Generators: Luxurious or Non-Luxurious Improvement?

Installing a generator at home may sound like the ideal solution to the frustration of load shedding but what are the implications if you live in a sectional title scheme?

Bev Nelson of Shepstone & Wylie Attorneys, comments in a news brief that in a sectional title scheme it may prove more difficult to get your generator installed than with a conventional property. This is because sectional title schemes require the consent of the body corporate to make alterations to the common property, which a generator is deemed to be.

Key to the issue says Nelson is the distinction drawn between luxurious and non-luxurious improvements in the Management Rules contained in the regulations to the Sectional Title Act (the Act), as the procedure for obtaining approval differs depending on this distinction.

A luxurious improvement to the common property may be carried out if it is authorised in writing by every member of the body corporate or their representative, or if a general meeting is called and at least 80% (both in number and value) of the members of the body corporate or their representative are present at the meeting and every person at the meeting agrees to the resolution.

A special resolution of owners is needed for a non-luxurious improvement and the figure drops to an agreement in writing amongst 75% of the members of the body corporate or 75% of those present at a general meeting.

The question therefore remains, is a generator a luxurious or a non-luxurious improvement? Comments Nelson.

Unfortunately, the Act does not define what luxurious and non-luxurious improvements are. One approach has been to regard any improvement which is necessary or useful as non-luxurious, and any improvement which is desirable but not necessary, as luxurious. It will always be a subjective interpretation dependant on the circumstances of particular improvement required, and the nature of the scheme. For example, installing a generator in a residential scheme could be seen as a non-essential luxurious improvement whereas for a commercial scheme where there is machinery involved and a heavy reliance on electricity for the business to function, a generator could be seen as a necessary non-luxurious improvement.

Once the resolution has been approved, the cost of the improvement is generally split between the members of the body corporate according to their participation quotas. Although the body corporate is obliged to build up a reserve fund for such matters this amount may not always be enough to cover the expense.

In conclusion Nelson says that it is advisable to check the body corporate rules of the scheme, especially rule 33 to see if there are any particular provisions relating to the procedure of improvements to the common property, apart from those mentioned above. Any disputes over whether an improvement is luxurious or non-luxurious can be taken to arbitration.