Whatshot
Property Talk
Property Talk
Date: 2016-10-28
The Sectional Titles Schemes Management Act 8 of 2011 ("STSMA") and the Community Schemes Ombud Service Act 9 of 2011 ("CSOSA"), is quite a mouthful but this legislation is now a reality and it is worth exploring the most important changes that have been introduced.
The STSMA has brand new Management and Conduct Rules, referred to as Annexure 1 Management Rules and Annexure 2 Conduct Rules. These rules will super cede any existing management or conduct rules in place for all schemes. Previously established rules within a scheme will still be enforceable as long as they are not in conflict with the STSMA Annexure 1 & 2 rules.
All body corporates and homeowner associations have 90 days in which to register with Community Schemes Ombud Service (CSOS). This is a four page registration form and requires the submission of a range of supporting documents such as rules, plans, constitution and Trustees IDs. All community schemes (including HOA's and Share Block Companies) are required to make a contribution to the CSOS on a quarterly basis. The size of these contributions are worked on a sliding scale up to a maximum of R40 per unit per month.
The STSMA Regulations require the Body Corporate to draw up a 10 year maintenance plan that includes everything that is included in the structure of the building such as lifts, roofs, wiring, piping, painting etc. The detail of these plans require information on each item, its age and current condition, the anticipated maintenance cost per annum and eventual replacement cost.
One of the most important aspects of the new legislation requires that a Body Corporate have a minimum of 25% of the previous years' levy income in the reserve account. If they have less than 25% they must raise 15% of the previous year's levy income. This reserve may only be used for emergency maintenance and then the Body Corporate must immediately recover what has been used to replenish the fund.
Other important new regulations are that no person may hold more than two proxies. With a typical Chairman now no longer being permitted to hold more than two proxies this will require far wider participation of owners in meetings.
For further information and an interactive analysis of this article follow my blog: andreaswassenaar.blogspot.com.