Chairperson, hon members, the vision of Human Settlements 2030 is accelerating the development of sustainable human settlements for all South Africans, based on the provisions of the Constitution. It is about laying a solid legal architecture which gives legislative meaning to guide the delivery of integrated human settlements. It is also about enhancing social justice through the deracialisation of the residential market.
Our mission is four-pronged: Firstly, there is the upgrading of informal settlements, as we know. Secondly, there is the provision of grants for low- cost housing. Thirdly, there is the provision of guarantees to the banks lending in the gap market - the R1 billion announced here by the President as well as the Minister of Finance. Lastly, there is the regulation of activities of the financial institutions with respect to their lending practices.
In our 2009 Budget Vote, we made the following commitment regarding our legislative programme. In order to accelerate the achievement of ideal human settlements for our people, the department is planning to table several pieces of legislation in this Parliament for consideration. A fair amount of work, research, and consultation, and a fair number of site visits and deliberations have since taken place.
Therefore, the objective of today's exercise is to table two Bills in this House for consideration and passing, namely the Sectional Titles Schemes Management Bill and the Community Schemes Ombud Service Bill. We are tabling these Bills simultaneously, hon members, due to the complementary nature of the two pieces, which otherwise could have created an administrative logjam, or what they call in legal parlance a legal lacuna.
It is our expectation that the passing of the two Bills will facilitate the realisation of the broader goal of enhancing social justice through the creation of a cohesive and integrated society. The Bills will also contribute to good governance and improved administration of sectional titles and community schemes.
The objective of these Bills is to enhance legal protection for those who live in community housing schemes such as high-rise flats, inner-city buildings, townhouse complexes or built-up estates - as many of you live in those places. These include properties controlled by entities such as sectional titles schemes, share block companies, homeowners' associations, otherwise known as gated villages, and housing schemes for retired persons. More and more South Africans are beginning to look for shelter in these areas, particularly our young people, many of whom have just left a tertiary institution or are starting their first jobs.
The Bills will also minimise the negative actions of some corporate bodies in these settlements, which may want to ride roughshod over individual members. The Sectional Titles Schemes Management Bill provides for the establishment of body corporates to manage, as well as regulate, common property in sectional titles schemes. For effective and efficient implementation of the legislation, provision is made for the establishment of a Sectional Titles Schemes Management Advisory Council to advise the Minister, that is, me.
The second Bill, the Community Schemes Ombud Service Bill, establishes a Community Schemes Ombud Service as a public entity with executive authority vested with the Minister to resolve disputes emanating from community schemes. There is a booming or ever-increasing proportion of human settlements which are being developed in the form of these community schemes, within which there is governance by the community involved. There is also shared financial responsibility, as well as common land and facility utilisation.
Quite often the cordial relations amongst members of these bodies, as you may know, will deteriorate, giving rise to problems and disputes among participants because they involve control and administration of finances or facilities and behaviour, which require effective resolution. Currently, there is no effective and affordable dispute resolution mechanism available to parties involved in community schemes. The Community Schemes Ombud Service is aimed at addressing this particular weakness.
In his state of the nation address, the President called for us to make 2011 a year of job creation. As more people get jobs, this unlocks housing opportunities for those who are migrating from slums to proper housing, including inner city housing. In line with our new mandate and our goal of deracialising the residential market, Cabinet decided to bring all human settlements-related legislation under one roof, that is, the Department of Human Settlements.
In the same vein, the Cabinet has established an interministerial committee led by the Department of Human Settlements to look into the Estate Agents Act, which is still located in the Department of Trade and Industry where we have additionally, above and beyond residences, industrial as well as commercial space.
Our expanded mandate of human settlements requires a holistic approach to the creation of cohesive and integrated communities. The promotion and development of sectional titles as a tenure option will invariably assist towards the realisation of this goal. The transfer and bond values captured by the Deeds Office highlight the significant role that these sectional titles schemes play in the creation of sustainable human settlements.
The two pieces of legislation before you, members, are located in a market that is huge in monetary terms. For example, in 1999 in this property market the transfer value was around R2,7 billion and the bond value was around R6,2 billion. In 2009, 10 years later, the transfer value rose to R53 billion and the bond value to a phenomenal R1,5 trillion.
Both Bills we are tabling today will assist the Department of Human Settlements in creating cohesive and integrated communities. They will facilitate transformation of the community schemes environment. In particular, the Sectional Titles Schemes Management Bill will have a significant catalytic effect on the property market, job creation and, thus, on the economy at large.
Our challenge is to inject life into the Act to make it effective and functional. There is absolutely no value in leaving the Act and putting it on the shelf. People do not necessarily remember when Parliament passes Acts. What matters is how the passing of an Act will improve their lives. Of course, that will require serious commitment on our part, as the executive, as well as ongoing oversight by the portfolio committee.
Therefore, the passing of these Bills, which are located in Human Settlements 2030, creates a mechanism that provides concrete hope for many South Africans, many of whom will be first-time owners. These are their instruments for the future. I thank you. [Applause.]
