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Foundation - Legal advise

By Rika Lamprecht on Wed, 14 Mar 2012 at 13:52

Good afternoon,
I just want to ask a question. I stay in a complex and I am also the Chairperson. About 2 years ago I reported that my foundation has sagged. Nothing was done from a managing agent point of view.
In January this year I got an engineer that was recommended by the managing agent out to have a look and it was confirmed that my foundation has indeed sagged. The quote to underpin my foundation came to about R26000.
The trustees are however limited as per an AGM not to make decisions that exceed the value of R10000, then the body corporate need to get involved and approve it. (I need 75% of the owners to say yes)
I however know that from having discussion with some of the owners about my foundation that they will not approve the repairs. (I doubt if I will get 75% of the owners to vote in favor)
I want to know from a legal point of view if there is anything I can do? What it entails and what the costing will be for my own account?
Kind regards,
Rika

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RE: Foundation - Legal advise

Swazi Coetzee replied on Wed, 14 Mar 2012 at 14:00

The Managing Agent does not have the authority to authorise this type of repairs and maintenance........this is a Trustee resolution not an owners resolution.The Trustees can not be limited for repairs and maintenance and are obliged to do this even if it means raising a special levy/loan.
All this repairs should be for the account of the Body Corporate.Restrictions can not be used to stop Trustees from carrying out any action required of the Body Corporate by the Act but it can direct the Trustees to consult the members about the way in which the funds will be raised.

RE: Foundation - Legal advise

Rika Lamprecht replied on Wed, 14 Mar 2012 at 14:32

Thank you very much. According to the managing agent 75% of the owners need to be in favor before approval will be given.

You stated that the trustees can consult the owners, so they do not need permission from the owners? ...Show More

RE: Foundation - Legal advise

Myburgh Brink replied on Wed, 14 Mar 2012 at 15:13

The BC (i.e. trustees as the elected officials) is responsible for the maintenance /repair of the CP i.t.o. §37 (1) (a) and (j).

Was the R10k limitation restriction placed i.t.o. §39 (1)? What is the source (STA reference) of the 75% you would require for approval?

RE: RE: Foundation - Legal advise

Rika Lamprecht replied on Wed, 14 Mar 2012 at 15:33

Hi,

It was decided at a AGM that the trustees only have authorization to spend to the amount of R10k. ...Show More

RE: RE: RE: Foundation - Legal advise

Mike Power replied on Wed, 14 Mar 2012 at 16:35

Hi Rika, I think the 75% comes from the special resolution to have a non-luxurious improvement. It does not apply here. It is probably fair to say that the repair work is fairly urgent and therefore the Trustees have the power to get the work done. As far as funding is concerned the Trustees have the power to raise a special levy to cover the costs, if insufficint funds are available.

The question I would like to ask Myburgh is if repairs are considered to be urgent and necessary and will cost R26,000, and the owners have a restriction of R10,000 then do the Trustees have to consult the owners in order to get the restriction amended or lifted.

RE: RE: RE: RE: Foundation - Legal advise

Gerhard Bezuidenhout replied on Wed, 14 Mar 2012 at 18:07

Prof Paddock dealt with this type of imposition some time ago: the AGM has the responsibility NOT to pass a resolution which has this catch 22 effect.
However, basically the restriction is binding. Now that it is in existence, the owners MUST be consulted.
One might argue - ignore the restriction and carry on, which might lead to all sorts of opposition from unsettled owners.
Safer way is to call a SGM, have the gurus there (legal and engineering) and advise the opposition to the proposed repair of their limited rights.
Else this owner could declare a dispute and "force" the opposing members to abide by the arbitration.

RE: Foundation - Legal advise

Myburgh Brink replied on Wed, 14 Mar 2012 at 19:37

I have a major issue with restrictions like this being placed on trustees (I have mentioned it a number of times on other posts dealing with this). Why approve the estimates at the AGM and then say you cannot spend the money unless you ask us again – it is just plain stupid. If owners do not trust the trustees with their money, why elect them in the first place.

To get back to the question. In this instance it would appear to be an event not made provision for in the normal estimates – I cannot see how as it apparently stretches over a few years. It looks as if the trustees slipped up! As this is a structural problem which has to be addressed ASAP I would suggest the trustees treat it as an unbudgeted item and raise a special levy which, in my opinion, would fall outside the scope of the restriction and get the job done. Mike, this might be a good question to raise at Staswest's presentation on the 24th....Show More

RE: Foundation - Legal advise

Charles Miller replied on Thu, 15 Mar 2012 at 10:09

Just a comment .Perhaps it should be pointed out to the other owners that if the foundation is holding up a wall the cost of doing the repair would be far greater if it should give way and , keeping in mind that as the trustees have been informed of the situation , insurance will not cover such obvious neglect .Therefore willy nilly all will pay .
Regards.
Charles Miller.

RE: Foundation - Legal advise

Anne Granada replied on Fri, 16 Mar 2012 at 18:49

We have the same problem - the foundations have sagged, and the balcony bricks on the floor has cracked. We believe that as the downstairs owners enlarged their patios and altered the structure of the balconies, they damaged the foundations. Who pays for the damage?
The downstairs owners maliciously caused damage. The ( new and illegal) patios were built on common property , so you can understand that the upstairs owners see the downstairs owners as simply dishonest. The new trustees will have to takea the downstairs owners - who added onto their units - to court -get a court order and off course the legal fees would be paid by the guilty downstairs owners. To add insult to injury, all the downstairs owners were trustees, so they enriched themselves at the expense of the upstairs owners. This is clear instance of breach of fiduciary duty and seld enrichment and in direct conflictbwith King. The new trustees and body corporate will have to decide whether to press charges. However that still leaves the the foundations which have sagged, roof slightly out, rain damage, extensive renovations needed in apartments....

RE: Foundation - Legal advise

Rika Lamprecht replied on Thu, 26 Jul 2012 at 15:22

Good afternoon,

I need a bit more advice regarding my foundation problem. ...Show More

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