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Community corporation

A community corporation is created upon deposit of the community plan [Community Titles Act 1996 (SA) ss 10, 71] to administer the scheme's by-laws and manage the common property and any fixtures erected on it [s 75].

The members of the corporation are the owners of community lots [ss 10(2), 74]. Owners of development lots are not members of the corporation unless they also own community lots [ss 10(2), 74].

Lot owners are guarantors of their community corporation's liabilities, which means the corporation's debts are enforceable against each of the lot holders directly [s 77].

A community corporation must have a presiding officer, treasurer and secretary [s 76], and may establish a management committee [s 90(1)] to carry out the functions and perform the duties of the corporation within the limits of the committee’s powers [s 92(1)]. A community corporation may also delegate some of its functions to a person outside the corporation (such as a body corporate manager) to assist in the running of the corporation [s 78A(2)].

The corporation must have a common seal [s 73].

A community corporation must keep a letter box with the name of the corporation clearly shown on it, for postal delivery to the corporation. Where there is no postal delivery to the community parcel, the corporation must keep a post office box. [s 155(4)]

The by-laws are the rules of the corporation. The corporation can make rules which are binding on the corporation, unit owners, tenants and visitors [s 43] about the management and use of common property and the use of community lots [s 34(2)]. The first by-laws of a corporation are those filed when the community plan is deposited with the Lands Titles Registration Office. A corporation can vary the by-laws [s 39].

Powers of the corporation

Some of the powers of the corporation are:

  • to administer, manage and control the common property for the benefit of the owners of the community lots [Community Titles Act 1996 (SA) s 75(1)(a)];
  • to maintain the common property and the property of the corporation in good order and condition [s 75(1)(b)];
  • where practicable, to establish and maintain lawns or gardens on those parts of the common property not required or used for any other purpose [s 75(1)(c)];
  • to enforce the by-laws and the development contracts (if any) [s 75(1)(d)];
  • to enforce an owner’s duty to maintain and repair their lot [s 101];
  • to borrow money or obtain other forms of financial accommodation and, subject to the Act or the regulations, give such security for that purpose as it thinks fit [s 118];
  • to carry out the other functions assigned to it by the Act or conferred on it by the by-laws [s 75(1)(e)].

Contributions

The corporation raises funds by levying contributions against all lot owners, in accordance with an ordinary resolution passed at a general meeting [s 114(1)]. The management committee may not set the contribution amount [s 114(2)]. The amount that each owner contributes to funds is normally calculated according to the 'lot entitlement' set out in the community plan [s 114(3)], See: Key Documents and Terms. A lot entitlement is the portion, or ratio, of the capital value of a lot as against the sum of the capital values of all the lots [s 20]. The corporation may, by unanimous resolution, determine that contributions are paid on some other basis [s 114(3)].

The corporation may, by an ordinary resolution at a general meeting, allow contributions to be paid in instalments [s 114(4)(a)].

If contributions are not paid, they are recoverable as a debt [s 114(8)]; the corporation can sue the lot owner and any subsequent owner (if more than one owner, any or all of them) for the money [s 114(7)].

Interest may be charged by the corporation on contributions or instalments owing, this is done by ordinary resolution [s 114(4)(b)]. The amount of interest charged may not be more than 15% per year, and interest cannot be charged on unpaid interest [Community Titles Regulations 2011 (SA) reg 19].

Management of the Common Property

Common property is managed by the community corporation [Community Titles Act 1996 (SA) s 75], which is required to keep an administrative and a sinking fund [s 116]. A two lot scheme may be exempt from the requirement to keep an administrative and a sinking fund through its by-laws [s 35(1)(d)].

Maintenance and repair of lots - entry to premises

The Act imposes a responsibility on a lot owner to maintain and repair their lot [s 134(1)], unless the corporation’s by-laws have transferred this responsibility to the corporation [s 134(2)]. If the responsibility to maintain and repair lies with lot owners, and a lot owner does not fulfil this responsibility, the corporation may give a lot owner written notice requiring them to carry out specific work by a certain time [s 101(1)(a)].