Hon Chairperson, hon members, fellow comrades, I would like to express the fact that both Bills have been tagged as section 76 Bills ...
... ngoba le Mithetho iYilwayo kuza kufuneka ukuba iye kuxoxwa luluntu phaya ezantsi, ukuze luqinisekise ukuba iimfuno zalo zithathelwe ingqalelo. [... because these Bills will have to be discussed by the people at grass- roots level in order for them to ensure that their needs are taken into consideration.]
Although the Sectional Titles Schemes Management Bill and the Community Schemes Ombud Service Bill are two separate Bills, they are closely related and are therefore being debated together.
It is worth noting that the bundle of changes to the sectional titles and related Acts, which are being brought about by the Sectional Titles Schemes Management Bill and the Community Schemes Ombud Service Bill, can rightly be referred to as "third generation sectional title laws".
The "first generation" Sectional Titles Act came into operation in 1973. Sectional title development schemes, which provide for separate ownership of properties by different individuals, were considerably revised in the second generation law, that is, the current Sectional Titles Act of 1986, which came into operation in June 1988.
This Act, with its various subsequent amendments, prescribed the management and rules of conduct that apply to sectional titles schemes and laid the framework for the operation of such schemes.
Until now the Department of Rural Development and Land Reform has controlled both the registration of deeds and all the technical aspects of sectional titles, particularly the approval of sectional plans and the registration and transfer of rights in sectional title property. The department's role in the management of sectional titles schemes has, however, been limited to being the custodian of the governance documentation, including management and conduct of scheme members. It has not had the legal authority to add any value to the management of sectional titles schemes.
Whilst sectional title is a form of land title that can be applied to any land use, a substantial majority of sectional title units are used for residential purposes. In terms of the Breaking New Ground policy and comprehensive plan for housing delivery, the Department of Human Settlements' responsibilities were expanded to encompass the entire residential market. The decision was hence taken that the responsibility for the management and governance aspects of sectional title schemes should be transferred from the Department of Rural Development and Land Reform to the Department of Human Settlements.
The aim of the Sectional Titles Schemes Management Bill is to give effect to Cabinet's strategy of bringing all housing-related legislation presently administered by other departments under the roof of the Department of Human Settlements.
The Bill will essentially take over all sections of the Sectional Titles Act that deal with sectional title scheme management, and which have been administered up to now by the Department of Rural Development and Land Reform, thus creating a new Act administered by Human Settlements. The Sectional Titles Act of 1986, as amended, will retain only the clauses that deal with surveys and registration of sectional title plans. The proposed Sectional Titles Schemes Management Act contains all the management provisions currently integrated into the Sectional Titles Act.
With the existing legislative provisions being effectively moved from the Sectional Titles Act to the new Bill, substantial revisions have been made to the management provisions, which have been more logically set out and renumbered through a public participation process. People who buy into sectional titles schemes must now know the management aspects of sectional titles legislation in order to protect their vested interests as owners. I want to repeat this: in order to protect their vested interest as owners, as well as occupiers, of sectional title property. They will now be able to find all this information in one statute which exists only for that purpose, making things easier for those buying into these schemes.
The Sectional Titles Schemes Management Bill proposes a provision for the establishment of body corporates to manage and regulate sections and common property in sectional titles schemes and, for that purpose, to apply rules applicable to such schemes, as well as to establish a Sectional Titles Schemes Management Advisory Council, and to provide for matters connected therewith.
Information on sectional titles has historically not been sufficiently accessible to the general public. It is necessary to change this since sectional titles will become one of the dominant systems in operation when high-density residential areas become more prevalent in urban areas.
The fundamental motivation was to make sectional titles a more practical, useful and inclusive system. Property developers, land surveyors, conveyancers, the Deeds Office, bankers and town planners normally deal with the technical complexities of sectional title transactions. The Bill makes sectional titles a more practical, useful, inclusive and understandable system. In addition it deals with the actual operation of sectional titles.
Chairperson, the word "title" is a legal term that, among others, refers to a formal document that serves as evidence of ownership. Sectional title involves personal ownership, as well as collective ownership, of property. With this go a bundle of rights and responsibilities. The sectional title deed stipulates which parts of joint property are personally owned and which parts are collectively owned. As sectional owners, people have accountability towards others to share in the costs with regard to common property and also to maintain their personal property.
In regard to the Community Schemes Ombud Service Bill, the vast majority of new South African housing coming onto the market is in the form of one or other type of community scheme. Community schemes are becoming increasingly popular for groups of owners of conventional properties. They band together, either as a homeowners' association or as a residential improvement district, in order to ensure delivery of the services that are necessary to maintain their property values.
Most new housing developments are now happening in community schemes, involving governance by that community, shared financial responsibility, and the common use of land and other facilities. The model includes sectional title schemes and share block companies, etc.
