Arbitration a less expensive avenue than litigation to settling sectional title disputes

ARBITRATION is preferred to litigation in sectional title property disputes because the process is less expensive and faster, says Michael Bauer, general manager of IHFM property management company.

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.

However, the Deeds Registries Act Regulations have been amended, and the changes took effect on May 2.

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 that does not have the fee attached will be rejected.

“In view of the effectiveness of arbitration, it’s important for all sectional title trustees and owners to know how to go about it,” says Bauer. The steps in the process are:

Serve or deliver a first notice of dispute to the other party. This must state in full the nature of the complaint or dispute.

Noti f y t h e s c h e me’s trustees and managing agent.

Wa i t 1 4 d a y s f o r a response, failing which either of the parties can then demand that arbitration goes ahead.

Serve a second notice of dispute and propose two or three suitably qualified and independent persons as arbitrators.

Allow three days for a reply, failing which, or in response to which, the complainant may ask the chief registrar for an arbitrator to be appointed – who will then guide both parties through the arbitration process.

Bauer says the threat of arbitration often brings about a settlement because it is now widely known the losers may end up having to pay what is demanded if damages are involved, as well their and their opponents’ legal costs.

He says that PMR 71 will fall away when the Community Schemes Ombud Services Bill is passed and comes into effect.