Property Reporter

THE land affairs department is to investigate the feasibility of introducing a sectional titles ombudsman because existing forums for settling disputes are not easily accessible.

A task team has been set up to investigate.

Deputy Agriculture and Land Affairs Minister Dirk du Toit is convinced an ombudsman is needed. He says the Sectional Titles Act of 1986 provides for two kinds of forum for dispute resolution: the courts and arbitrators.

However, Du Toit says the land affairs department has received a significant number of complaints from sectional title unit owners relating to disputes between owners or disputes between bodies corporate and owners.

Du Toit also says some experts have written to him about problems pertaining to the system.

"It is quite clear that the present situation is untenable because the costs of access to courts and the voluntary nature of arbitration makes conflict resolution impracticable. In fact, the present situation just gives rise to emotional conflicts without logical and equitable resolution."

In an effort to find a less costly and more effective way of resolving disputes in the sectional titles industry, he says the industry decided to see whether a sectional titles ombudsman would be feasible. It also took note of ombudsman offices in banking and insurance.

Du Toit says that because of the complexities of the investigation, his department has asked the housing, justice, trade and industry and social development departments to lend a hand.

A task team of officials from these departments is now in place.

The land affairs department's deputy director-general of land planning and information will play a leading role in the new team's activities.

Du Toit says an ombudsman would be established via new legislation, not by amending the existing act.

The department will also obtain, by public tender, a consultant to manage the day-to-day work of the investigation. This person would also have to draft the envisaged legislation.

The ombudsman's offices in other jurisdictions would be closely researched, and the consultant would also have to consult all stakeholders in housing, the sectional title industry, retirement villages, rental housing, share-block schemes, banking and so on.

Du Toit hopes Parliament will pass the new act next year.

Concerning funding, Du Toit is confident the new position will not necessarily be a "burden on the state".

He reckons a "very negligible" contribution from sectional title transactions could fund the office, which would benefit sectional title owners. Last year 34188 sectional title transfers valued at almost R26bn went through the deeds office.

Du Toit says that, in his view, the sectional titles dispensation is a "highly sophisticated first-world arrangement", and that it should have a high degree of self-management within a clear and fair regulatory framework.

He says there is a great need for a type of sectional titles arrangement for lower income levels.

"We will only be able to attend to this popular type of sectional title system when we have articulated the first-world system in a satisfactory manner," says Du Toit.

Sectional title legislation was introduced in SA in 1971.

Mar 24 2004 07:21:16:000AM Nick Wilson Business Day 1st Edition