurance premiums, insuring the buildings at replacement value, must be paid from this levy fund.
While owners in Sectional Schemes may sometimes believe that the compulsory levies are expensive, it needs to be pointed out that the advantage of paying levies mean that individual property owners do not have to deal with certain responsibilities like arranging fire insurance over their property or taking care of the common gardens or maintaining the outside paintwork. These functions are, in terms of the Act, taken care of by paying the monthly levy to the Body Corporate.