Many owners and occupants of residential sectional titles complexes have been frustrated by the lack of an effective mechanism for resolving disputes. David Warmback in Shepstone & Wylie Attorney’s latest commercial law review comments that the major problem is that the current management rule in sectional schemes, providing for the compulsory arbitration of disputes, fails to provide a practical and cost effective method to avoid and solve problems. “This is a serious stumbling block for the industry given the continued growth of sectional title schemes and the potential for disagreement as a result of the complexity of sectional title living ”, Warmback adds. Hope for a better resolution mechanism has come in the form of the long awaited Community Scheme Ombud Service Bill, published in October where the Minister of Human Settlements has requested comment by interested parties by 30 November 2009. The Bill establishes a dispute resolution service for all "community schemes", including sectional title and share block schemes, home owners associations and housing schemes for retired persons in which there is governance by the community, shared financial responsibility and land and facilities used in common, irrespective of the particular title or tenure arrangements. The memorandum on the objects of the Bill acknowledges that disputes amongst participants require effective resolution in community schemes as they involve control and administration of finances, facilities and behaviour. Furthermore it notes that there is no effective and affordable dispute resolution mechanism available to parties in those schemes. Currently the custody and administration of sectional title governance documentation is the responsibility of the Department of Rural Development and Land Reform, which is principally involved with the land survey and deeds registration functions. The Bill provides that the Community Scheme Ombud Service will take over the governance of schemes which falls outside the mandate of the Department of Rural Development and Land Reform. The Bill proposes to establish the Community Scheme Ombud Service as a national public entity with executive authority vested in the Minister of Human Settlements and provide a framework for the avoidance and resolution of disputes. Warmback says the proposals are a positive step towards recognizing the need for a separate and dedicated entity focused on dispute resolution in community schemes. He notes that the success of the venture will depend largely on the level of training and expertise of employees of the Ombud Service as understanding and dealing with sectional title disputes requires a thorough technical and practical knowledge of sectional title legislation. Article courtesy of SA Realtors on Facebook
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