The increasing need for government to provide some form of support to persons who own residences in community schemes, particularly in the area of dispute resolution, has become evident. Because they involve governance and the administration of finances, facilities and behaviour, community schemes can and do give rise to problems and disputes amongst participants, which need to be effectively resolved. Currently ...
... njengokuba uMphathiswa sele etshilo ukuba asinalo iyeza lokuwunyanga loo mhlola. [... as the Minister has already mentioned, we do not have a solution to that problem.]
The Community Schemes Ombud Service Bill will address this need. The ombud service will be established as a national public entity ...
... hayi, sele etshilo ke uMphathiswa, asoze ndiliphinde. [... and I will not repeat that, as it has already been mentioned by the Minister.]
All community schemes must and do incorporate certain rules. Currently, owners face limited and ineffective options when trying to resolve complaints or disputes relating to community scheme properties. These options include private arbitration or, provided the other party to the dispute agrees, taking the dispute to the High Court. Both options are expensive and time-consuming, particularly the High Court option which involves a lengthy process.
The ombud's office is expected to provide a solution to the current situation by providing a host of essential services to sectional title governance and all community schemes.
This proposed statute will create an independent body tasked with facilitating and arranging efficient and cost-effective dispute resolution, which arises in all community schemes. This will cover all those with shared management and financial responsibility.
The reason for setting up an ombud is to establish a simple and inexpensive recourse that will ensure independence, fairness and impartiality, and promote uniformity and consistency in the handling of disputes. It will also provide a remedy to protect the right to good governance and administration. The ombud deals with complaints and resolves disputes by appointing full- time conciliators, and full-time and part-time adjudicators to impartially handle investigations, hold hearings and make determinations. The adjudicators' decisions can be appealed at the Court of Appeal or High Court, but only if the appeal is based on a legal issue.
The ombud's service will monitor the governance of community property schemes. The schemes may have to report to the ombud on issues, such as conducting annual general meetings and having sufficient insurance cover in place. In addition to its primary objective of arranging for the resolution of community scheme disputes, the service will provide basic training for those who live in and manage community schemes. In line with similar initiatives in Queensland, Australia, and Canada, it is envisaged that the service will create and make available primary training material. This will prevent disputes which arise due to a lack of understanding of the fundamental principles which apply in each form of community scheme.
The intention is that the ombud service should be implemented in such a way that local communities throughout the country will be able to access it. At the same time, unnecessary bureaucracy must be avoided and the infrastructure of the service be kept as compact as possible.
As mentioned earlier, the Community Schemes Ombud Service Bill is linked to the Sectional Titles Schemes Management Bill, as most housing developments are now happening in community schemes which include sectional title schemes. These two Bills therefore complement each other.
The question can then quite rightly be asked why the Sectional Titles Schemes Management Bill needs to be separated from the Community Schemes Ombud Service Bill. The answer lies in the fact that the two Bills exist for fundamentally different purposes. The Sectional Titles Schemes Management Bill regulates the management and governance of a particular type, whereas the Community Schemes Ombud Service Bill seeks to ensure a cost-effective dispute resolution mechanism.
Somlomo, oyena ndoqo kuqulunkqo lwale Mithetho okokuqala, kukuqinisekisa ulawulo oluluqilima kwezi ntlaka zilandelayo: iitayitile, kunye nezikimu zoluntu, kuqukwa nezo zendawo ezihlala abantu abasele besidla umhlalaphantsi njalo njalo. Okwesibini, kukuqinisekisa kokusonjululwa kwembambano phakathi kwala maqela angasentla, nokuthi abantu bangangeni ezindlekweni ezinkulu nokuqinisekisa ukuba yonke loo nto ayithathi xeshalide. (Translation of isiXhosa paragraph follows.)
[Chairperson, of the utmost importance in the drafting of these Bills is to strengthen governance in the following two inseparable components: the titles and the community schemes, including the retirement homes and so forth. Secondly, this is to ensure that conflicts among the above-mentioned stakeholders are resolved and that people do not find themselves in extreme debt and also that all that doesn't drag on for a long time.]
Chairperson, allow me to express my sincere appreciation and thanks to all participants in the processing of the Bills, and this includes members of the portfolio committees from all political parties ...
... nePalamente ethe yasincedisa kakhulu, yasinika nexesha lokuba sikwazi ukuya kufunda e-Queensland ngokwenziwa kwalo Mthetho, nabasebenzi, kunye neSebe elikhokwela nguMphathiswa uTokyo ... (Translation of isiXhosa paragraph follows.)
[... and Parliament that assisted us tremendously by affording us an opportunity to learn more about the drafting of this Bill in Queensland; the staff, as well as the department under the leadership of Minister Tokyo ...]
... and the Department of International Relations and Co-operation, as well as the South African Embassy. Both Bills were adopted by the committee and the House is requested to support the adoption of the Bills. The ANC supports the Bills. I thank you. [Applause.]
