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The Complexities of Compliance in Community Scheme Management

Managing a sectional title development, homeowners association, or other community scheme is an exciting challenge that brings with it the opportunity to build strong, thriving communities. At Solver Property Services, we understand that while the operational, financial, and legal aspects are vital, the complexities of compliance play a crucial role in ensuring your community functions smoothly and meets all regulatory requirements. Rest assured, we are here to guide you through these complexities, ensuring your community remains compliant and well-supported.

In this article, we are excited to share some of the key compliance and secretarial requirements, giving owners a better insight into the important work happening behind the scenes to support their schemes.

Key Compliance and Secretarial Requirements

Managing a community scheme involves adhering to a range of regulatory, financial, and operational compliance standards. Here are some of the critical aspects to consider:

  • CSOS Obligations:
    Quarterly levies must be paid, and annual submissions are required to remain compliant with the Community Schemes Ombud Service (CSOS) Act.
  • Taxation:
    Appointing a Public Officer and submitting accurate annual tax returns to SARS ensures tax matters are handled professionally. Being registered with the South African Institute of Tax Professionals (SAIT) strengthens this expertise.
  • POPIA Compliance:
    A robust POPIA (Protection of Personal Information Act) policy, along with annual submissions, protects the personal data of all residents.
  • CIPC Compliance:
    In cases of Section 21 Homeowners Associations, it is vital to file annual returns and keep the register of directors updated to comply with the Companies and Intellectual Property Commission (CIPC).
  • Beneficial Ownership Records & Submissions:
    Similarly for Section 21 Homeowners Associations, these records need to be maintained and regularly updated through CIPC to meet legal requirements.
  • Secretarial Duties:
    Adhering to the Prescribed Management Rules, Memorandum of Incorporation (MOI) and/or associated Acts requires diligent record-keeping, accurate meeting minutes, and timely communication with members.
  • Anti-Money Laundering Obligations:
    As registered Financial Intelligence Centre (FIC) agents, it is essential to monitor and report any suspicious financial activities, ensuring the scheme operates within the bounds of the law. This is a legal requirement.
  • PPRA Certification:
    Ensuring that managing agents are registered and compliant with the Property Practitioners Regulatory Authority (PPRA) is non-negotiable. This certification is a legal requirement ensures adherence to ethical practices and proper conduct in managing community schemes.
  • Debt Recovery and Credit Control:
    Licensed debt collectors, such as those registered with the Council for Debt Collectors (CFDC), play a vital role in managing arrear levies and ensuring the financial health of the scheme. Only registered debt collectors and attorneys are allowed to peruse the recovery of outstanding levies.
  • Insurance and Risk Management:
    Professional Indemnity (PI) cover is a critical safeguard for community schemes. It protects scheme executives and members against potential claims arising from their decisions or actions.
  • Trustee Training and Qualifications:
    Staying informed about governance practices is key. Our team holds various qualifications specific to community schemes and provides free articles and trustee training for our clients, ensuring they are equipped to fulfil their responsibilities.
  • Maintenance and Operational Oversight:
    Compliance extends to maintaining the property in accordance with regulations, ensuring adequate reserves for long-term maintenance, and managing service providers effectively.

Why Choose Solver Property Services?

With over 20 years of industry experience, Solver Property Services is a trusted partner for community schemes throughout Gauteng and beyond. The Solver Group are fully certified and dedicated to providing a comprehensive, compliant, and client-focused service. Our certifications include:

  • Property Practitioners Regulatory Authority (PPRA) Licence & Fidelity Fund
  • National Association of Managing Agents (NAMA) Membership
  • Registration with the Financial Intelligence Centre (FIC)
  • Certification from the South African Institute of Tax Professionals (SAIT)
  • Licensing through the Council for Debt Collectors (CFDC)
  • Professional Indemnity (PI) Cover

These certifications, combined with our extensive expertise, demonstrate our unwavering commitment to compliance and excellence. We understand the challenges trustees and directors face, and we are here to offer practical solutions that enhance both the lifestyle and financial well-being of your community.

Partnering for Success

At Solver Property Services, we believe that a well-managed and compliant community scheme fosters harmony and creates a thriving environment for all residents. Our team is ready to support you, offering peace of mind and confidence that your scheme is in capable hands.

If you have any questions or need assistance with compliance matters, we would love to hear from you. Let’s work together to build stronger, more efficient communities.

Disclaimer: The information shared in this article is intended for general informational purposes only. It is not meant to be exhaustive, nor should it be construed as legal advice or a substitute for fulfilling the fiduciary duties of Community Schemes.

