On the 7th October 2016, the new Sectional Titles Schemes Management Act (Act 8 of 2011) and Community Schemes Ombuds Act (Act 9 of 2011) were signed and became law.
To obtain copies of the Acts, please contact us at firstname.lastname@example.org or call us on 021 5315847 or 0824583173.
The Sectional Titles Schemes Management Act has changes from the Sectional Titles Act (Act 95 of 1986), but for the Trustees and Managing Agent, the main points are:
- Interest on Arrear Levies The new Act makes provision for the Body Corporate to charge interest on arrear levies, but the interest rate must not exceed that which is prescribed in terms of the Prescribed Rate of Interest Act.
- General Meetings, Proxies and Voting
- A person may not hold a proxy for more than two members.
- When votes are counted in number, as opposed to PQ, each member has only one vote, irrespective of the number of units owned by that owner.
- If a Unanimous Resolution could have an unfair and adverse effect on a member, that member will have to give written consent within seven days of the date of the resolution, failing which, the resolution will become null and void.
- Functions of the Body Corporate
- A reserve fund must be started and a formula for the minimum amount of this fund is given in the regulations.
- The Chief Ombud must be advised if the Domicilium of the Body Corporate changes.
- Liability for Contributions
- Levies and Special Levies may now be recovered by application to the Ombud.
- Special Levies will be dealt with in the same way as normal levies. The new owner will become liable for the Special Levy pro rata from the date of registration of the unit in his/her name.
- If the Body Corporate amends the Management or Conduct Rules, such amendment must be approved by the Ombud.
- On approval of the changes, the Ombud will issue a certificate and the changes will be in force as of the date of the certificate.
- Reserve Fund
The Body Corporate must prepare a written maintenance, repair and replacement plan for the common property. A Reserve Fund must be set up to cover the costs of the plan. An annual contribution to the reserve fund must be determined and collected by the Body Corporate.
- Where there are less than 4 sections in a complex, all members will be Trustees.
- The majority of Trustees are no longer required to be members or their spouses.
- The Trustees must compile minutes of each Trustee and General meeting.
- The Trustees must send a copy of the Minutes to any one entitled to receive notice of the meeting no longer than 7 days from the meeting.
- Trustees may hold meetings by telephone or other methods, subject to certain conditions.
- Quorum and Meetings
- If a Quorum is not present within 30 minutes, the Trustees present, being at least two, must adopt interim resolutions for each item on the agenda.
The Community Schemes Ombud Service Act is a new Act as the Ombud is a new position and department within the Human Settlements Department and is applicable to Sectional Title Schemes, Home Owner Associations, Share Block Schemes, Housing Schemes for Retired Persons and Housing Cooperatives. Basically, the Ombud can now be used in place of a court and therefore, save all parties large legal fees. To facilitate this,
1. The Scheme had to be registered with CSOS on or before 7th November 2016. If your scheme has not yet been registered, get hold of your Managing Agent urgently.
2. The Governance Documents of the scheme (i.e. Conduct Rules, Constitution etc) must be registered with CSOS by 7th January 2017.
3. The Annual Financial Statements have to be filed with CSOS within 4 months of the Schemes Financial Year end.
4. Collect a monthly levy from each owner, according to a formula provided by CSOS as from January 2017, and pay this amount to CSOS quarterly thereafter.
5. Ensure that your Scheme has adequate insurance against fraud or dishonesty (check with your broker)
6. Notify CSOS as well as the Registrar of Deeds of your Sectional Title Complex Domicilium.
7. Establish a reserve fund and open a separate bank account and submit a separate budget.
8. Prepare a written Maintenance, Repair and Replacement Plan for the next 10 years.
It is strongly recommended that if your managing agent has not yet briefed you about these laws, or has not yet implemented them, you ask them to do so as soon as possible.
It is also strongly recommended that if you do not yet have a managing agent, that you get quotes preferably from a NAMA approved Managing Agent as a mater of priority.
PLEASE NOTE THAT THE ABOVE INFORMATION IS A GUIDLINE ONLY AND DOES NOT CONTAIN THE FULL CONTENTS OF EITHER ACT.
For more information, please contact Trymore Estates.