New Sectional Titles Schemes Management Act: What to Know

The Sectional Titles Schemes Management Act (STSMA) has been signed into law and became effective on 7 October 2016. Here are some of the notable changes.

October 13, 2016

Trustees of sectional title schemes will have to reassess the levy contributions from owners each month.

The Community Schemes Ombud Service Act (CSOSA) has also been signed, and became effective on the same date as the STSMA. Each community scheme, which includes sectional title schemes, share block companies, home or property owners’ associations, housing schemes for retired persons and housing co-operatives, is required to fund the Community Schemes Ombud Service (CSOS) and must collect a prescribed monthly levy from every unit and pay it to the CSOS on a quarterly basis. The levy will be based on a sliding scale according to levies paid by the owners. The current prescribed maximum CSOS levy is R40 a month.

The main function of the Community Schemes Ombud Service (CSOS) will be to assist in dispute resolutions and control sectional title governance. The service will be available to all with a minimal administration fee and it will also be funded via the CSOS levy. With the current backlog and prohibitive costs of going through our normal courts this will be a welcome change and will offer a speedy and cost effective dispute resolution alternative. The findings of the CSOS will have the same effect as a court judgement.

Any person can apply for the CSOS to assist them in disputes and this will include assistance in coming to a resolution on matters. The CSOS will, however, refer matters that cannot be resolved to either conciliation or adjudication services.

Some of the major changes to the way schemes are managed will be as follows:

1. The schemes will have to establish a reserve fund to cover the costs of maintenance, repair, management and administration, rates, taxes and other municipality charges. The amount that needs to be set aside is 25% of the budgeted annual levy figure. The aim of this fund is to cover costs of future maintenance and repairs to common property.

2. There will be a limit on the number of proxies held per person and a person will not be able to be proxy for more than two members. Persons who own multiple units in a specific scheme will also be limited to one vote regardless of the number of units owned.

3. The chief ombud, local municipality, and local registrar of deeds need to have the domicile registered so that in events of cases being brought against bodies corporate by owners or vice versa, there is one address by which to serve notices. This is also to simplify matters as all three bodies will have the same address registered.

4. In addition, the CSOS office will assist schemes to recover arrear levies, remedy an inability to obtain either a special or unanimous resolution, resolve conflicting management and conduct rules and will ensure the safe storage and availability of management and conduct rules.

Monthly levies

Monthly levy charged by the community schemes vs Monthly CSOC levy payable

R0.00 to R500.00 | R0.00

R600.00 | R2.00

R700.00 | R4.00

R800.00 | R6.00

R900.00 | R8.00

R1 000.00| R10.00

R1 250.00 | R15.00

R1 500.00  | R20.00

R1 750.00 | R25.00

R2 000.00 | R30.00

R2 250.00 | R35.00

R2 500.00 | R40.00

Written by Wessel de Kock

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