Hon Chairperson and hon members, the main aim of the first Bill before us today is to give effect to a Cabinet decision to bring all housing-related legislation currently administered by other departments under the administration of the Department of Human Settlements.
Until such time as this Bill becomes law, the Department of Rural Development and Land Reform is responsible for the administration of the Sectional Titles Act of 1986. This Act, which has recently been amended, deals with the survey, the registration, and the management and administration of sectional title schemes. However, its mandate does not extend to dealing with complaints from the public or with problems arising from scheme governance.
The purpose therefore of the Sectional Titles Schemes Management Bill is to remove the scheme governance provisions currently contained in the Sectional Titles Act and to incorporate these provisions into the proposed new Bill, as well as to set the platform for dealing with complaints from owners of sectional title schemes, amongst others.
The Sectional Titles Schemes Management Bill will also provide for the establishment of body corporates to manage and regulate sections and common property in sectional title schemes and, for that purpose, regulate rules applicable to such schemes; establish a Sectional Titles Schemes Management Advisory Council, as the Minister pointed out - whether he is going to take their advice or not is a matter about which we will have to wait and see and provide for matters connected therewith.
To my knowledge, the amendments to remove the sections dealing with scheme governance provisions now contained in this Bill have been removed from the Sectional Titles Act by amendments to that Act by the Portfolio Committee on Rural Development and Land Reform.
The Portfolio Committee on Human Settlements has been deliberating extensively on this Bill since early October 2010. We asked for copies of all submissions made to the department prior to its tabling the Bill in Parliament, and held public hearings. Unfortunately, the public hearings were not well attended and no submissions of any major significance were made.
Many amendments and additions were made by the committee, however, which I believe improve the draft Bill tabled by the department. These are particularly as regards the relationship between the body corporate and individual owners, and the provision of protection to individual owners against the actions of body corporates, which often act without obtaining the written consent of owners or unanimous resolution. This is now defined in the new Bill. The Portfolio Committee on Human Settlements at all times obtained consensus on additions and/or amendments - although at one stage there was a threat that the committee wanted me to recuse myself, because I happen to be the owner of a sectional title. [Laughter.]
Three important additions that we made are the following: Firstly, as I said, the Bill makes provision for an advisory council to be established to review the regulations to be prescribed under this Act and the implementation thereof, and to make recommendations to the Minister with regard to these. Needless to say, the committee has put into the Bill that those regulations should come before the committee before they are approved.
Secondly, there is the provision for body corporates - this is an important one - to make provision for a maintenance budget in addition to their operating budgets. A common complaint was that no provision is made for long-term maintenance, which necessitates raising special levies for expensive remedial matters that arise, which often places an unfair financial burden on homeowners in the complex concerned.
Thirdly, there is the establishment and provision of a dispute resolution mechanism. However, this is contained in a separate Bill entitled the Community Schemes Ombud Service Bill. The portfolio committee did entertain the idea of merging the two Bills into one, because the Community Schemes Ombud Service Bill is really an extension of the Sectional Titles Schemes Management Bill. However, whilst the Sectional Titles Schemes Management Bill deals only with sectional title schemes, it is envisaged that the Community Schemes Ombud Service Bill will deal with any scheme or arrangement in terms of which there is shared use of and responsibility for parts of buildings.
Hon Chairperson, because of the overlap between the two Bills and the impact of the one upon the other, both Bills had to be considered in parallel by the committee and hence, I presume, the fact that we are debating the Bills together today.
Agb Huisvoorsitter, weens die feit dat ons gemeenskappe oor die algemeen nie veilig voel in ons woonbuurte nie en omdat konvensionele vrystaande huise nie net skaars is nie, maar ook geneig is om duurder te wees, is daar al hoe meer huiseienaars wat na deeltitel kyk as dit by behuising kom. (Translation of Afrikaans paragraph follows.)
[Hon House Chairperson, because of the fact that, in general, our communities do not feel safe in our residential areas and, because conventional free-standing houses are not just scarce but also tend to be more expensive, more and more homeowners are considering sectional title when it comes to housing.]
It is therefore important that a fair regulatory system is in place and, more importantly, that a dispute mechanism exists. These two Bills address both these issues. The DA supports the Bill. Thank you. [Applause.]
Hon Chairperson, the most significant aspect of the Sectional Titles Schemes Management Bill is contained in clause 18. The establishment of a Sectional Titles Schemes Management Advisory Council, which the Minister referred to earlier on, is a progressive move. It will allow for the proper, full-scale implementation of this Act and also allow for the regulations to be kept under regular review.
The idea of a regular review of regulations is highly desirable. It will allow for sectional titles schemes in South Africa to operate with better governance, and greater transparency and accountability. The process of constant renewal is indeed very appealing and its promise must be translated into reality.
It is also worth noting that the Bill demands that the advisory council must make recommendations to the Minister with regard to any amendment thereof or other action which may be advisable. I am happy to note the emphasis on the word "must". This creates a direct obligation for the advisory council to produce recommendations so that the Minister can continue to refine the Bill, until it covers all eventualities. One day a comprehensive Bill that will allow for the better running of sectional title schemes will arise.
