So says Andrew Schaefer, the managing director of leading national property management company Trafalgar, who notes that it has become quite common in recent years for big suburban homes to be renovated and sectionalised into “duets”, and for large stands to be developed into “boutique” ST complexes containing a few free-standing homes.
“These are excellent in terms of city densification policies and efficient land usage, and they suit many modern buyers who want convenience, security and affordability rather than large gardens. The problem is that the majority of these developments are being run on a handshake basis, rather than according to ST legislation and the Community Schemes Ombud Service (CSOS) Act.”
He says that although they are legally members of a body corporate (even if there are only two of them), the owners in these schemes usually don’t formulate budgets, collect levies, hold AGMs or establish reserve funds.
“They might agree informally to share certain costs like security and garden maintenance, but mostly they treat their homes as if they were freehold properties.
“And unfortunately, we are encountering an increasing number of cases where these arrangements are not working out at all well - quite apart from the fact that they are illegal and could expose the owners to quite hefty fines or even imprisonment for not paying their CSOS contributions.”
Most of these cases, says Schaefer, involve the construction of home additions or structures such as garages, carports and pools that have not been approved by the other member or members of the body corporate.
“This approval is necessary because anyone buying into an ST scheme is effectively only buying their ‘section’, consisting of the interior of their home. The outsides of the buildings and the rest of the property, including the gardens, driveways and security equipment, are part of the common property owned in undivided shares by all the owners in the scheme.”
Legislation also provides, he says, for the registered ST plan and participation quotas to be amended and approved by the surveyor-general’s office, and for the title deed of the altered unit to be endorsed at the deeds office. “This can be quite a costly process, but if it is not done, it will be difficult for any or either of the owners in the scheme to sell their homes at a later stage - because any prospective buyer’s bank will want to see a copy of the amended ST plan before granting a bond,” says Schaefer.
- Supplied/ PERSONAL FINANCE