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.]