To fulfil this expectation it is imperative that the advisory council makes known its existence to all sectional title holders as soon as possible, and it must also invite and receive inputs for analysis and comment. The creation of an interactive website will be an absolute necessity for the proper functioning of the advisory council. We request that the Minister and the department facilitate this without delay.
Hon Speaker, I now wish to turn my attention to the second Bill, the Community Schemes Ombud Service Bill. Boards and their functioning have become contested terrains in South Africa. This is because they have been politicised. We appeal to the Minister to ensure that he goes strictly by the provision of clause 7(4), so that he appoints people with the requisite skills, experience and availability to properly fulfil their functions. This Bill has great promise provided that the right people are appointed.
The Bill provides for how fiduciary duty should be undertaken and for disclosures to be made. This must be stringently monitored by the department. We implicitly believe that a declaration has to be signed to the effect that each person required by the Bill to make a disclosure has, in fact, made a full disclosure with no material information excluded. The Minister must ensure that this happens.
In respect of clause 18(d), the Minister should ensure that the development of efficient, transparent and cost-effective administrative systems is examined point by point against the Public Finance Management Act, PFMA.
Under clause 42(d) we urge the Minister to consider making regulations which will allow for independent arbitration and the use of the small claims court to occur where the ombud believes that the matter is outside his or her jurisdiction. If any application is rejected because of a legal lacuna, it should be obligatory upon the ombud to bring the matter immediately to the attention of the Minister, so that administrative procedures may be used to deal with the problem. Finally, clause 22 makes provision for levies to be collected from community schemes. This will require proper prior consultation with representatives of schemes, as this will be seen as a new form of tax. Those who pay will need to have the right to representation. As the Minister knows very well, taxation without representation is tyranny. Cope believes that this matter of the levy must be communicated to all affected parties so that a round table discussion can occur. The imposition of levies must not be done unilaterally or prematurely.
This Bill will bring relief to many people who have governance issues with their governing bodies. The issues that are being raised should be communicated to all the body corporates via email so that they stay in the loop and can take appropriate remedial action. The ombud should work proactively and not only reactively. He or she should educate as much as he or she should adjudicate. We strongly believe that problems should be arrested before they occur. This should be the modus operandi of the ombud. Moreover, this will be a whole lot cheaper.
Lastly, Chairperson, I would like to congratulate our committee chairperson on the handling of the discussions in the committee on these two Bills, particularly the first one. She did it in such a way that what appeared to be a difficult task was, in fact, carried out smoothly by the whole committee. There were no disputes of any kind. Cope supports both Bills. I thank you. [Applause.]
Chairperson, the Sectional Titles Schemes Management Bill takes us a step closer to an integrated management approach, which should expedite the procedural compliance thereof.
That being said, the IFP is concerned about the impact of the power afforded to the Minister to appoint members to the proposed Sectional Titles Schemes Management Advisory Council. In these powers lurks the danger of making appointments that are politically motivated, and subsequently compromising the interests of the schemes that the Bill seeks to protect.
The omission in the Bill of the amendment of key definitions is potentially a further area of concern. Definitions such as "regulation board", "unanimous resolution", "proxy", and "management agency" could have further enhanced the efficiency of these schemes. The IFP believes that clarity of these issues could be accommodated within these Bills, instead of in a later amendment.
The Community Schemes Ombud Service Bill is welcomed by the IFP, particularly the dispute resolution service that it aims to establish for all community schemes.
Unfortunately, there are grave areas of concern, in particular the almost centralised structure of the proposed offices. The IFP has noted the vagueness around the number of regional offices, where the community schemes in especially rural and semirural areas are neglected. Sir, "community schemes" are by definition local entities and therefore require local offices. The cost implication of local offices can be addressed by means of proper planning and research, which could produce a sensible local structure model. This is to ensure access to these services by local communities.
Clarity is needed around the levies that the service could potentially generate, to ensure that the said entities do not become cash cows for the ombud service. This will have to be accompanied by the department's business case, which would specify the operating expenditure for the ombud service. If these issues are addressed, the proposed ombud service should be a beneficial institution for all concerned.
Mhlonishwa Sihlalo, siyambonga kakhulu umama uDambuza ngokuthi akwazi ukuthi abekezele angalali, futhi abekezelele ukwehluka kwemiqondo yethu ukuze lo Mthethosivivinyo ube yimpumelelo ngokusebenza ubusuku nemini nekomidi lakhe. Ngaleyo ndlela iNkatha yeNkululeko iyaweseka lo Mthethosivivinyo. Ngiyabonga. (Translation of isiZulu paragraph follows.)
[Hon Chairperson, we thank Ms Dambuza very much for being able to stay awake, and being patient with our different opinions in making this Bill a success and also for working around the clock with her committee. The Bill is welcomed by the IFP. Thank you.]