Similarly, the corporation may require and enforce work on a lot to remedy a breach of the Act or the corporation’s by-laws, even if the breach was by a former lot owner, or a current or former occupier or tenant [s 101(1)(b)(i)].

The corporation can also pre-empt problems and require an owner to do work to remedy a situation that is likely to result in a breach of the Act or the by-laws [s 101(1)(b)(ii)].

If the work is not done in the set time, the corporation may authorise workers to enter the lot to do the work [s 101(2)]. This can only happen after the corporation has given at least two days notice in writing to both the lot owner and the occupier (for example, any tenant) [s 101(3)].

Force cannot be used to enter the lot without an order from the Magistrates Court [s 101(4)], unless an officer of the corporation or a person authorised by the corporation is satisfied that urgent action is necessary to prevent a risk of death, injury or significant damage to property [s 101(4a)]. If urgent action is necessary then the officer or authorised person can, after giving whatever notice (if any) to the lot owner and occupier is considered reasonable in the circumstances, authorise entry to a lot for the performance of work reasonably necessary to deal with the risk. To enter the lot in urgent circumstances, such force as is reasonably necessary may be used.

However, if urgent action is not necessary then the corporation would have to file an application in the Magistrates Court seeking an order to enable entry to be gained.

The individual lot owner is liable to the corporation for the reasonable cost of work done [s 101(5)]. If the need for the work arose because of someone else, for example a tenant or previous owner, the lot owner can recover the cost as a debt from that person [s 101(6)].

Maintenance and repair of service infrastructure - entry to premises

The corporation may need to enter a lot in order to set up, maintain or repair service infrastructure. If so, the corporation must give notice to the owner of the lot to be entered [s 146(1)(a)]. The amount of notice required is whatever is reasonable in the circumstances [s 146(3)]. If the situation is an emergency and there is no time to give notice, then notice need not be given [s 146(2)(a)]. A lot owner may agree that their lot can be entered without notice [s 146(2)(b)].

If a person acting on the corporation’s behalf cannot enter the lot without using force, such force as is reasonable in the circumstances may be used [s 146(4)]. Any damage caused by the use of force must be made good as soon as practicable by the corporation, unless the need for force was the result of an unreasonable act or omission on the part of the owner of the lot that was entered [s 146(5)].

Provision of services

A community corporation may provide, for the benefit of owners and occupiers of the lots in the scheme, any kind of service that relates to the ownership or occupation of the lot [s 143(1); Community Titles Regulations 2011 (SA) reg 26(1)]. A corporation may only provide a service if an owner or occupier has agreed to accept the service [reg 26(2)(a)]. The corporation may charge for the provision of those services [Community Titles Act 1996 (SA) s 143(2)], but the cost of the service must be paid for by the persons who have agreed to accept it and must not be subsidised by the corporation [Community Titles Regulations 2011 (SA) reg 26(2)(b)].

Return of property

A corporation may require anyone in possession of any record, key, or other property of the corporation to return it to an officer of the corporation by a specified time. The person in possession of the property must be given written notice to return the property, and the person it must be given to must be stated in the notice. Failure to comply with such a notice is a offence with a maximum penalty of $2 000 [Community Titles Act 1996 (SA) s 147]

Officers of the corporation

A community corporation must have a presiding officer, a secretary and a treasurer, who are appointed by ordinary resolution [Community Titles Act 1996 (SA) s 76(1)]. Normally, these officers must be lot owners [s 76(2)]. If the scheme has ten or less lots, one person may hold two or more of these positions, and if the scheme has more than ten lots, one person may hold up to two of these positions [s 76(3)].

An officer can be appointed for up to a year, with all positions becoming vacant no later than the next annual general meeting of the corporation [s 76(6)].

If a vacancy arises in any of the positions, the position can either be filled at a general meeting, or, if the corporation has a management committee, the committee may, by ordinary resolution, appoint a lot owner to fill the vacancy [s 92].

