10 Oct

Sectional Title Schemes Management Act 2011

Some of you may know that new legislation regarding Sectional Titles has been on the cards for a while.  We can now advise you that the new Sectional Title Schemes Management Act (STSMA) 2011 came into operation on 7 October 2016.  Basically, this Act takes all the management, governance and rules provisions out of the old Sectional Titles Act, 1986 and paraphrases most of the current management practice in a short new Act of twenty sections.  Trustees and Sectional Title administrators should note that the Regulations to the Act provide for a mandatory Maintenance plan and compulsory reserve fund and they will have to analyse the new act and its regulations, which are not identical to the previous 1986 Act. For most of our clients, the new STSM Act does not make many fundamental changes to how a sectional titles scheme is run.  The previous 1986 Act continues to deal with mainly the conveyancing side of Sectional Titles.

The STSMA has come into being parallel with another piece of legislation, creating a so-called third generation system of law governing not only Sectional Title schemes but also other community schemes like Home Owners Associations. This legislation is called the Community Schemes Ombud Service Act, 2011 which also came into operation on 7 October 2016 and creates the office of an Ombud to deal with community scheme dispute resolution, amongst other things. See our website for further information. Until now, members of Sectional Title schemes had to use the rather clunky Arbitration provisions of Rule 71, or approach the High Court to resolve disputes. This is inherently expensive. It is hoped that the Ombud service will afford sectional title owners affordable justice. Relatively small fees are payable to apply to the Ombud and conciliation is the preferred method of resolution before the Ombud has to adjudicate on a matter.

As with all new legislation, Sectional Title practitioners will have to get use to these two new Acts.

AJ Murray
Miltons Matsemela Inc.
October 2016