How to navigate complex living, and avoid nightmares with the neighbours

Everyone knows a story of someone living in a security complex or estate, who simply can’t manage to live in peace with the other residents, or is having trouble keeping up with a barrage of payments, making complex living sound like an urban nightmare.

Complex living, or community schemes as they are called in legislation, became popular because residents believed they were safer with only one entrance and security at the gate, and also because it was often more affordable than buying or renting a freestanding house.

Community schemes are living arrangements where there is a shared use of and responsibility for land and buildings, such as sectional titles, homeowners’ associations, retirement villages, housing cooperatives, and share block companies.

If you want to live in a complex, you can choose anything from an apartment to expensive estates and retirement villages, but these units all come with a set of rules and a board of trustees that makes decisions that everyone who stays there will not necessarily be happy with.

However, you have rights but to start out with, it helps if you know what to look out for before you sign up for complex living. It is important to consider various aspects into consideration before you sign on the dotted line.

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Check before you sign

The first thing you should check before signing an offer to purchase is whether there is a right of extension in place.

Secondly check whether there is a time limit, because if there is no date or limit to the number of years, this right could be exercised at any time. This refers to a right the developer reserves to himself to develop further units on the common property of the scheme.

This is especially important if you want to live and keep living in a small complex.

It is also important to check exactly what you will own in the estate or complex where you buy. Is that small garden, patio or parking bay really for your exclusive use? Who is responsible for the upkeep of these areas? How much more will your levy be then?

The most important for most people will be to look at the rules of the estate and this is regardless of whether you are buying or renting.

Will you still like to live there if you have to stick to the rules? The rules are part of the title deed and must, therefore, be adhered to, and it can be expensive to challenge them once you signed a contract to live there.

Also look at the right of extension, which relates to the extension of a sectional title scheme by adding parts or areas for exclusive use. The period for this is also important, because if it is not established, this right can be exercised at any time.

You must also make sure what you are going to own where you buy. Is the small garden, patio or parking space for your exclusive use and who is responsible for maintaining it? How will this affect your levy? Figure out exactly how much you’re going to pay each month and per year to make sure it fits into your budget.

While some rules regulate what you can build and what your house should look like, other rules regulate the services as well as the fines for misconduct, breach of the rules or non-payment of levies.

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Monthly levies

Also find out how much the levies are and what they are for. Normal levies usually cover operating expenses and maintenance or repairs, while special levies are for expenses not budgeted for and do not have be approved by all members of the body corporate, although the trustees must pass a resolution for it.

Sectional title owners pay levies in proportion to the size of the unit they own and special levies are calculated in the same way.

Owners can challenge the necessity of a special levy but the body corporate must include a reasonable provision for contingencies and maintenance.

The role of the body corporate

All the owners are part of the body corporate and they have the responsibility to elect trustees who are honest, willing and able to do the work. They must also ensure that a managing agent who has a good reputation is appointed and that the budget is drawn up correctly and accurately with a five and ten-year projected period as well.

A proper debt collection procedure must also be in place to keep arrears to a minimum. Members must ensure that trustees meet regularly and that payments to creditors are managed properly to avoid arrears.

It is important for owners to attend the annual general meeting, because this is the best place to find out where your money is going and raise any concerns that you have.

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The role of trustees in a complex

The trustees have to appoint agents and employees, including a managing agent, ensure they have the necessary funds for the performance of their functions and buy or rent equipment for the maintenance of the property.

They also have to establish and maintain facilities, gardens and lawns on the common property, obtain services by contracting with service providers and invest funds not immediately required.

The trustees are also responsible for letting parts of the common property to owners and occupiers, such as parking bays, gaining access to sections and exclusive use areas for maintenance purposes and delegating duties to individual trustees where necessary.

They must also determine, collect and administer levies, open and maintain a bank account, insure all building improvements, maintain common property, keep minutes, and keep and administer all records, including financial records of all transactions.

The trustees must also keep a record of the current conduct rules, arrange and conduct the annual general meeting and when necessary, special general meetings and prepare documentation presented at the annual general meeting, including the budget and audited financial statements.

It is very important for the trustees to keep proper financial records and they have to record all the money received or spent. Proper financial statements must be prepared and audited by a professional accounting firm and must be signed off by the trustees and auditor.

Trustees can automatically be removed from office when their levies are in arrears for 60 days, when they resign, or are legally declared to be of unsound mind, are sequestrated or convicted of an offence involving dishonesty.

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Who looks after community schemes?

The Community Schemes Ombud Service (CSOS) was established in terms of the Community Scheme Ombud Service Act to regulate the conduct of parties in community schemes and ensure good governance.

Before the establishment of the CSOS there was no regulatory body to deal with complaints and disputes and there was no oversight regarding compliance and governance of community schemes.

The establishment of CSOS was designed to fill this regulatory gap to ensure the promotion of good governance and consumer education.

The CSOS deals with financial, behavioural and governance issues, as well as issues around meetings, management services, private and common areas and other general matters. These include issues such as behavioural issues (a neighbour who plays loud music and failure by the trustees to deal with the complaint), incorrect and unreasonable levies and passing of resolutions at the annual general meetings.

Visit the ombudsman’s office at www.csos.org.za if you want to complain or have more information.