Update on the third generation sectional title legislation – Carryn Durham of Paddocks

There has been lots of confusion regarding the third generation sectional titles legislation.

Some of the questions I am often asked are:

  1. 1.    Are the new Acts in operation?
  2. 2.    What aspects of sectional title will these new Acts deal with?
  3. 3.    What new features will these Acts introduce?

Both the Sectional Titles Schemes Management Act 8 of 2011 (STSMA) and the Community Schemes Ombud Service Act 9 of 2011 (CSOSA) have been signed into law by the State President, but neither Act is yet in operation. These Acts will come into operation only once the Regulations, made under these Acts, have been enacted, and on a date to be determined by the President by proclamation in the Government Gazette. Mr Themba Mthethwa, who has been appointed as the Chief Ombud, has specifically stated that it is his intention to get both Acts operational this year, 2015.

The scheme management provisions contained in the Sectional Titles Act 95 of 1986 (STA) have been re-assembled in the STSMA, while leaving the technical registration and survey provisions in the STA. An interesting development in the STSMA is that the body corporate must establish and maintain a reserve fund in such amounts as are reasonably sufficient to cover the cost of future maintenance and repair of common property but not less than such amounts as may be prescribed by the Minister of Human Settlements. It is not yet certain how the reserve amounts will be established as the Regulations to the STSMA have not been finalised. We hope that the formula will strike a balance between too onerous a requirement on the bodies corporate, and being sufficient for the purpose. Another significant development is that a person may not act as proxy for more than two members.

One of the main features of the CSOSA is the establishment of an Ombud Service. The functions of the Ombud Service are set out in section 4 of the CSOSA and include establishing and maintaining a dispute resolution service, training stakeholders and checking, holding and providing access to scheme governance documentation. In doing so, the Ombud Service will promote good governance of community schemes. A significant effect of the CSOSA will be the improvement of scheme rules. Currently the Registrar of the Deeds Office are not involved in the enforcement or application of scheme rules. The Registrar does not check the rules when they are filed. The Ombud Service will make sure that rules comply with the requirements of the STSMA and that they be reasonable and apply equally to owners of sections put to the same use.

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