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

Weekend Argus (Saturday Edition) - - PROPERTY -

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.

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