Use Arbitration Over Litigation To Settle Sectional Title Disputes But Remember To Do Things By The Book
The popularity of arbitration rather than litigation in sectional title property disputes stems from its being both less expensive and faster, says Michael Bauer, general manager of IHFM, the property management company.
Bauer has pointed out, however, that the Regulations to the Deeds Registries Act have been amended, and these changes took effect on the 2nd May 2013. One of the amendments to note, is that any application to the Chief Registrar to appoint an arbitrator must be accompanied by a R500 application fee. Any application without the fee attached will be rejected.
Prescribed Management Rule 71 (A) allows for arbitration between an owner (or owners) and the body corporate – or vice versa – and between one or more owners and another owner or owners.
“In view of the effectiveness of arbitration,” he said, “it is important that all sectional title trustees and owners know how to go about it.”
The steps in the process are:
· “Serving”, i.e. delivering a first notice of dispute to the other party. This must state in full the nature of the complaint or dispute.
· Notifying the scheme’s trustees and managing agent of this.
· Waiting 14 days for a response, failing which either of the parties can then demand that arbitration goes ahead.
· Serving a second notice of dispute and proposing two or three suitably qualified and independent persons as arbitrators.
· Allowing three days for a reply, failing which, or in response to which, the complainant can ask the Chief Registrar for an arbitrator to be appointed – who will then guide both parties through the arbitration process.
Bauer said that the threat of arbitration often brings about a settlement because it is now widely known that the loser may end up having to pay not only what is demanded (if damages are involved) but also the legal costs for himself and his opponent.
He added that PMR 71 will fall away when the Community Schemes Ombud Services Bill comes into the effect.