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THIS MONTH:

1) CAN A BODY CORPORATE / SERVICE PROVIDER CUT OFF SERVICES?

2) CONVEYANCING:  DEEDS OFFICE AND CITY COUNCIL CLEARANCE DEPARTMENTS TURN-AROUND TIMES DURING LEVEL 3 – DELAY IN REGISTRATION

3) ALERT LEVEL 3 – THE CURRENT STATUS ON THE GATHERINGS AS FAR AS BODY CORPORATE MEETINGS ARE CONCERNED

4) ABOUT US

1) CAN A BODY CORPORATE / SERVICE PROVIDER CUT OFF SERVICES?

Can a body corporate cut off services in an attempt to impel an owner to pay arrear contributions due and owing?

This is a frequently asked question.

Historically legislation prevented a body corporate from cutting off services such as water and electricity. The right to cut off electricity was a statutory right reserved for municipalities and bulk suppliers of electricity such as Eskom.

A body corporate could therefore not cut off electricity, change locks or in any way restrict access to services and if they do, the owner or tenant of the unit would be entitled to approach a court for a spoliation order to restore services / access to services and to obtain a cost order against the body corporate.

The word spoliation comes from the legal remedy used to restore possession, known as the mandament van spolie.

The requirements for a spoliation application are two-fold:

1. The Applicant must have been in possession of something (in this case the services).
Take note that the possession is not required to be a lawful possession.

2. The Respondent must have deprived the Applicant of possession forcibly or wrongfully and without the Applicants’ consent.
In most cases when services are terminated or suspended by a body corporate without a court order, a court will find in favor of the Applicant in a spoliation application.

The only remedy to collect arrear levies and utilities in sectional title schemes were to follow the laborious debt collection process and wait your turn.

Fortunately, the position changed in recent years when the right to cut off electricity and water was extended to a body corporate as the judge in the case of Cathkin Peak South V Johnson And Another felt that utilities should not be subsidized where the occupant refuses to make payment of amounts legitimately owed.

The cutting off of services serves a dual purpose:

1. The body corporate limits its exposure / damage by not having to subsidize the occupant’s utilities bill; and

2. The cutting of services could result in the desired outcome where the owner pays his arrear levies in order to have his services re-connected.

It is important to note that this extended right does not afford the body corporate a carte blanche to cut electricity or water, thus the correct legal route must still be followed.

So, the question is then, how is this done?

The body corporate must obtain a court order to cut off services.

Once the court order is granted the body corporate is authorized to cut the services and Eskom or the municipality is not needed.

This extended right is only applicable where the outstanding money is in respect of utilities (water and electricity).

Annelize Joubert - Senior Associate

2) CONVEYANCING: DEEDS OFFICE AND CITY COUNCIL CLEARANCE DEPARTMENTS TURN-AROUND TIMES DURING LEVEL 3 – DELAY IN REGISTRATION

During May 2020, the Deeds Offices in South Africa and various City Councils reopened to accommodate the property sector with property transfers, bond registrations and related aspects. The announcement for the reopening of the Deeds Office and Clearance Departments of Council was applauded and everyone in the property sector was thrilled to return to work ‘full time’. Little did we know how this ‘new normal’ would affect the practice of Conveyancing. It has not been smooth sailing and the obstacles encountered, ranging from closure of Deeds Offices for decontamination, limited number of staff members at the Deeds Offices and City Councils have affected the turnaround time for registration in the Deeds Offices.

The larger City Councils rolled out electronic platforms for Conveyancers to submit rates clearance applications, the issuing of rates clearance figures and certificates electronically. The system is working, however, there is a limited number of council employees attending to the issuing of rates figures and certificates. As a result, we find that the City of Tshwane Metropolitan Municipality (whom we work with most) has a turnaround time of approximately 4 – 6 weeks for the first issuing of rates clearance figures, after submission of the electronic application. There is further no effective escalation process, to follow up or enquire regarding delay or further process. The City of Johannesburg rates clearance department is able to issue figures within a week. We have been informed that they are now experiencing a backlog in the issuing of certificates for lodgment. However, there is an effective communication portal with the City of Johannesburg.