Chairperson, hon Ministers and Deputy Ministers, and hon members, thank you for allowing me to participate in this debate on the Community Schemes Ombud Service Bill. Community schemes bring together people from diverse backgrounds, age groups, interests and philosophies. Their objective is ownership of a unit in a community scheme in which they live and share common facilities in designated common use areas. Integrating such diverse backgrounds into a stable and successful scheme presents many challenges.
The creation of an independent body in the form of the Community Schemes Ombud Service, tasked with facilitating and arranging both simple and inexpensive recourse in the handling of disputes is necessary. The board will ensure independence, fairness and impartiality, and promote uniformity and consistency in the handling of disputes.
Considering the fact that the vast majority of new South African housing is coming onto the market in the form of one or other type of community scheme, the people need more protection against unscrupulous developers, investors, absent landlords and managing agents. The committee was passionate that this Bill should address all the challenges that currently exist. The various sections were therefore scrutinised closely and debated intensely.
We expressed concern about the original omission of housing co-operatives from the definition of the community scheme, whereupon it was agreed that "housing co-operatives", as contemplated in the Co-operatives Act, Act 14 of 2005, and the "scheme" have the same meaning.
We also debated the conciliatory role, a significant one, in dispute resolution and the fact that it must be identified alongside adjudicators in clause 4. It was agreed that clause 4(b) should be amended to contain wording relating to training of conciliators, adjudicators and other employees of the service.
We therefore noted the need to cater for criminal liability for breaches of clause 11. This was done by amending clause 34, with the addition of the new subsection which reads as follows: 4. (1) The Service must -
a) develop and provide a dispute resolution service in terms of this Act;
b) provide training for ... adjudicators and other employees of the service;
c) ... monitor and control the quality of all sectional titles ... and other such scheme governance documentation as may be determined by the Minister by notice in the Gazette; and d) take custody of, preserve and provide public access ... to sectional title ... and such other scheme governance documents as may be determined by the Minister ...
2) In performing its functions, the Service -
a) must promote good governance of community schemes;
b) must provide education, information, documentation and such services as may be required to raise awareness to owners, occupiers, executive committees and other persons or entities who have rights and obligations in community schemes ... ; In addition, this information needs to be given to members of the public, with regard to rights and obligations existing in community schemes. Furthermore, the service -
c) must monitor community scheme governance; and
d) may generally, deal with any such matters as may be necessary to give effect to the objectives of this Act.
As far as the funding of the ombud service is concerned, it is noted that government assistance will be required for the first three years after its establishment. The members of the committee had a discussion on the matter, and we agreed that the team - the Minister and the Ministry as a whole - would look at the matter and make proposals that would assist us to ensure that after three years we would be allowed as members of the House to sit down and look at the matter and then take a final decision.
The committee as a whole debated this matter and agreed that some of the matters that have been raised in both sectional schemes and the ombud service are interrelated. They are working together to build a team. There is agreement in the committee that the whole issue must be addressed by the Ministry to ensure that there is proper running of the scheme in our country, because there are a lot of members of our communities who will always occupy these sectional titles and who are also working together to ensure that they improve the quality of life of the people.
The ANC is happy with the discussion and elaboration in the committee, and we have agreed that we support the Bill as proposed and amended by the committee of this House. Thank you very much. [Applause.]
Chairperson, hon Ministers and Deputy Ministers present, and hon members, the aim of the Sectional Titles Schemes Management Bill, which is the one that I am going to deal with on behalf of the ANC, is to remove the scheme governance provisions currently contained in the Sectional Titles Act from the Act and to incorporate these provisions into the proposed Bill.
Today, 51% of all homeowners are purchasing sectional titles and buying into community schemes and many of these will be buying into these schemes for the first time. Therefore Parliament is required to process legislation that clearly assists people to protect what for most of them is the biggest asset they have to purchase.
The Bill provides for the setting up of body corporates, their functions and powers; the trustees of body corporates and their functions in the day- to-day running of the scheme; the responsibility of the owner; what is covered by the insurance of the scheme and whether the owner will need to take out extra insurance for himself; and the establishment - as we have already mentioned - of a Sectional Titles Schemes Management Advisory Council to make recommendations to the Minister regarding regulations and to give advice regarding amendments to this Act. With regard to the regulations - the hon Steyn alluded to this - the Bill states in clause 19 that:
The Minister may, after consultation with Parliament, make regulations.
This is very important: "after consultation with Parliament" is particularly pertinent because of the oversight role of Parliament.
The portfolio committee, in dealing with this Bill, took into account the submissions made by the public and I now want to just refer to two of those and highlight them because I believe they have improved the Bill.
The first one relates to funding and this is also referred to under "Functions of bodies corporate" in clause 3(1). It states that the body corporate needs to establish and maintain two funds, an administrative fund which is reasonably sufficient to cover the estimated annual operating costs, and a reserve fund to provide for the future maintenance and repair of common property. The minimum amount will be prescribed by the Minister.
