Prescribed Management Rule 29 (PMR 29) of the Sectional Title Schemes Management Act deals with the procedure which must be followed when making alterations or improvements to the common property in a sectional title scheme.
In terms of this rule one must first determine whether the alteration or improvement in question is “reasonably necessary” or “not reasonably necessary” as this will determine the procedure that will be applicable. At this point it must be noted that the terms “reasonably necessary” and “not reasonably necessary” have replaced the terms “luxurious” and “non-luxurious” which were used under the Sectional Titles Act, although it is submitted that such terms can be used interchangeably.
What is a “reasonably necessary” improvement?
The term reasonably necessary refers to an improvement that is non-luxurious in nature. As such a reasonably necessary improvement is one that can be regarded as being both essential and desirable (in the sense of being luxurious for some and not for others).
What is a “not reasonably necessary” improvement?
The term “not reasonably necessary” refers to an improvement that is of a luxurious nature. The word “luxurious” is derived from the word “luxury”, the definition of which is:
“(i) a state of great comfort and extravagant living” and/or “(ii) a non-essential item”
Using this definition we can conclude that a “not reasonably necessary” or luxurious improvement is a non-essential item.
What procedures must be followed if a Body Corporate want to undertake one or the other of these improvements?
“Not reasonably necessary” improvement
In order to carry out a “not reasonably necessary” or luxurious alteration or improvement to common property a unanimous resolution of the members of the Body Corporate is required.
“Reasonably necessary” improvement
PMR 29(2) sets out the procedure that must be followed before the Trustees of the Body Corporate can implement a “reasonably necessary” or non-luxurious alteration or improvement to the common property.
In terms of this rule, prior to implementing the alterations or improvements the Body Corporate must first give its members at least 30 days written notice of its intention to make “reasonably necessary” improvements or alterations, which notice must specify:
- The estimated costs associated with the proposed alterations or improvements;
- The details of how the Body Corporate intends to meet such costs; and
- A motivation for the proposal, including drawings of such improvements or alterations depicting their effect and why they are necessary.
If, during the 30 day notice period any member of the Body Corporate requests, in writing, a general meeting to discuss the proposal, then the proposal cannot be implemented unless it is approved by a special resolution adopted a general meeting.
If no such request is received during the notice period then on expiry thereof the Trustees can proceed with the alteration or improvement.
Determining the nature of an improvement or alteration
The question of whether a particular improvement or alteration is “reasonably necessary” or “not reasonably necessary” must be answered with regard being had to the individual scheme in question, the reason being that what is luxurious in one scheme may not be regarded as such in another (regard being had to the profile of the members etc). An example of this is that the installation of a swimming pool in a scheme in an affluent area may be regarded as being “reasonably necessary”, whilst in a less affluent area this may not be the case.
A more topical example of this is whether or not the installation of a generator on common property will be regarded as being a “reasonably necessary” improvement or a “not reasonably necessary” improvement. It is submitted that given the current power crises in our Country the installation of a generator would be regarded as being “reasonably necessary” in the majority of schemes, as this ensures that members continue to receive electricity which not only provides comfort, but also security.
If however the scheme in question already has a generator, or is on a power grid that does not get impacted by loadshedding, then such installation would be “not reasonably necessary”.
In summary, where the trustees of a Body Corporate want to make improvements or alterations to common property the first step will be to determine the nature of such work. The nature thereof will be determined in relation to the particulars of the scheme in question. Once the nature has been determined the trustees must then proceed in accordance with the relevant procedure as set out in PMR 29.
WRITTEN BY DAVID CAMPBELL