The Deeds Offices of Cape Town, Pretoria and Johannesburg respectively have all, been closed at intervals during the last few weeks for decontamination (as a result of a Conveyancer or Employee testing positive for the COPVID-19 virus). The Cape Town Deeds Office was the hardest hit, who was, on numerous occasions forced to close their offices to attend to decontamination. Despite all of this, not all employees of the Deeds Offices have returned for duty. With the decontamination and the limited number of employees, the slow turnaround times will continue. This will unfortunately have a ripple effect as the rates clearance certificates issued is only valid for 60 days from the date of issue. We understand that the current turnround time (from lodgement to registration) is over the 30 days in Cape Town. The Pretoria and Johannesburg Deeds Offices are slower in its turnaround time. The Limpopo Deeds Office is currently between 7-10 working days.

We remain positive, and will “fight this struggle” together with our loyal clients.

Hannelie Hattingh - Conveyancer, Senior Associate

3) ALERT LEVEL 3 – THE CURRENT STATUS ON THE GATHERINGS AS FAR AS BODY CORPORATE MEETINGS ARE CONCERNED

South Africa has been placed on Alert Level 3 Lockdown since 1 June 2020 which led to the re-opening of various sectors of its economy as well as an increase in the movement of its citizens.

The movement of a person is regulated under section 33 of the Disaster Management Act, 57 of 2002 as amended, which provides that a person may leave his or her place of residence to perform any service as permitted under Alert Level 3 as well as to travel to and from work.

Despite the above, the regulations under Alert Level 3 still places a prohibition on all gatherings with certain exceptions.

President Cyril Ramaphosa has recently (on 17 June 2020) addressed the nation on the further ease of restrictions under Alert Level 3. The cabinet has decided to ease restrictions on certain other economic activities, such as the re-opening of conferences and meetings for business purposes which will most probably be in line with restrictions on public gatherings.

On 25 June 2020, various amendments to the Regulations to the Disaster Management Act was published in the Government Gazette to give effect to the relaxation of the restrictions as announced by the President.

The amended section 37 makes provision for gatherings and stipulates the following:

“37(1) all gatherings are prohibited except a gathering at –

(a) a faith-based institution which is limited to 50 persons or less, depending on the size of the place of worship;

(b) a funeral, subject to regulation 35;

(c) a work place for work purposes;

(d) conference and meetings which is subject to -

(i) a limitation of 50 persons, excluding those who participate through electronic platforms;

(ii) restricted to business purposes; and

(iii) strict adherence to all health protocols and social distancing measures as provided for in directions that must be issued by the responsible cabinet member, after consultation with the cabinet member responsible for health; ….”

Some of the directions issued to adhere to the health protocols include wearing face masks, social distancing measures, screening, record keeping and sanitizing, etc.

One of a body corporate’s functions is to conduct meetings with its members, which requires the public gathering of people. In terms of the amended regulations, the body corporate will now be able to conduct such meetings on its premises, but not without limitations. The body corporate will have to implement these protocols and adhere thereto.

It is noteworthy that no restrictions are currently placed on businesses to conduct meetings on their premises, or limitations on the maximum of persons allowed to participate in such a meeting where the participants are physically present.  The business must however, when conducting such a meeting, adhere to strict compliance with health protocols and social distancing measures. In my view, the business of a Home Owners Associations as a non- profit company is no exception and no restrictions should be applicable to it, except also to adhere to strict health protocols and social distancing measures when conducting meetings. 

However, as the amended regulations fail to specify which meetings fall thereunder or to give a precise meaning thereto, this can be seen as a grey area. Therefore, caution should be taken in conducting meetings to ensure that such meetings are not in contravention of the amended regulations.

Therefore, in my view, the amended regulations will be applicable to meetings conducted by a body corporate. The trustees will be able to conduct physical meetings, however within the parameters of the amended regulations and the number of participants will be limited to 50.    

This being said, it is important that the body corporate keeps a balance to fulfil its obligation set out under the law on the one hand, and to protect the health and safety of its members against Covid-19 on the other hand.

Quintin Badenhorst - Senior Associate

4) ABOUT US

To view our previous newsletters, please visit our website on www.eyslaw.co.za.
Kind regards,

EY STUART INC.

Disclaimer: The information disclosed herein is not intended to constitute legal advice and is not guaranteed to be correct, complete, or up-to-date. You should not act or rely on any information emanating from this Newsletter without seeking the advice of an Attorney, as the facts relating to your circumstances may influence any advice or information conveyed herein. Should you require legal representation, then please do not hesitate to communicate with us for further information and our standard mandate terms.