• We arrange bank finance for residential property buyers
    We also run online bond qualification tests

  • We arrange bank finance for commercial property buyers
    We also pre-qualify prospective buyers

Amendments to regulations of the sectional titles act

Posted by: | Posted on: Dec 23, 2016

Amendments to regulations of the sectional titles act

1. Amendments to regulations of the sectional titles schemes management act of 2011, as published on 7 October 2016.

Judicial hammer

Judicial hammer

Table of contents covered in the act:

SCHEDULE

ARRANGEMENT OF SECTIONAL TITLES SCHEMES MANAGEMENT REGULATIONS

1. Definitions
2. Minimum amounts for reserve funds
3. Other risks to be insured against
4. Powers of a provisional curator ad litem and curator ad litem
5. Notifications
6. Rules
7. Broadly representative nature of Advisory Council
8. Short title and effective date

Annexure 1
Management rules

Annexure 2
Conduct rules

Annexure 3
Forms
Form A
Notification of change of body corporate address
Form B
Notification of amendment of rules
Form C
Notification, appointment of proxy and acceptance of mandate

Annexure 4
Complaint form

We are not going to repeat the whole act here, but rather make it available for download to persons, like body corporate members, sectional titles developers, sectional titles owners, sectional titles investors, sectional titles agents and sectional titles tenants, interested enough in the subject and the four different forms to be used by body corporates.

1.1 Download the complete act by clicking the image below:

Sectional titles act in PDF

Sectional titles act in PDF

1.2 Download the complete act of 1986, updated with all the amendments from 1986 to 30 July 2015 by clicking here.

2. Amendments to regulations of the community schemes ombud service act, 2011 (ACT NO. 9 of 2011), as published on 7 October 2016.

Table of contents covered in the act:

SCHEDULE
ARRANGEMENT OF REGULATIONS

CHAPTER 1
INTERPRETATION
1. Definitions

CHAPTER 2
ACTIVITIES OF BOARD
Board activities
2. Meetings of Board
3. Notices
4. Quorum
5. Adjournment of meetings
6. Presiding officer
7. Procedure and making of decisions
8. Minutes
9. Written resolutions
10. Execution of documents and validity of actions

CHAPTER 3
LEVIES AND SERVICE FEES
11. Amounts of levies payable
12. Service fees and costs
13. Interest on overdue amounts

CHAPTER 4
PROMOTION OF GOOD GOVERNANCE, TRAINING AND EDUCATION
14. Duties of scheme executives
15. Fidelity insurance
16. Quality and form of governance documentation
17. Training

CHAPTER 5
ANNUAL RETURNS, CERTIFICATES AND FORMS
18. Scheme governance documentation and information
19. Dispute resolution
20. Legal representation
21. Appeal against the decision of the Adjudicator
22. Power to enter and inspect
23. Short title

Annexures
1. Form CS 1 – Registration of Community Schemes
2. Form CS 1A — Notice of amendment of particulars
3. Form CS 2 – Submission of Annual Return

 2.1 Download the complete act by clicking the image below:

Community schemes ombud service actCommunity schemes ombud service act

All types of housing schemes like a body corporate, a home-owner’s association and the like, which charge some or other levy to unit owners, must comply to the above two acts and make use of the prescribed forms, from early on in January 2017.

3. First things to do by a body corporate in January 2017:

First things to do by all existing body corporates and all newly established body corporates and homeowners associations in the future.

“The Sectional Title Industry should by now all have had sight of the recent Circular addressed by CSOS to NAMA dealing with the Community Schemes Ombud Service Act (CSOSA), the Sectional Titles Schemes Management Act (STSMA) and the Regulations pursuant thereto. This article summarizes the requirements of the next 90 days.

Requirement 1 – Register the community scheme with CSOS. The obligation becomes effective 30 days from publication of the Regulations (the envisaged date of publication being 7 October 2016). This is detailed in regulation 18(3) of the CSOSA Regulations. This applies to all community schemes such as, but not limited to, a sectional title scheme, a share block company, a home or property owner’s association. The required form CS1 is attached to the Regulations.

Requirement 2 – Lodge the community schemes governance documentation with CSOS. The obligation becomes effective 90 days from publication of the Regulations (the envisaged date of publication being 7 October 2016). This is detailed in Regulation 16 of the CSOSA Regulations. This applies to all community schemes such as, but not limited to, a sectional title scheme, a share block company, a home or property owner’s association. There is no prescribed form.