A vacancy will arise before the annual general meeting if the officer:

  • resigns in writing to the secretary, or, in the case of the secretary, to the presiding officer [s 76(7)(e)];
  • dies or sells their lot [ss 76(7)(a), (c)];
  • becomes bankrupt or applies to take the benefit of a law for the relief of insolventdebtors [s 76(7)(f)];
  • is convicted of an indictable offence (an offence that may be heard before a jury) or is imprisoned for any offence [s 76(7)(g)].

An officer may be removed by special resolution of the corporation (not the committee) on the grounds of misconduct, or neglect of duty, or incapacity or failure to carry out satisfactorily the duties of the office [ss 76(7)(h), 76(8)].

Liability of officers

Where a provision of the Act authorises or requires an officer of a community corporation to certify as to any matter or thing, the officer incurs no civil or criminal liability in respect of an act or omission in good faith in the exercise of that function. A liability that would, but for this rule, attach to an officer attaches instead to the corporation [s 151A].

Presiding Officer

The presiding officer presides at meetings of the corporation [s 23(1)(a)].

Secretary

The secretary of a community corporation has the following functions [Community Titles Regulations 2011 (SA) reg 26A]:

  • to prepare and distribute minutes of meetings of the corporation and submit a motion for confirmation of the minutes of any meeting of the corporation at the next such meeting;
  • to give, on behalf of the members of the corporation and the management committee, the notices required to be given under the Act;
  • to answer communications addressed to the corporation;
  • to convene meetings of the management committee;
  • to attend to matters of an administrative or secretarial nature in connection with the exercise, by the corporation or the management committee, of its functions.

General meetings and committee meetings can also be convened by members of the corporation and other officers (see Management Committee and General Meetings below).

Treasurer

The treasurer of a community corporation has the following functions [reg 26A]:

  • to notify owners of community lots of any contributions to be raised from them in accordance with the Act;
  • to receive, acknowledge, bank and account for any money paid to the corporation;
  • to keep accounting records and prepare financial statements.
Records

The corporation has a responsibility to maintain proper records, and to keep them in an orderly manner so they can be found easily for the purposes of inspection or copying [Community Titles Regulations 2011 (SA) reg 23(2)].

Register of names

A community corporation must maintain a register of the names of the lot owners, showing the owner's last contact address, telephone number and email address known to the corporation, and the owner's lot entitlement [Community Titles Act 1996 (SA) s 135(1)], and must keep any information in the register for 7 years [Community Titles Regulations 2011 (SA) reg 22]. The by-laws of corporations with only two or three lots may exempt the corporation from the need to maintain a register of names of lot owners [Community Titles Act 1996 (SA) s 35].

Accounting documents, records and statements

The corporation must make keep the following documents for 7 years [Community Titles Regulations 2011 (SA) regs 23(1) and 23(3)(b)]:

  • receipts for the expenditure of money;
  • passbooks, deposit books and all other documents providing evidence of the deposit or investment of money;
  • ADI statements and all other documents providing evidence of dealing with money invested or on deposit.

The corporation must make accounting records of its receipts and expenditure [Community Titles Act 1996 (SA) s 136] and keep the records for seven years [Community Titles Regulations 2011 (SA) reg23(3)(b)]. However, the by-laws of corporations with only two lots may exempt the corporation from the requirement to prepare accounting records [Community Titles Act 1996 (SA) s 35(1)(b)].

A corporation must ensure that a statement of accounts is prepared for each accounting period [s 137], and must keep each statement of accounts for seven years [Community Titles Regulations 2011 (SA) reg 23(3)(c)]. However, the by-laws of corporations with only two lots may exempt the corporation from the requirement to prepare an annual statement of accounts [Community Titles Act 1996 (SA) s 35(1)(b)].

Notices, orders and correspondence

The corporation must make a record of notices and orders served on the corporation and keep the notices and orders for seven years [s 136; Community Titles Regulations 2011 (SA) reg 23].

Notices of meetings of the corporation and its management committee must be kept for seven years [Community Titles Act 1996 (SA) s 136; Community Titles Regulations 2011 (SA) reg 23(3)(f)].