The administrative fund will provide for the day-to-day running of the scheme - things like repairs, maintenance, management and administration of the common property which is generally shared by all in the scheme. This will include the payment of charges to the municipality, such as electricity, water and sanitation, the payment of insurance premiums relating to the building or land, and so on. The reserve fund will need to take care of larger projects, for example, when the building needs painting, there are major repairs, a new security gate might be needed, or there are big repairs to the swimming pool.
During our hearings, one lady told the committee in her submission that the block of flats she had invested in was not being maintained properly. It was badly in need of paint and repairs, but there was no money. That is poor forward planning and what we want to avoid by establishing these two funds. People want their assets to be properly looked after and this Bill will go a long way toward protecting them.
The second one relates to proxies. In regard to meetings of the body corporate, it is stated in clause 6(5) that:
A member may be represented in person or by proxy at such a meeting, provided that any one person may not act as a proxy for more than two other members.
The committee found in the submissions made that the option to have a proxy vote had been hugely abused in the past. If a particular person had a particular agenda, they could phone around and get as many proxies as they needed to have their view adopted, regardless of whether it was in the interests of the scheme or not. The Bill now allows for only one person to be proxy for two other people. This should also encourage people to attend the annual general meeting instead of having the majority of the votes coming from empty chairs, like ghosts.
To ensure that people receive the benefits of the legislation, there will be training and education to help them understand it. When we visited Australia to ensure best practice in the ombud Bill, we were impressed with the care taken to educate and train people. Each person is given an owner- friendly booklet advising them of the legislation pertaining to their purchase. We will ensure the same will apply here.
Hon Chairperson, the state law advisers and the Department of Human Settlements are of the opinion that this Bill must be dealt with in accordance with the procedure established in section 76 of the Constitution of the Republic of South Africa, Act 108 of 1996, since it falls within a functional area listed in Schedule 4 of the Constitution, namely Housing. The ANC supports the Bill. I thank you. [Applause.]
Chairperson, as alluded to by the President, by 2014 over 400 000 people will have security of tenure. All of this cannot be achieved, however, if we do not have policies and legislation, or if we put into practice policies and legislation that nullify government's policies of service delivery implementation. Therefore, this piece of legislation is long overdue - you cannot progress with old, outdated legislation. The MF supports both pieces of legislation.
The main problem is that the whole sectional title deed environment still preserves the dominance of white people. They still control everything around sectional title. According to our expectations, they will make every effort to ensure that black people are excluded from their efforts. This must, however, translate into sound economic benefits for all across the racial sectors. We need to leverage the economic benefits that come from sectional title.
The MF's concerns were around the issue of education. It is of paramount importance that there should be sound, meaningful transformation. Many previously disadvantaged blacks were not familiar with the entire sectional title matter. The establishment of the ombud will deal with problematic issues and indeed it will see to the poor people who have lost their homes previously.
We must take note of the fact that people are entitled to only one housing subsidy. The MF also welcomes the curbing of the powers of delegation, which were indeed utilised to advance certain economic agendas. The introduction of the ombud will see people save money and time, and matters will be addressed prior to going to court. People must not be prejudiced because of a lack of education, and lose their homes - that is rather sad.
As included in the sectional title, people must get transfers of their homes. Whilst the Minister has said that ownership of property creates asset wealth, communities in rural areas are still waiting for the transfer of their properties ... The MF will support both pieces of legislation. [Time expired.] [Applause.]
Chairperson, the DA welcomes the idea of establishing a Community Schemes Ombud Service. We are of the view that this service will bring relief to hundreds of thousands of homeowners who at times find themselves victim to a lack of access to fair and just representation on property matters. However, we are concerned about the costs associated with the establishment of regional offices and we requested the department to consider sharing offices with other agencies, for example the rental housing tribunals, where possible.
Secondly, the ongoing operating costs are of concern to the DA, adding to the R20 million to be provided in the establishment. At this stage it is envisaged that owners of community schemes will be levied and we are concerned about the added financial burden on the consumer. The department will have to guard against a situation where we will have another inefficient state entity that will continue to depend on homeowners.
The committee undertook a study visit to Australia at the end of November 2010 because our service is based on the Australian model.
I represented the DA on this visit. Notably, the sectional titles scheme owner in Australia does not fund the ombudsman, as envisaged in our Bill. It forms part of the Department of Justice in Queensland, Australia. Of interest is that in Australia the Office of the Commissioner for Body Corporate and Community Management - as it is known there - operates within a single state and this is not replicated across the whole country, as is envisaged in South Africa.
In South Africa, an increasing proportion of housing is being developed in the form of community schemes, in which there is governance by the community owners involved in shared financial responsibility and land or facilities used in common. Community schemes include sectional titles schemes, share block companies, homeowners' associations and housing schemes for retired persons.
