Ms Lindiwe Nonceba Sisulu, the Minister of Human Settlements, announced an Act on Sectional Titles in the Government Gazette of 7 October 2016. This Act extends the Sectional Titles Schemes Management regulations to include other housing schemes as well. Bodies Corporate now have various legal requirements to comply with and owners are urged to familiarize themselves with the contents of this Act to avoid unpleasant surprises.

All body corporates and housing schemes must be registered with the Community Schemes Ombud Services (CSOS) since 7 October 2016. Initially, it was financed solely by the government, but housing schemes are now required to make a contribution as well in the form of a CSOS-levy. The levy is calculated on the administrative levy – which will also be explained – namely 2% of the monthly levy more than R500 per month with a maximum of R40 per month per unit.
It is now compulsory to have a Reserve for Administration. In the past, it was good practice to have a reserve of at least one month’s expenses. However, it is now legislation to have a minimum of 25% of the annual budget in reserve; thus, expenses for approximately three months.
Furthermore, it is now also necessary to maintain a separate reserve – namely a Maintenance Reserve – for the upkeep of the complex and replacing capital items when they are outdated. This fund must be invested in a separate interest bearing deposit account. When this investment is used, it must be replaced as soon as possible.
Additionally, Bodies Corporate are also required to report half yearly to the Ombud’s offices, report annually to the Ombuds with copies of Audited annual returns, report quarterly to owners on stance of finances, maintenance of complex, and outstanding levies and to manage agents to inspect premises quarterly and report to Trustees.
Moreover, the insurance of the complex is to be more comprehensive and to make provision for, amongst other, landslides and similar natural mischances, Trustees and employees, Managing Agent indemnity insurance (if they do not have their own insurance) and the valuation of the complex every three years by a qualified and reputable valuator.
Finally, it is important to note that the requirements in respect of the procedure at Annual General Meetings (AGM), proxies and voting procedures have changed and that each Body Corporate with more than 4 units is to appoint an independent Registered Auditor.
The professionals at LNP Properties in association with Lessing & Prinsloo Auditors/ Accountants are qualified and trained to manage a complex successfully and have done so in the past! They make use of modern Accounting computer software to maintain secure record keeping and with this experience and training can report monthly and annually according to general accepted accounting standards.
LNP Properties understand the concept of making the required provisions –something that the novice might find demanding to understand. We can thus prepare Audit files for submission to the independent Auditor.
LNP Properties is also registered as Estate agents with the EAAB and report annually to this office, as required. They are able to handle most of the legal problems themselves, have access to a large pool of knowledge and experience through reputable firms of attorneys and nationally to a club offering assistance in case of need.
Regarding the day to day management they have an array of contractors who can do the technical work to maintain the complexes at affordable prices at a good standard. In practice they have superior qualifications/experience as we own several buildings (units) and work closely with developers to ensure compliance to all necessary legislation.
Therefore, to avoid any non-compliance with new and existing legislation, contact LNP Properties for comprehensive and professional services to Bodies Corporate and owners.
LNP Properties CC
lnp@a\lantic.net,
016 976 0793
Sasolburg