Uncertainty over solar geysers could leave sectional titles in hot water

- 03 May 2011

3 May 2011

In most sectional title schemes, the only available place to install a solar powered geyser or water heater is the roof. Under the current Sectional Titles Act (Act 95 of 1986), the roof is common property. This complicates the allocation of rights and responsibilities regarding maintenance and repair of the geyser between the sectional title owner and the body corporate. To clarify the situation, and pre-empt conflict and potential litigation, sectional title management rules should include rules which specifically deal with installation, maintenance and replacement of solar powered geysers, liability in the event of any damage caused by burst geysers and the extent of insurance cover for those geysers.

Existing body corporates need to amend the contents of their management rules to take account of these eventualities, and developers, when opening a sectional title scheme, should ensure such rules are included upfront.

This is according to Zunaid Rawoot, lawyer at Webber Wentzel.

Rawoot says this situation is likely to become more prevalent as Eskom and other spheres of government drive the use of renewable energy sources to help reduce pressure on electricity usage.

“In fact certain municipalities already require that solar powered geysers be installed in new houses and new sectional title developments as part of the development approval. Some of the issues that may arise include: who bears the responsibility of maintaining a solar powered geyser or replacing it in the event of the geyser bursting, or who is responsible for ancillary water damage that may be caused as a result of a burst geyser?”

As a general rule, an owner bears the responsibility of maintaining or replacing any item which falls within the confines of that owner's section. The body corporate bears the responsibility for the common property. As solar powered geysers are often placed on the roofs of the building within the scheme, owners can be forgiven for thinking that the body corporate bears the responsibility of maintaining and replacing the geyser.

This is a misconception and specific provisions in the Act and more particularly in the Prescribed Management Rules (PMR) in the Act deal with this issue.

Regulation 68(1) (vii) of the PMR provides that an owner "shall maintain the hot water installation which serves his section or where such installation serves more than one section, the owners concerned shall maintain such installation pro rata, notwithstanding that such appliance is situated in part of the common property and is insured in terms of the policy taken out by the body corporate."

It is clear that owners of sections that are served by a hot water installation would bear the responsibility for maintaining and repairing the hot water installation.

Rawoot believes that the term 'hot water installation' would include the physical water tank, the required pipes and valves connecting the tank to the section and the solar panels. But is the body corporate obliged to insure the solar geysers for repairs and ancillary damage?

“Not necessarily,” says Rawoot.

Rule 29 (1) (a) (vii) of the PMR requires that the trustees of a body corporate take steps to insure the buildings and all improvements to the common property, to the full replacement value against bursting or overflowing of water tanks, apparatus or pipes. This provision however does not extend to the maintenance of the geysers, for example, replacing a thermostat or a solar panel.

In this regard Section 37 (1) (g) of the Act provides that one of the functions of the body corporate is to "insure against such other risks as the owners may by special resolution determine". So owners in a sectional scheme can, by passing a special resolution, instruct the trustees to purchase the necessary insurance to cover the cost of repairing and replacing of solar geysers and any damage incurred as a result of a burst geyser.

However, Rawoot warns that owners should be mindful that instructing the trustees to insure solar geysers does not mean that the ownership of the geysers passes to the body corporate. The ultimate ownership of the geyser will continue to vest in the owner or owners of the sections that receive hot water from the solar geyser.

Rawoot advises that while there are insurance companies that specialise in extensive sectional title cover, this can be an expensive exercise. In an established sectional scheme one should expect resistance to any resolutions that a body corporate increase its insurance cover in respect of geysers especially from owners who do not wish an increase in their monthly levies. Where there is sufficient resistance to impede the passing of such a resolution, owners may take steps to procure individual insurance cover for their geyser and bear the responsibility of paying the insurance premiums and excess in the event of a claim.

He concludes that these issues are only likely to increase, and it will save all parties time and money if rights and responsibilities with regard to solar geysers are clear upfront.

ISSUED BY: FD Media and Investor Relations

Dani Cohen (021) 487 9000 /082 897 0443/ dani.cohen@fd.com

Natasha Smuts (021) 487 9000 / 082 776 2840 / natasha.smuts@fd.com

ON BEHALF OF: Webber Wentzel

For further information please contact:

Zunaid Rawoot Webber Wentzel Tel: (021) 431 7392

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