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Christo Smith Law Blog

Sectional & Schemes Acts bring radical change

The sectional title and community scheme landscape has been drastically reshaped by new legislation.  The Sectional Titles Schemes Management Act 8 of 2011 and the Community Schemes Ombud Service Act 9 of 2011 came into effect on 7th October 2016.

Trustees, attorneys and estate agents must know the critical aspects of the legislation, firstly to ensure compliance and secondly to avoid being held liable for negligence by sellers and purchasers when marketing property.

The most important innovations brought about by these Acts, together with their respective regulations, are the following :

  • Registration of schemes with the Ombud Service (30 days);
  • Monthly levies to be paid to the Ombud by every unit (90 days);
  • Annual returns to be filed by every scheme;
  • Prescribed management and conduct rules;
  • Specified amounts to be held in reserve funds;
  • Audited financial statements;
  • Maintenance plan drawn and lodged annually;
  • Dispute resolution procedures;
  • Voting rights and resolutions;
  • Duties and liability of managing agents;
  • Fidelity insurance;
  • Clearance certificates;
  • Penalties and interest.

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Sectional & Schemes Acts bring radical change