Solver Property Services is a trusted leader in property management across South Africa, with a proven track record of successfully managing community schemes since 2005. From high-rise sectional title buildings to Homeowners Associations, share blocks, and apartments, we’ve got it covered. For further information, don’t hesitate to reach out to us at 010 822 2882. Our experienced team of Property Managers and Managing Agents are here to support you.

sectional title maintenance

One of the most common questions in sectional title is also one of the most difficult to answer with a simple “yes” or “no”:

Who is responsible for paying when something needs to be repaired or replaced?

A leaking geyser. A cracked window. A burst pipe. Damp on an internal wall. A damaged balcony. A leaking roof. A blocked drain.

The answer is not always obvious.

In a sectional title scheme, understanding who is responsible for the maintenance, repair and replacement of a particular item requires looking at whether the item forms part of the owner’s section or the common property (as well as whether any exclusive-use rights or scheme rules affect the position).

This is why disputes about maintenance can become complicated. The person who discovers the problem is not necessarily the person who is responsible for fixing it or paying for it.

The starting point: section or common property?

The first question should always be:

Is the item part of the section or part of the common property?

The Sectional Titles Act provides the framework for dividing a development into individually owned sections together with jointly owned common property. The Sectional Titles Schemes Management Act 8 of 2011 (STSMA) then governs the management and financial administration of the scheme.

Broadly speaking:

  • Owners are generally responsible for maintaining their sections.
  • The body corporate is responsible for maintaining the common property.

The distinction can become more complicated where an item sits on or forms part of a boundary between a section and common property (or where an area is subject to exclusive-use rights).

This is why simply saying “it’s outside my unit, so the body corporate must pay” is not always correct.

What is common property?

Common property generally includes the parts of the scheme that do not form part of an individual section.

Depending on the scheme, this may include areas such as:

  • roofs
  • external walls
  • foundations
  • staircases
  • passages
  • driveways
  • communal gardens
  • communal facilities
  • certain plumbing and electrical infrastructure
  • structural elements of the building

The exact position should always be checked against the registered sectional plan, applicable rules and the circumstances of the particular repair.

The STSMA places an obligation on the body corporate to maintain the common property and keep it in a state of good and serviceable repair.

What is the owner normally responsible for?

An owner is generally responsible for maintaining and repairing their own section.

For example, this may include items that form part of the interior of the section and are not common property.

However, there are important exceptions and grey areas.

A good example is a window or door.

It is tempting to assume that because a window is physically inside or immediately adjacent to a section, the owner must automatically pay for it. However, the legal position depends on how the boundaries of the section are defined and how the particular element is treated under the sectional plan and applicable law.

This is why a proper assessment is often required before a repair responsibility is allocated.

A practical guide to common maintenance questions

The table below provides a useful, very basic, starting point. It is not a substitute for reviewing the sectional plan, rules and circumstances of the specific scheme.

Item / problem

Typical starting point

Important consideration

Roof

Body corporate

Generally common property and part of the body’s maintenance obligations

External walls

Body corporate

Structural/common-property responsibility generally rests with the body corporate

Foundations

Body corporate

Normally common property

Communal driveway

Body corporate

Generally common property

Communal garden

Body corporate

Subject to the scheme’s rules and any exclusive-use arrangements

Internal finishes

Owner

Generally part of the owner’s section

Internal plumbing

Owner or body corporate

Depends on where the pipe is located and whether it serves the section or common property

Main/common water pipe

Body corporate

Usually common-property infrastructure

Geyser

Depends

The position should be established from the sectional plan, rules and applicable legislation

Window

Depends

The boundary and legal classification must be considered

Garage door

Depends

The sectional plan and relevant boundaries are important

Balcony

Depends

A balcony may involve both section and common-property considerations

Exclusive-use garden

Depends

Exclusive use does not necessarily turn common property into privately owned property

Exclusive-use parking

Depends

Responsibility for costs can be affected by the nature of the exclusive-use right and the applicable rules

Common-property leak

Body corporate

The body corporate generally has responsibility for common property

Damage caused by a common-property defect

Depends

Responsibility for the underlying defect and resultant damage should be considered separately

That last point is particularly important.

The difference between the cause of the problem and the resulting damage

Consider this example:

A common-property pipe develops a leak and water enters an owner’s unit.

There are potentially two separate questions:

  1. Who is responsible for repairing the pipe?
  2. Who is responsible for repairing the damage caused by the water?

The answer to the first question does not automatically determine the answer to the second.

Insurance may also become relevant.

For this reason, owners and trustees should avoid immediately deciding who is liable based purely on where the water appeared.

Find the source first. Determine the responsibility second.

What about geysers?

Geysers are one of the most common sources of confusion in sectional title schemes.

