|
FORMATION OF STRATA
CORPORATION
Presentation
The Registration of Strata Titles Act governs the
law in relation to what may be called a condominium/apartment, a
collective ownership and living.
The trend has been towards this form of
development especially within the corporate area, due to:-
With a strata development one
does not need to seek subdivision approval under the Local
Improvements Act. The Strata Titles Act itself provides for the
subdivision of registered land into strata lots in accordance
with a strata plan that must be registered at the Titles Office.
The strata plan must be prepared by a Commissioned Land Surveyor
and can only be accurately prepared when the building is up to
belt course because it is at that point that, the spatial
relationships between the various apartments have been
physically established.
After a Strata Plan has been prepared by a Surveyor it will need
to be submitted to the Kingston and Saint Andrew Corporation (KSAC)
or relevant Parish Council for approval and it is only after the
Plan has been stamped with that Approval that it can be
submitted to the Titles Office for registration.
Thereafter by lodging the Strata Plan at the Office of Titles,
the developer can proceed to apply to splinter the Title for the
property into individual titles for the strata lots depicted on
the Plan.
One or two practical words of caution before proceeding to
strata property. You should in all cases -:
(a) ensure that the
Restrictive Covenants endorsed on the Title permit the
subdivision of the land into Strata Lots. If they don’t then
you would need to make an application to the court to have
them modified to permit such division of the land.
(b) have a Surveyor do a Surveyor’s
Identification Report of the property to ensure that there
are no boundary discrepancies that need to be rectified.
Formation of
Strata Corporations
Once the Strata Plan is registered, the owners of the strata
lots automatically become a body corporate called “the
Proprietors Strata Plan No. _______. With a new complex
therefore, until the first unit is sold, the Developer would
constitute the Proprietors Strata Plan No._______. The Act
places a number of duties and obligations on the Corporation and
it is the Corporation that is really the managerial vehicle for
the complex.
BY- LAWS
The use, maintenance and enjoyment of the
property comprised in every Strata Plan is governed by a set of
rules called “by-laws”. These by-laws (set out in the First and
Second Schedules to the Act) come into force immediately on the
registration of the Strata Plan and remain in force unless
amended or altered by unanimous resolution in the case of those
set out in the First Schedule and by the Corporation in the case
of those set out in the Second Schedule. This is an area to
which not enough attention is usually paid by developers. Here
is an opportunity to tailor the rules that govern conduct in the
property to suit the particular circumstances.
Consider easements
Problems arising in relation
to Management of Strata Properties
Over the years a number of problems have arisen
in relation to the management of strata properties and the
Government appointed a committee to review the Act and make
recommendations. Unfortunately none of these recommendations
have as yet been passed into law.
The committee considered a number of issues, the
more salient ones being –:
-
The non payment of
maintenance fees by owners
-
The difficulty of
obtaining unanimous resolutions in matters where they are
required under the Act
-
The absence of a body
to monitor the functioning of Strata Corporations.
-
Establishment of a
Reserve Fund
-
Notification re change
of ownership of strata lots.
1.
Non-payment of maintenance fees by proprietors
This has been one of the chief
problems affecting such properties. The nonpayment of such fees
often leads to non-payment of insurance premiums, arrears in
utility bills, and neglect in the upkeep of the common
facilities. All of this of course results in the deterioration
in the value of the strata properties. The Act provides for the
Corporation in such cases, to recover the money in an action
brought in any court of competent jurisdiction. This however is
an inadequate remedy as it often takes months for such matters
to come on for trial and even after a judgment is obtained there
is the time that is required to enforce it.
The Government had proposed to
amend the Act by providing that where maintenance fees were owed
for a period exceeding thirty (30) days –:
-
a caveat could be lodged
against the Title for the Strata Lot
-
the creation of a statutory
charge under which the arrears would constitute a charge
(conferring a power of sale on the Strata Corporation) on
the Strata Lot of the delinquent owner.
-
the Corporation could charge
interest on the arrears of such fees
None of the amendments proposed
above have as yet been incorporated into the existing
legislation.
2.
Unanimous Resolutions
Another problem faced by Strata Corporations is
that under the Act there are a number of matters that requires
the unanimous approval of all the proprietors of all the Strata
Lots in the complex.
The Act presently provides that only a unanimous resolution can
authorize Strata Corporation to -:
-
insure for risks other than
fire, earthquake, hurricane
-
not insure the buildings for
replacement value against fire, earthquake and hurricane
-
amend or vary its by-laws
-
transfer or lease any part of
the common property
-
execute a grant of easement
or restrictive covenant
-
declare the building
destroyed
This creates a very real problem
because the absence or opposition of even one proprietor means
that the decision cannot be taken. Most Corporations are
affected by proprietors who reside overseas and neither attend
meeting nor designate proxies. In any event, if even one person
is oppose to the resolution it will fail. A unanimous resolution
is in most cases very difficult to obtain.
The Government proposed that -:
-
except for decisions required
in respect of insurance, a resolution is to be regarded as
passed, if, at a duly convened meeting of the Strata
Corporation all those persons entitled to vote under the Act
who are present either personally or by proxy vote in favour
of the resolution, and those other persons not in attendance
subsequently agree to it in writing. These latter persons
would be served with a notice of the resolution and would be
required to signify their agreement either personally or by
proxy.
-
Decisions taken relating to
insurance are to be by a “special” resolution. A special
resolution for this purpose would be a resolution passed at
a duly convened meeting for which at least twenty eight (28)
days notice has been given by all proprietors attending and
voting or voting by proxy, provided that those voting in
favour of the resolution represent not less than 66 2/3% of
all the proprietors eligible to vote.
These suggested amendments
however have not as yet been made to the existing Act.
3. Monitoring of
Strata Corporation
Under the existing Act, there is no machinery set
up to monitor the functioning and effectiveness of the
management committees of Strata Corporations or to arbitrate in
disputes involving strata properties.
The Government proposed that the Act be amended to provide for
the Real Estate Board to act as a Commission of Strata Titles
and to provide for the functions of such Commission to include
among other the following -:
-
the monitoring of Strata
Corporations the resolution of disputes the enforcement of
byelaws.
-
To facilitate this monitoring
process the proposal went further to recommend that the Act
provide for the compulsory registration of strata
corporations with the Commission.
These amendments have not as yet
been made to the existing Act.
4. Notification of
Change of Ownership
Under the Act as presently worded, a proprietor
is required to notify the Corporation upon any change in
ownership of his lot or of any mortgage or other dealing with
his lot. Apparently very few owners comply this requirement and
the Corporation is left in the position of not knowing the
identity of all the owners in the complex or their mortgagees.
The proposal put forward by the
Government is to amend the Act so as to put the onus in the
cases of changes in ownership of the strata lot, on both the
Transferor and Transferee in such transactions, to advise the
Corporation of such changes, giving details as to full names of
both parties and the address for service on the Transferee.
This amendment however has not as
yet been made to the existing Act.
5. Reserve Fund
Under the present Act the Strata Corporation does
not have the power to establish a reserve fund to deal with
expenses other than those of a routine nature.
The Government proposal was to
establish a fund to be known as a Revenue Fund into which would
be paid two and one-half percent (2½%) of annual contributions.
This fund would be used to cover the costs of major repairs to
or renovation of the common property in the complex on the outer
walls of a Strata Lot.
Up to the present time this
amendment has not been made to the Act.
|