Copies of correspondence received or sent by the corporation must be kept for seven years [Community Titles Act 1996 (SA) s 136; Community Titles Regulations 2011 (SA) reg 23(3)(e)].

Minutes

Minutes of meetings must be kept for 30 years [Community Titles Act 1996 (SA) s 136; Community Titles Regulations 2011 (SA) reg 23(3)].

Access to information

Insurance policies

A lot owner, a mortgagee of a lot, or a prospective owner or mortgagee of a lot may request to see any or all of the insurance policies currently held by the corporation [Community Titles Act 1996 (SA) s 108]. No fee is applicable.

If the applicant wishes to have copies of the current insurance policies under s 139(1)(b), a small fee applies [Community Titles Regulations 2011 (SA) reg 25(1)(b)]. See the Community Titles Regulations 2011 to determine the relevant fee that applies.

The corporation must make the information available within five business days after the request [Community Titles Act 1996 (SA) ss 108, 139]. Failure to do so is an offence with a maximum penalty of $500.

Bank statements

On the request of a lot owner, a corporation that does not have a body corporate manager must provide the lot owner with quarterly bank statements for all accounts maintained by the corporation, and must continue to provide the statements until the person ceases to be an owner or revokes their application [s 139(1a)]. Failure to do so is an offence with a maximum penalty of $500. If a corporation has a manager, application can be made to the manager for quarterly financial statements (see Body corporate managers).

By-laws

The corporation must make available up-to-date copies of the by-laws that owners and occupiers of lots, prospective purchasers of a lot or someone considering entering into any other transaction in relation to a lot may inspect or purchase [s 44(1)].

No fee may be charged for inspection of the by-laws [s 44(2)]. The maximum fee a corporation may charge for buying a copy of the by-laws is set out in the Community Titles Regulations 2011 (SA) Schedule 2 (the fee is $49.25 as of August 2018). Copies of by-laws can be obtained from the Lands Titles Office for $10.60 (fee correct as of August 2018) [Community Titles Regulations 2011 (SA) Schedule 2].

Other information in relation to a lot or the corporation

A lot owner, a mortgagee of a lot, or a prospective owner or mortgagee of a lot (or someone on their behalf) may apply to the corporation for access to the following information or documents [Community Titles Act 1996 (SA) s 139(1)]. The information or documents must be provided within five business days after the request [s 139(1)]. Failure to do so is an offence with a maximum penalty of $500. The corporation may reduce or waive any of the specified fees [Community Titles Regulations 2011 (SA) reg 25(3)].

Information to be provided:

  • particulars of any contribution payable in relation to the lot, including details of any arrears of contribution related to the lot;
  • particulars of the assets and liabilities of the corporation;
  • particulars of any expenditure that the corporation has incurred, or has resolved to incur, and to which the lot owner must contribute, or is likely to be required to contribute.

If the applicant is a lot owner, no fee applies [reg 25(1)(a)(i)]. If the applicant is a mortgagee of a lot, or a prospective owner or mortgagee of a lot, a $25 fee applies [reg 25(1)(a)(ii)].

Copies of documents to be provided:

  • the minutes of general meetings of the corporation and meetings of its management committee for such period, not exceeding two years, specified in the application;
  • the statement of accounts of the corporation last prepared by the corporation.

If the applicant is a lot owner, a $5 fee applies [reg 25(1)(b)(i)]. If the applicant is a mortgagee of a lot, or a prospective owner or mortgagee of a lot, a $25 fee applies [reg 25(1)(b)(ii)].

Documents to be made available for inspection:

  • a copy of the accounting records of the corporation;
  • the minute books of the corporation;
  • a copy of any contract with a manager; and
  • the register of lot owners.

No fee applies to inspecting a copy of the contract with a manager or the register of lot owners.

If the applicant is a lot owner, no fee applies to inspect accounting records or minutes [reg 25(1)(c)(i)]. If the applicant is a mortgagee of a lot, or a prospective owner or mortgagee of a lot, a $5 fee applies per application [reg 25(1)(c)(ii)] in relation to accounting records and minutes.

Community corporation  :  Last Revised: Wed Sep 5th 2018
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