New Sectional Title Act Explained

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16 Oct 2012

In mid-2011 it was announced that two new Acts affecting Sectional Title and Community Schemes in South Africa had been signed by the President and were expected to become operational by the end of the same year. 

“The first is the Sectional Titles Schemes Management Act, and although the application of this Act is yet to be tested, the Sectional Titles Schemes Management Act will seek to assist bodies corporate to manage and regulate sectional title schemes and to establish a sectional title schemes management advisory council."

However, the end of 2012 is in site and these two Acts still remain non-operational.  Martin Bester, Managing Director of Intersect Sectional Title Services offers a synopsis on what these two Acts are about and, once operational, what they will mean for Sectional Title and Community Schemes. 

“The first is the Sectional Titles Schemes Management Act, and although the application of this Act is yet to be tested, the Sectional Titles Schemes Management Act will seek to assist bodies corporate to manage and regulate sectional title schemes and to establish a sectional title schemes management advisory council."  

According to Bester, who sits on the board of the Residential and Sectional Title Committee of SAPOA and is a committee member of the Sectional Title Regulations Board, the Sectional Titles Schemes Management Advisory Council will be tasked with making recommendations and advising the Minister on the provisions of the act, as well as keeping the implementation of the Act and the regulations under regular review. 

“The second Act, the Community Schemes Ombud Services Act, aims to provide for the establishment of the Community Schemes Ombud Service and a dispute resolution mechanism in community schemes.” 

An important aspect is to note that all current rules are to be filed with Ombudsman’s office, once they are created, and any and all changes to rules going forward must be approved by the Ombud, says Bester. 

“Pertinent changes that one can expect with the operation of these acts are, inter alia, the determination and application of special and unanimous resolutions; voting procedures; notices; validation of proxies; insurance and the application of levies.” 

He says the Sectional Titles Schemes Management Advisory Council will consist of not more than seven but not less than five members, of whom one must be the Chief Ombud, one must be a senior official of the Department, designated by the Director-General and the remainder must be persons appointed by the Minister who must have skills, knowledge and experience in the management of a range of different types of schemes. 

“The Community Schemes Ombud Service must develop and provide a dispute resolution service; provide training for conciliators and adjudicators; regulate, monitor and control the quality of all sectional titles scheme governance documentation and take custody of, preserve and provide public access to sectional title scheme governance documentation.” 

“The industry has long talked of the need for an Ombud service, and hopefully soon we will have one. It will be interesting to see how it affects the industry and, once tested, how effective these Acts will be,” says Bester. 

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