March 2017 Seminars on Community Schemes

The burning issues

• Practice Directives have not been issued by the Ombud. We will monitor the situation and make an announcement on our website if and when it does happen. This applies equally to the application of the Acts to duet housing schemes.
• All sectional titles transfers require a clearance certificate signed by 2 trustees or the managing agent. Other schemes follow suit depending on their governance documentation.
• The Community Schemes Ombud Service Act applies to all schemes and provides mainly for a dispute resolution process (S 37-59). The administrative functions of bodies corporate have been removed from the Sectional Titles Act and incorporated in the new Sectional Titles Schemes Management Act.
• Bodies Corporate must budget for a separate reserve fund based on minimum prescribed amounts.
• The rules of sectional title schemes are prescribed. All existing rules have lapsed. Schemes with specific rules must urgently apply to the Ombud to incorporate such rules in their rules after adopting a resolution as prescribed.
• All schemes must register with the Ombud, file annual returns and pay the fees as prescribed.
• A “community scheme” includes any scheme that involves joint responsibility for land and/or buildings.
• Bodies Corporate may recover levies by application to the Ombud and his decision on that and any other issue can be made an order of the Magistertes Court or High Court.
• Levies may be recovered from tenants.
• Third parties with claims against bodies corporate may apply to court to recover debts from members.
• Members (sectional titles) have one vote when voting by number, however all ordinary resolutions are adopted by value; a person may not act as proxy for more than 2 members.
• The Acts provide for managing and executive managing agents, the latter who take over all responsibilities of trustees of a body corporate.
• Fidility insurance is required for all schemes. Only sectional title schemes are required to have public liability insurance and insurance for the replacement value of buildings.
• The STA now only deals with the execution of decisions of bodies corporate on the conveyancing level.