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.]