Body corporates and access to information. What are the rules of engagement?

29 May 2024 145
Unit owners in a sectional title may from time to time feel that the body corporate is not managing the scheme effectively or correctly. Whether such belief is legitimate or not, often comes down to the information that the owners have access to which can prove or allay fears of mismanagement. But, how do unit owners access information often under the control of the body corporate?

In the recent case of Montrose Mews Body Corporate v Moela NO and others [2024] JOL 63438 (GJ) the Gauteng Local Division of the High Court, Johannesburg had the opportunity to consider whether, in this specific matter, the Promotion of Access to Information Act 2 of 2000 (“PAIA”) or the Sectional Titles Schemes Management Act 8 of 2011 (“STSMA”) had to be used to obtain information from a body corporate. 

The dispute in the Montrose-case arose when an owner of a unit in the Montrose Mews sectional title scheme suspected that the funds of the body corporate were being mismanaged. The owner requested bank statements from the body corporate. The owner was however informed by the body corporate that such a request was subject to the provisions of PAIA. Dissatisfied with the response received from the body corporate, the owner approached the Community Schemes Ombud Service (“Ombud”) for an order providing clarity on whether the request had to be made in accordance with the provisions of PAIA. The Ombud determined that the provisions of PAIA did not apply to the owner’s request and that requests of that nature were regulated by the STSMA. 

The body corporate disagreed with the order of the Ombud and contended that PAIA was applicable and subsequently lodged a review application against the order of the Ombud in the Gauteng High Court. 

On review, the High Court agreed with the conclusion reached by the Ombud and held that PAIA was not applicable to the request made by the owner. This was especially due to the fact that the prescribed management rules provide owners with the entitlement to request books of account to “assess the body corporate’s financial situation”. The court further emphasised that PAIA does not apply to instances where there is a pre-existing legal relationship between the person seeking the information and the person holding the information such as in the case between an owner of a unit and the body corporate of a scheme. 

However, the court did point out that this did not mean that an owner is entitled to unlimited access to information. In the context of the matter before the court, the owner’s entitlement to access information was limited to the information which would enable her to assess the body corporate’s financial situation. Thus, the purpose of the request as well as the scheme rules would be important in determining whether the information requested should be provided. Further, it should be noted that it does not mean that PAIA will not apply, only that in this instance taking into account the pre-existing legal relationship between a unit owner and body corporate and the type of information requested, that STSMA applied to the consideration of the request.

Should information be required from a body corporate, unit owners would be well advised to approach their attorney to assist in requesting such information through the correct channels.


Disclaimer: This article is the personal opinion/view of the author(s) and is not necessarily that of the firm. The content is provided for information only and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever and no action should be taken on the basis thereof unless its application and accuracy have been confirmed by a legal advisor. The firm and author(s) cannot be held liable for any prejudice or damage resulting from action taken on the basis of this content without further written confirmation by the author(s). 
 

Related Expertise: Consolidation and Subdivision
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