An owner may reasonably assume that the geyser inside their unit is automatically their responsibility. A body corporate may have a different view depending on the scheme’s documentation and the location and classification of the installation.

The correct approach is not to rely on assumptions.

The scheme should consider:

  • the sectional plan
  • the position of the geyser
  • the pipework serving the geyser
  • the scheme’s rules
  • applicable legislation
  • the insurance policy
  • whether the issue relates to maintenance, replacement or resultant damage

A good managing agent should be able to help trustees identify the relevant documents and establish the appropriate process.

What about exclusive-use areas?

This is another area where owners frequently misunderstand the position.

An exclusive-use area is not necessarily privately owned property.

An owner may have the exclusive right to use a particular portion of common property (for example, a parking bay or garden), while the underlying property remains common property.

The STSMA specifically provides for additional contributions relating to certain exclusive-use areas to cover costs such as rates, insurance and maintenance (subject to the applicable rules).

This means that the question is not simply:

“Who uses the area?”

Instead, trustees should establish:

What is the legal status of the area and what does the legislation and scheme documentation say about responsibility for its maintenance and costs?

Who should appoint the contractor?

Another common problem occurs when an owner experiences an urgent maintenance issue and decides to appoint a contractor themselves.

That can create complications where the work relates to common property.

If an owner believes that the body corporate should be responsible for a repair, it is generally better to report the problem to the managing agent or trustees first, particularly where the work could involve significant expenditure.

This allows the body corporate to:

  • investigate the problem
  • establish responsibility
  • obtain appropriate quotations
  • consider insurance
  • approve the expenditure where required
  • appoint an appropriate contractor
  • keep proper records

There may obviously be situations involving genuine emergencies where immediate action is necessary to prevent further damage. Even then, the body corporate should be notified as soon as possible.

What happens when an owner fails to maintain their section?

The responsibility does not simply disappear because an owner does not attend to a problem.

The sectional title legislation and regulations provide mechanisms for dealing with failures to maintain sections and certain exclusive-use areas.

The regulations provide that where an owner fails to repair or maintain their section (or adequately maintain certain exclusive-use areas) and the failure continues after written notice, the body corporate may in appropriate circumstances remedy the failure and recover the reasonable cost from the owner.

This is an important protection for the wider community.

One owner’s failure to maintain their property can sometimes cause damage, inconvenience or expense for other owners.

What about insurance?

Maintenance responsibility and insurance responsibility are not necessarily the same thing.

A body corporate is required to insure the building in accordance with the STSMA and applicable regulations.

However, the existence of insurance does not mean every repair will automatically be covered.

When damage occurs, trustees should consider:

  • What caused the damage?
  • Is the affected property common property or part of a section?
  • Is the item insured?
  • What does the policy cover?
  • Is there an excess?
  • Was there a maintenance failure?
  • Is the repair preventative maintenance rather than insured damage?
  • Is there resultant damage that should be treated separately?

Insurance should therefore be considered alongside the maintenance responsibility rather than instead of it.

The maintenance plan matters

A financially healthy sectional title scheme should not be relying entirely on emergency decisions when major maintenance becomes necessary.

The STSMA requires a body corporate to establish and maintain a reserve fund that is reasonably sufficient for the future maintenance and repair of common property.

The regulations also provide for a maintenance, repair and replacement plan and reserve-fund budgeting.

This is where good sectional title management makes a significant difference.

A roof that needs replacing should ideally not come as a complete surprise.

A major waterproofing project should ideally be anticipated.

A body corporate should be able to look ahead and understand which significant components will require attention (and how those projects are likely to be funded).

So, who pays?

The short answer is:

It depends.

And that is precisely why maintenance disputes can become complicated.

Before deciding who must pay, a body corporate or owner should consider:

  1. Is the item part of the section or common property?
  2. What does the registered sectional plan show?
  3. Are there exclusive-use rights involved?
  4. What do the scheme’s management and conduct rules say?
  5. Is the issue maintenance, repair or replacement?
  6. What caused the damage?
  7. Is there an insurance claim?
  8. Is there resultant damage?
  9. Is there a maintenance or reserve-fund provision for the work?
  10. Has the correct authority been obtained before appointing a contractor?

The golden rule

Don’t start with “Who is going to pay?”

Start with:

“What exactly is the problem, and who is legally responsible for that part of the property?”

Once that has been established, the question of funding becomes much easier to answer.

Disclaimer

This article is for general informational purposes only and should not be considered legal advice. Community Schemes should consult professional legal advisors to ensure compliance with applicable laws and regulations.

Solver Property Services has managed community schemes since 2005 and combines property administration, financial expertise, maintenance oversight and compliance support in one hands-on service. Contact Solver to discuss your scheme’s needs and request a tailored property management proposal.