On the 7th October 2016 two important Acts became effective and are inter- related.
The Sectional Title Schemes Management Act significantly amended the Sectional Titles Act of 1986.

The purpose of this Act is to provide for the establishment of  bodies corporate to manage and regulate sections and common property and for that purpose to apply rules applicable to such schemes and to establish a management advisory council.

This Act repealed sections 35 to 48  of the Sectional Title s Act (and other sections). Theses sections generally regulated rules in schemes and the affairs of the body corporate. These aspects are now dealt with in The Sectional Title Schemes Management Act.

The equally important newly created act entitled the Community Schemes Ombud Services Act 9/2011 is aimed at providing for a Community Schemes Ombud Service.

A “community scheme” would cover a sectional title scheme and a group housing / Home Owners Association  scheme.

It is important to be aware that Managing Agents must register existing schemes by the 7th January 2017.

For new sectional title developments the rules if they are not the standard rules have to be approved by the Ombudsman before the scheme can be registered at the Deeds Office.

Other important aspects  introduced by the new legislation include the following :

  • In Sectional Title Schemes an increased levy is payable calculated on the lesser amount of R 40.00 or 2% of the amount of the monthly levy that exceeds R500.00 (If monthly levies are less than R500.00 then you are exempted from paying the additional levy to the Ombudsman)
  • Every community scheme will have to file tax returns and submit annual financial statements
  • Insurance must be in place to cover loss for fraudulent or dishonest acts
  • A substantial reserve fund is required
  • A 10 year maintenance plan has to be presented to owners