Requirement 3 – File the community scheme’s annual return and annual financial statements within 4 months of the scheme’s financial year end with CSOS. The obligation becomes effective 90 days from publication of the Regulations (the envisaged date of publication being 7 October 2016). This is detailed in regulation 18(1) of the CSOSA Regulations. This applies to all community schemes, such as, but not limited to, a sectional title scheme, a share block company, a home or property owner’s association. The required form CS2 is attached to the Regulations.

Requirement 4 – Pay CSOS on a quarterly basis the CSOS levy (fee). The obligation becomes effective 90 days from publication of the Regulations (the envisaged date of publication being 7October 2016). This is detailed in regulation 11 of the CSOSA Regulations and in the CSOS Fee and Levy Collections Regulations. This applies to all community schemes, such as, but not limited to, a sectional title scheme, a share block company, a home or property owner’s association. There is no prescribed form.

Requirement 5 – Insure against risk of loss against any act of fraud or dishonesty committed by an insurable person. The obligation becomes effective on publication of the Regulations (the envisaged date of publication being 7 October 2016). This is detailed in regulation 15 of the CSOSA Regulations. This applies to all community schemes, such as, but not limited to, a sectional title scheme, a share block company, a home or property owner’s association. There is no prescribed form.

Requirement 6 – Notify CSOS, the Local Municipality and the Local Registrar of Deeds of the community Scheme’s domicilium. The obligation becomes effective on publication of the Regulations (the envisaged date of publication being 7 October 2016). This is detailed in section 3(1)(o) of the STSMA. This applies to sectional title schemes only. The required form A is attached to the Regulations.

Requirement 7 – Establish a reserve fund, open a separate bank account for, submit a separate budget for and submit separate financial statements for, the reserve fund. The obligation becomes effective on publication of the Regulations (the envisaged date of publication being 7October 2016). This is detailed in Section 3 (1)(b) of the STSMA, new Prescribed Management Rule 24 and in various other of the new Prescribed Management Rules. This applies to sectional title schemes only. There is no prescribed form.

Requirement 8 – Prepare a written maintenance plan. The obligation becomes effective on publication of the Regulations (the envisaged date of publication being 7 October 2016). This is detailed in new Prescribed Management Rule 22. This applies to sectional title schemes only. There is no prescribed form.”

Source: Article by ALAN LEVY, October 2016, Alan Levy Attorneys, Notaries & Conveyancers.

4. 12 things to know about the new Sectional Title legislation

The legislation governing the Sectional Title industry has recently been updated.

Parts of the old Sectional Title Act 95 of 1986 are still in force, but two new acts were promulgated on 7 October this year – namely the Sectional Title Schemes Management Act (STSMA) and the Community Services Ombud Service Act (CSOSA).

The STSMA will deal with the operational requirements around the management of Body Corporate schemes, while the CSOSA will assist with any disputes which may arise. The CSOS (the Ombud offices) will also act in a compliance capacity for other communal residential complexes, such as security estates (where a Home Owners Association manages the complex), retirement villages and share block schemes.

Below is an outline of what this new legislation means for you, whether you own a sectional title unit or a property in an estate/complex (governed by a Home Owners Association):

1. Registration of the complex:
Body Corporates and Home Owners Associations need to register the complex with the Ombud’s offices. They also need to ensure that all complex management and conduct rules, together with any changes which have historically been made to these rules, are filed with the Ombud.

In addition, complexes need to provide their domicilium address to the Ombud, the local municipality and local registrar of deeds so that in the event of cases being brought against a Body Corporate or Home Owners Association, there is one address at which to serve notices.

2. Assistance with conduct rules:
The office of the Ombud must approve and certify all Body Corporate rules which have been substituted, added or changed.

3. Annual audited financials:
All complexes need to file their audited financials with the Ombud’s offices together with their budget for the following year.
The following rule changes apply only to sectional title units:

4. Reserve Fund:
Body Corporates are now required by law to establish a reserve fund to cover the cost of future maintenance and repairs to common property. The suggested amount for the reserve fund is 25% of the annual levy. So, for example, if the levies total R 150 000 for the year, then the additional reserve amount to be collected from owners would be R 37 500.

5. Decisions require special resolutions:
In future, a Body Corporate will need a special resolution to make decisions such as the purchase, transfer, sale or letting of units. In cases where a special or unanimous resolution can’t be reached, the chief Ombud can be approached to provide assistance.

6. Assistance in recovering arrear levies:
Body Corporates can now request assistance from the regional Ombud where trustees are struggling to recover payments from Sectional Title owners.

