Sectional Title schemes: How the management has changed

The new Sectional Title Schemes Management Act No. 8 of 2011 (the “STSMA”) came into operation on 7 October 2016. This Act, in essence, has taken all the management, governance and rules as provided in the Sectional Titles Act No. 95 of 1986, as amended from time to time (the “STA”), and codified the current management practice holistically into this new Act. This new Act contains 20 sections.

Due to the sensitive nature of the differences and disputes that often arise in sectional title schemes and/or its body corporate, it is important that any dispute is well regulated, especially in cases where amicable resolutions have either failed, or is impossible. Previous legislation and practice management rules are fairly complex and difficult to understand, which made it difficult for owners and trustees to fully understand all rights and responsibilities involved in the management of a sectional title scheme. Moreover, due to the increasing number of homeowners associations and sectional title schemes and other community housing developments, more “user friendly” legislation was sorely needed. The new Act have been welcomed by many industry experts thus far as a long overdue addition.

Body Corporates, Trustees, owners and Sectional Title administrators should note that the Regulations to the STSMA provide for a mandatory maintenance plan and maintaining a compulsory reserve fund. The STSMA must be analysed critically and practically implemented in the management of sectional title schemes, if not done already. These areas have changed from the provisions in the STA to those of the STSMA. However, for many trustees, owners and schemes, the STSMA does not make many fundamental changes to how a sectional title scheme is run. The previous Act continues to deal with all aspects related to the transfer of ownership in Sectional Titles Schemes.