Understanding the Sectional Titles Schemes Management Act: Key Responsibilities for Trustees and Owners

Understanding the Sectional Titles Schemes Management Act: Key Responsibilities for Trustees and Owners

The Sectional Titles Schemes Management Act (STSMA), promulgated in 2011 and operational since 2016, is pivotal in governing the management and administration of sectional title schemes in South Africa. This legislation seeks to provide a robust framework to ensure that schemes are run efficiently, transparently, and in compliance with legal requirements. Understanding the key responsibilities for trustees and owners outlined in the STSMA is essential for fostering harmonious living and maintaining the integrity of the scheme.

Responsibilities of Trustees

Trustees play a critical role in managing sectional title schemes, and their responsibilities are codified in the STSMA and the prescribed Management Rules. Below are their primary obligations:

1. Fiduciary Duty

Trustees must act in good faith, with care, and diligence, and in the best interests of the body corporate. They are prohibited from receiving personal benefits at the expense of the body corporate.

2. Financial Management

Trustees are responsible for preparing and managing the scheme’s budget. This includes:

- Preparing an annual budget.

- Ensuring sufficient funds are available to meet operational expenses.

- Maintaining a reserve fund as per prescribed minimum requirements.

3. Maintenance and Repairs

Trustees must ensure that common property is properly maintained. This includes:

- Conducting regular inspections.

- Addressing maintenance issues promptly.

- Developing a maintenance plan that outlines scheduled tasks and associated costs.

4. Enforcement of Rules

Trustees must enforce the conduct and management rules of the scheme. This includes addressing breaches by owners or residents and ensuring compliance with decisions taken at general meetings.

5. Meetings and Record-Keeping

Trustees are required to:

- Convene Annual General Meetings (AGMs) and Special General Meetings (SGMs) as needed.

- Keep accurate minutes of meetings.

- Maintain proper records of the body corporate’s financial transactions and activities.

6. Insurance

Trustees must ensure the scheme is adequately insured. This includes:

- Building insurance to cover common property and structures.

- Liability insurance for claims against the body corporate.

7. Dispute Resolution

Trustees should promote peaceful resolutions to disputes and may refer unresolved matters to the Community Schemes Ombud Service (CSOS).

Responsibilities of Owners

While trustees oversee the scheme’s management, owners also have critical responsibilities to ensure the smooth operation of the sectional title scheme. These include:

1. Payment of Levies

Owners must pay levies promptly. These funds are essential for covering the body corporate’s operational expenses and maintaining the reserve fund.

2. Adherence to Rules

Owners are required to comply with the conduct and management rules of the scheme. These rules govern:

- The use of common property.

- Noise levels.

- Parking regulations.

3. Participation in Meetings

Owners should actively participate in AGMs and SGMs to:

- Vote on important decisions.

- Raise concerns or suggestions for improvement.

4. Maintenance of Sections

Owners are responsible for maintaining their individual units, ensuring they are in good condition and do not pose a risk to the scheme’s overall infrastructure.

5. Dispute Resolution

Owners should engage constructively in resolving disputes and adhere to resolutions passed by the body corporate or rulings from CSOS.

6. Notification of Changes

Owners must inform the body corporate of any significant changes, such as:

- Selling or leasing their unit.

- Contact detail updates.

Both trustees and owners must work together to ensure the scheme operates smoothly. This collaborative effort involves:

Transparency: Trustees should provide regular updates on the scheme’s financial and operational status.

Engagement: Owners should remain informed and participate actively in the decision-making processes.

Accountability: Trustees and owners alike must adhere to the rules and resolutions of the body corporate.

Conclusion

The STSMA serves as a comprehensive guide for managing sectional title schemes, clearly delineating the responsibilities of trustees and owners. By understanding and fulfilling these responsibilities, trustees can effectively manage the scheme, and owners can contribute to a harmonious and well-maintained community. When both parties collaborate and adhere to the Act, sectional title schemes can thrive as equitable and sustainable living environments.