7. Additional levy to fund the Ombud’s offices:
In order to properly serve the sectional title community, the Ombud’s offices will be funded with an additional levy which each owner will have to pay. The regulated amount is the lesser of R40.00 or 2% of levies in excess of R500.00.

8. Limited proxies:
No more multiple proxies per person. This new legislation limits the number of proxies held by a single Body Corporate member, to two.

9. Counting of votes:
The way in which votes are counted at meetings has now been amended. Quorums and resolutions are now reached by counting the percentages required by number and value and each owner gets to vote only once in order to reach the required number as opposed to having multiple votes if more units are owned.

10. Building extensions in sectional complexes:
Developers, who still own a unit and/or Body Corporates (where the developer has sold all the units) could request that the Ombud allow an extension to their right to build on in the complex. This was previously not allowed.

11. Insurance:
All Body Corporates now need to review their all-risk insurance policy every three years. Moreover, sectional title owners may now take out additional insurance for their unit, in addition to the complex all-risk policy.

12. New complexes:
In order to register a new sectional title development, a certificate must be obtained from the Ombud’s office in which the Ombud confirms that the new complex is registered with the Ombud and that changes to the standard management and conduct rules are reasonable and acceptable.

In order to be compliant with the above changes, your Body Corporate needs to register the scheme with the CSOSA (Community Schemes Ombud Service with web site: http://www.csos.org.za/) within 30 days after 7 October and submit the scheme’s governance documentation to the Ombud Service within 90 days.

This new legislation aims to improve and streamline the governance of your Body Corporate. A positive move forward for trustees, owners and tenants alike.

Source: By Pam Golding, http://www.pamgolding.co.za/property-advice, 31 October 2016

All the relevant Acts can also be downloaded on this page: http://www.csos.org.za/legislation.html

All the required forms can be downloaded on this page: http://www.csos.org.za/communityschemesgovernanceforms.html

All the dispute forms and the application for condonation for late submission, can be downloaded on this page: http://www.csos.org.za/applicationform.html

5. Body Corporate ten year maintenance plan for South Africa:

A further requirement of the new Act is to calculate the reserve amount required for the administrative budget. This calculation is determined by way of three methods. See page 4 of the Act:

“2. For the purposes of section 3(1)(b) of the Act, the minimum amount of the annual contribution to a reserve fund for a financial year being budgeted for, other than the financial year being budgeted for at the first general meeting referred to in section 2(8) of the Act, must be determined as follows:
(a) If the amount of money in the reserve fund at the end of the previous financial year is less than 25 per cent of the total contributions to the administrative fund for that previous financial year, the budgeted contribution to the reserve fund must be at least 15% of the total budgeted contribution to the administrative fund.

(b) If the amount of money in the reserve fund at the end of the previous financial year is equal to or greater than 100 per cent of the total contributions to the administrative fund for that previous financial year, there is no minimum contribution to the reserve fund; and

(c) If the amount of money in the reserve fund at the end of the previous financial year is more than 25 per cent but less than 100 per cent of the total contributions to the administrative fund for that previous financial year, the budgeted contribution to the reserve fund must be at least the amount budgeted to be spent from the administrative fund on repairs and maintenance to the common property in the financial year being budgeted for.”

In the past, many bodies corporate didn’t make sufficient provision – or any provision at all – in a reserve fund for major, planned maintenance needs. The underlying purpose of the new Act is to force community schemes to save on an on-going basis so the financial impact on owners is not as devastating as it is in the case of special levies.

See rule 22 of the Act, page 37:

“Maintenance, repair and replacement plan
22.
(1) A body corporate or trustees must prepare a written maintenance, repair and replacement plan for the common property, setting out—
(a) the major capital items expected to require maintenance, repair and replacement within the next 10 years;
(b) the present condition or state of repair of those items;
(c) the time when those items or components of those items will need to be maintained, repaired or replaced;
(d) the estimated cost of the maintenance, repair and replacement of those items or components;
(e) the expected life of those items or components once maintained, repaired or replaced; and
(f) any other information the body corporate considers relevant.

(2) The annual contribution to the reserve fund for the maintenance, repair or replacement of each of the major capital items must be determined according to the following formula: [(estimated cost minus past contribution) divided by expected life].
(3) A maintenance, repair and replacement plan takes effect on its approval by the members in general meeting; provided that on approval of such a plan, members may lay down conditions for the payment of money from the reserve fund.