Because a community scheme involves the regulation and administration of finances, facilities and behaviour, it often gives rise to problems and disputes amongst participants, which require effective resolution on time. There is currently no effective and affordable dispute resolution mechanism available to parties involved in community schemes in South Africa.
Since the demise of apartheid in 1994, an increasing number of members of previously disadvantaged communities are acquiring ownership in community schemes, and are not familiar with the process and technical aspects of ownership of the scheme. The Community Schemes Ombud Service Bill seeks to address this need, since it will establish a simple and inexpensive recourse for owners involved in any dispute. Furthermore, the Bill promotes uniformity and consistency in handling disputes, and provides a remedy for the protection of this good administration.
Chairperson, notwithstanding the concerns mentioned earlier, we will seek to keep the proposed increase in existing levies to fund the service as low as possible. A possible figure of between R10 and R50 per month has been mooted and will possibly work on a sliding scale. This will be contained in the regulations which will have to be brought before the committee before the Minister can gazette them.
Ngalo mazwi ke, i-DA iyawuxhasa lo Mthetho uYilwayo. [Kwaqhwatywa.] [With those words, the DA supports the Bill. [Applause.]]
Hon Chairperson, hon Ministers and Deputy Ministers, and hon members, due to the growing scarcity and resultant increase in the cost of urban land for housing purposes, sectional title housing is not only suitable, but in part one of the solutions for the process of urbanisation now taking place in South Africa. But, whereas the suitability of the sectional title format to provide housing in an urban environment has been proven beyond doubt, sectional title schemes can degrade, with a resultant loss of value for homeowners due to mismanagement, or even a total lack of management. Typical problems are aspects such as a lack of enforcement of rules, inadequate maintenance, nonpayment of levies and noncompliance with the essential financial and administrative requirements.
Major management decisions regarding the scheme are made by the body corporate - which is the collective name given to all the owners in a scheme - usually at the annual general meeting, where matters affecting the scheme are discussed, budgets are approved and rules are made and changed. A substantial list of management functions, powers and additional powers are entrusted to the body corporate in terms of clauses 3, 4 and 5 of the Bill. Clause 7 further dictates that the functions and powers of the body corporate must be performed and exercised by the trustees of the body corporate holding office in terms of the rules. Professional managing agents are appointed to perform the day-to-day management functions on behalf of the trustees and, by extension, the body corporate in the bigger sectional titles schemes. This is also because the majority of the trustees are in full-time employment.
Hon Chairperson, inasmuch as the Bill requires each trustee to stand in a fiduciary relationship to the body corporate, which means that he or she must act honestly and in good faith in relation to the body corporate, this is expected even more from appointed managing agents in respect of honesty and trustworthiness with regard to the trustees. One would expect that there would be a code of conduct by which managing agents would abide and which would oversee their day-to-day activities in relation to sectional title schemes. The committee has been given the assurance that this matter will be attended to in the regulations in terms of clause 19 of the Bill.
The committee also strongly supports the establishment of a Sectional Titles Management Advisory Council. This council makes recommendations to the Minister concerning any matter in respect of which the Minister may make regulations. Furthermore, the council must keep the implementation of the Act and the regulations under regular review and make recommendations to the Minister with regard to any amendments thereof. The advisory council will consist of the chief ombud as chairperson, a senior official of the Department of Human Settlements, and not more than five and not fewer than three persons with skills, knowledge and experience in the management of a range of types of schemes.
Hon Chairperson, the ANC supports the Bill. I thank you. [Applause.]
Chairperson, as we conclude this part of our debate in respect of the two Bills, let us appreciate the work which has been executed by the portfolio committee, which is ably led by hon Dambuza.
I know how difficult it was for the committee to come to terms here. They spent a lot of time, many nights and days, debating. One appreciates the fact that all parties agreed to the two Bills. We congratulate the parties for doing that. We also congratulate them on their involvement in this debate.
We will take on board details expressed here by various members - as they say, the devil is in the detail, and there are many details associated with the two Bills. A lot has been said here. Our director-general is in the House and we will still have to download this. I must be honest with you, I didn't pick up everything. Normally we download some of the things which have been said here so that we can go line by line in taking advice that has been put here.
As the Minister responsible, I also want to reiterate my commitment to applying the duties and functions, as well as various responsibilities, around the two pieces of legislation even-handedly. In that respect we would like to continue to assure members of the House that we are going to engage with the various stakeholders so that we can explain to them the direction that we are taking and give them comfort about the even-handed manner in which we are going to apply this legislation.
Last but not least, I also want to thank and congratulate the Minister of Rural Development and Land Reform, Minister Gugile Nkwinti. First and foremost, he gives us lots of land - we can't have human settlement without him! We also thank him for his co-operation and the role that he has played in seeing to the smooth transfer of these two pieces of legislation from his department to Human Settlements. Thank you.
Debate concluded.
Sectional Titles Schemes Management Bill read a second time.
Community Schemes Ombud Service Bill read a second time.