The Sectional Titles Schemes Management Act (STSMA) and the Community Services Ombuds Service Act (CSOSA) was promulgated on the 7th of October 2016.
Sectional Title Schemes Management (STSMA) deals with the operational requirements around the management of Body Corporate schemes, while the CSOSA will assist with any disputes which may arise.
The Community Schemes Ombud Service (CSOS) functions include the vetting of conduct and management rules, resolving of community scheme disputes and educating members of Sectional Title Schemes, Home Owners’ Associations and other forms of community schemes.
Community schemes include Sectional Title Complexes, Homeowners’ Associations, Shareblock Developments, and Retirement Villages, Gated Estates with constitutions and social co-operatives, which now fall under Section 1 of the Community Schemes Ombud Service (CSOS).
There are certain key changes, that bodies corporate should have no problems with, in the new ways of managing their scheme.
- Establishment of a reserve fund – the aim of the fund is to cover costs of future maintenance and repairs to the common property. The amount suggested and required by each sectional title scheme to be set aside is 25% of the budgeted annual levy figure.
- Notification the Ombud of a domicile – the chief Ombud, local municipality and local registrar of deeds need to have the domicile registered to serve notices accordingly.
- The assistance of recovering arrear levies – the Ombud can help when Trustees find it challenging to recover arrear levy contributions.
- Additional levy – the Ombud’s offices require an additional levy which each owner is liable to pay in order for the CSOS to properly serve the sectional title community. The regulated amount is the lesser of R40.000 or 2% of levies in excess of R500.00
- Proxies – there is a limit to the amount of proxies held per person and may not hold more than 2 proxies.
- Conduct Rules – the chief Ombud must approve the rules and a certificate will be issued accordingly. Rules must be made available at meetings and given to new owners and residents.
- Annual Audited Financials – all complexes need to file their audited financials and budget with the Ombuds offices.
- Insurance – Insurance cover in sectional title schemes is not an option it is a requirement by the Sectional Titles Act and Body Corporate’s need to review their all-risk insurance policy every three years. This includes buildings, public liability, fidelity cover and special risks insurance. Owners may take out additional insurance for their unit in addition to the complex all-risk policy. Insured values on sectional title schemes should be updated regularly to be sure that the insurance policy keeps up to date with the market-related replacement value.
https://www.gov.za/documents/sectional-titles-schemes-management-act