Whatshot
The nuts and bolts of new sectional title legislation
The nuts and bolts of new sectional title legislation
Date: 2016-11-18
One of the new stipulations of the Sectional Titles Schemes Management Act is that schemes are now required to have a reserve fund, implied by the regulations to be maintained equal to 25% of the scheme's total annual levy budget.
Although the amendment to the Sectional Titles Schemes Management Act was signed into law this month, it was approved way back in 2011, and efficient, well-established bodies corporate will have taken advantage of the five-year gap to get ahead and begin accumulating the necessary surplus.
The aim of this portion of the legislation amendment is to ensure schemes create "rainy day" funds and shield homeowners from the special levies that bodies corporate demand from time to time when major repairs or refurbishments take place.
Once-off special levies are usually hefty, and aren't in most cash-strapped homeowners' budgets, often plunging households into debt to service them.
So whilst increases may be unavoidable for many schemes, the trustees cannot just increase the levies arbitrarily. Home owners are not entirely powerless here; they do have a voice.