Sectional Title Schemes Management Act (STSM Act)(Act 8 of 2011) & Community Schemes Ombud Service Act (CSOS Act) (Act 9 of 2011)
Both these Acts were signed by the President in mid-2011, but 2012 has come and gone we are still awaiting them to become operational.
The STSM Act does not repeal the current Sectional Titles Act (Act 95 of 1986), but does repeal and amend some of its sections. The idea behind the STSM Act is to remove the management and regulation of sectional title schemes from the current Sectional Titles Act.
Some of the queries raised with regards to the STSM Act and the effect it will have when in operation includes (but is not limited to) the following:
• Does the repealing of Section 37(2) of the Sectional Titles Act and the enactment of section 3(2) of the STSM Act result in a Body Corporate referring all levy defaulters to the office of the Ombud to recover the arrear levies from the owner rather than Court? The general opinion is that the wording of the new Act stipulates that – “…and may be recovered by the body corporate by an application to an ombud…” The word “may” indicates that it is at the discretion of the Body Corporate whether they want to use the service of the Ombud or go to court in this matter
• How many proxies can one person hold at a General meeting? Under the current Sectional Titles Act there is no limitation on the number of proxies one person can hold at a general meeting, but in section 6(5) of the STSM Act the provision is made that a person must not act as a proxy for more than two members. But remember that the STSM is not in operation yet!
• Under the current Sectional Titles Act an owner has one vote for each section owned – in section 6(7) the votes will be limited – “When votes are calculated in number, each member has one vote”. This would mean that no matter how many sections you own you will only be entitled to one vote. When votes are calculated in value each member’s vote will be calculated by adding the participation quotas of all the sections registered in his/her name. Owners with multiple sections in a scheme should then be proactive and demand on voting to be done on poll every time.
The CSOS Act aims to provide for the establishment of the Community Schemes Ombud Service and a dispute resolution mechanism for all community schemes.
One of the functions of the Ombud Service will be to keep all rules of all schemes on file and going forward all rules and changes to rules will have to be approved by the Ombud.
So if you hear / read about these two new Acts remember that they are not in operation yet – they will only come into operation on a date fixed by the President by publication in the Government Gazette. And we will notify all our clients as soon as this happens.