(4) The trustees must report the extent to which the approved maintenance, repair and replacement plan has been implemented to each annual general meeting.”

The differentiating figure to decide what must be regarded as Small repairs and replacements versus Major repairs and replacements is an arbitrary figure. The lower the differentiating figure, the more items and amounts will shift over to the ten year maintenance plan.

The purpose with the reserve fund: The sole purpose with the reserve fund is to provide for all unforeseen and unexpected expenses, not budgeted for and not covered by levies, whether it is administrative or maintenance. It must also be used to pay for the major items in the ten year plan.

The reserve fund budget must be calculated on the Administrative Fund total budget only.  Furthermore, the ten year plan is not part of the budget.

Ten year maintenance plans for residential complexes countrywide in South Africa. We provide ten year maintenance plans for Community Scheme Managements like Sectional Title, Full Title, Share Block, Time Share, Homeowners Association and Retirement Villages.

To make it easy for a Community Scheme Management, we provide a questionnaire, lower down, to be completed and take it from there to completion. We also provide the same service to Managing Agents of complexes. Here are four helpful documents, which can be downloaded:

1. Download our ten year maintenance plan brochure, by clicking the PDF icon image below:

Click me pdf icon

2. Download this handy, quick-read brief summary of the Sectional Title Act, authored by an expert, by clicking the moving judge image below:

 

Moving animated judge gif image

 

3. We are rendering this service countrywide in South Africa. We have a questionnaire which must be completed and returned to us, to enable us to start with drawing up the ten year plan. The questionnaire is in PDF format and can be downloaded by clicking this image.

The questionnaire consists of the following:
Part 1 – The information needed to start the process of compiling a ten year maintenance plan.
Part 2 – Our quotation cost structure based on quantity of units in the complex.
Part 3 – Our ten year maintenance plan training guide introduction.

 

Ten year maintenance plan questionnaire in PDF format icon

It can also be downloaded as a Microsoft Word.docx questionnaire by clicking here.

4. A body corporate ten year maintenance plan example for South Africa, as adapted from a New Zealand source, by clicking here for the PDF format. Click here for the Word.docx format.

5. Our ten year maintenance plan training guide. If you have ample knowledge internally, you can buy our short training manual, explaining all the ins and outs, including lifespan guidelines, examples of how to use a spreadsheet calculation program and how to report everything to the Community Schemes Ombud Service (CSOS). Users of the maintenance plan services also get a free complimentary copy of the training guide illustrated below.

How to purchase:

Just click the image below and it will take you to the correct sales page.

 

Community management schemes ten year maintenance plan training guide for South Africa ecover

 

Table of contents for Community Schemes Ten year maintenance plan training guide (41 pages):

  1. Job skills requirements to become a provider of ten year maintenance plans
  2. Information needed to compile a ten year maintenance plan
  3. Compiling a ten year maintenance plan manually, without using a spreadsheet program
  4. Illustration of how to combine the Administration fund budget with the ten year Maintenance budget in a spreadsheet program
  5. Maintenance lifespan cycles and costs for community complexes
  6. Illustration of how to report to the Community Schemes Ombud Service (CSOS)
  7. Exceptional cases of adding a savings plan to the ten year maintenance plan
  8. The following assumptions are part and parcel of the sale of this guide
  9. Get a free spreadsheet program and save thousands
  10. Bonus: Where to get these eight training manuals for peanuts. Use them for internal training sessions of employees or to train yourself.
  11. Summary notes
  12. Last step of reporting
  13. The huge market potential for providers of ten year maintenance plans

Sectional Title ten year maintenance plan service provider:

We provide ten year maintenance plans for Community Scheme Managements like Sectional Title, Full Title, Share Block, Time Share, Homeowners Association, Retirement Villages and shopping complexes. We also provide the same service to Managing Agents of complexes.

Sectional title ten year maintenance plans service provider,Community schemes roadshow presentation 2017,Sectional titles schemes management regulations,Our ten year maintenance plan brochure,Handy quick-read summary of the Sectional Title Act authored by an expert,Our questionnaire to enable us to compile a ten year maintenance plan,The ten year maintenance plan training guide,Ten year maintenance plan questions.

This presentation slide above can also be downloaded in PDF format by clicking here. If you want to find this presentation again in the near future, it may be expedient and advisable to store this PDF file on your hard drive, where you can easily retrieve it again.

Shopping icon image

 

Busines card for Pierre Du Plessis

 

Slideshow of services offered (click the pause button when needed):

 

 

Law books footer

Law books footer





Comments are Closed