KZN floods: the issues around the destruction of sectional title housing schemes

The recent floods in KwaZulu-Natal have left a trail of death and destruction with some 4 000 homes destroyed and more than 8 000 damaged. For homeowners in sectional title complexes, the aftermath includes uncertainty and anxiety about whether the scheme that they have invested in will end as a result of the damage, or whether repairs should be undertaken – and what say they have in these considerations.  

The end of a sectional title scheme, as a result of physical destruction, is covered in Section 17 of the Sectional Titles Schemes Management Act (STSMA). “What happens when the unthinkable happens? It is important for owners to know that the scheme will be deemed ‘destroyed’ if the building or buildings that comprise the scheme are actually destroyed”, comments specialist sectional title attorney and BBM Law director, Marina Constas.

If the damage is limited to certain sections and common property areas, the STSMA makes provision for members of the body corporate to decide, by unanimous resolution, if the sections that have been destroyed should be rebuilt and the scheme reinstated, or whether it would be expedient for the scheme to continue its life without the one, two or five units that no longer physically exist”.

If the members are unable to reach consensus by unanimous resolution, then any interested party can approach the court for an Order as to whether the entire building should be rebuilt or reinstated or only a portion thereof – without the units destroyed by the floods”.

Constas explains that unit owners are also empowered to pass a unanimous resolution – or the court can make an Order if they are unable to agree – concerning a number of other matters connected with the destruction of the building. “These include how insurance monies received by the body corporate must be used and decisions on the payment of money by or to a unit owner or owners. The owners can also pass a resolution to amend the sectional plan of the scheme to make provision for an increase to the common property as a result of the destruction of a unit or units or, alternately, a decrease to the common property. Additionally, owners are empowered to resolve to vary the participation quota of a section or sections, and they may impose any conditions”.  

There are several people and companies that may have interests in the dissolution of the body corporate – or the end of the sectional title scheme – not least of which is the insurer of the building or any part of the buildings, and the STSMA grants the insurer the right to intervene in the proceedings,” she concludes.