Dear Editor
I hope that you can make use of this article.
ARE YOU KEEPING PROPER RECORDS OF YOUR SECTIONAL TITLE SCHEME?
Many Trustees do not understand that it is they who are responsible for making sure that the Body Corporate is run properly. A good managing agent will do almost everything that Trustees need, it is still the Trustees responsibility to make sure that everything that should be done – is done and done properly. One of the important things that a Trustee must do is to ensure that proper books of account are kept together with proper minutes of meetings and a minute book. Account records must be kept for a minimum of 6 years while Minute books must be kept forever or at least until the Body Corporate is closed (for example when all the units are sold and the building is demolished). In practice this means that the Body Corporate is closed in the Deeds office.
|
35. |
(1) |
The trustees shall cause proper books of account and records to be kept so as fairly to explain the transactions and financial position of the body corporate, including- |
|
|
|
|
|
|
|
|
|
(a) |
a record of the assets and liabilities of the body corporate; |
|
|
|
|
|
|
|
|
(b) |
a record of all sums of money received and expended by the body corporate and the matters in respect of which such receipt and expenditure occur; |
|
|
|
|
|
|
|
|
(c) |
a register of owners and of registered mortgagees of units and of all other persons having real rights in such units (insofar as written notice shall have been given to the trustee by such owners, mortgagees or other persons) showing in each case their addresses; and |
|
|
|
|
|
|
|
|
(d) |
individual ledger accounts in respect of each owner. |
|
|
|
|
|
|
|
(2) |
On the application of any owner, registered mortgagee or of the managing agent the trustees shall make all or any of the books of account and records available for inspection by such owner, mortgagee or managing agent. |
|
|
|
|
|
|
|
|
(3) |
The trustees shall cause all books of account and records to be retained for a period of six years after completion of the transactions, acts or operations to which they relate: Provided that minute books shall be retained for so long as the scheme remains registered.
[Subrule (3) substituted by GN R2345 of 5 October 1990.]
|
|
It may not be obvious when this should be done until one thinks about it. From the record keeping, it is important to keep records for this period to allow the Receiver of Revenue the opportunity to explore the books of account if he would like to do so and also to allow a reasonable people to be covered when for anyone wanting to look at how the Body Corporates money has been spent. But why must the Minute books be kept for ever? Actually the reason is very simple – because decisions that have been made years ago could well affect the Body Corporate today. Such things as allocation of storerooms, parking areas etc have to recorded in the minute books. Although most garages, gardens and carports are allocated on the sectional title plans as exclusive use areas this is not always so. Remember early Body Corporates did not have exclusive use areas. Carports and garages where bought together with the sectional title unit, but the users of this parkings were not officially recorded but where to be kept as a record by the Trustees. That situation has not changed unless the Body Corporate has gone to the trouble and expense of having the sectional title plans changes. The fact that these areas were not officially registered does not make the any less official. For example Trustees cannot disregard the fact that these areas were allocated to specific flats when the scheme was first sold probably over 25 years ago. These parkings belong to the flats that they were allocated to then. When the flat or town house is sold these garages or carports go along with them. Only the only of the flat or townhouse can agree to them being reallocated. The owner can sell these parkings but only to another owner within the development – you cannot own the use of one of these parkings if you don’t own a unit! The seller should notify the Trustees that he has sold the parking and ask for the new unit owners to be noted in the register of the Body Corporate. One of the reasons for Exclusive unit now being registered is that the registers was often not kept and could easily get lot. Over a period of time many Trustees thought that these areas were pure common property and began to “allocate” parkings as they thought fit. This is not the correct situation and the original register (often a simple plan or list of parkings) holds force unless a change has been agreed by the owner and noted in the minute books of the time.
Sectional Title is nothing if not interesting.
Mike Spencer
Platinum Global
Bloemfontein
082 881 4711
Return to News Room Head Lines
Return to News Archives Head Lines 
