New legislation came into effect late last year with regards to sectional title schemes, CSOS and the new Sectional Title Regulations. This is what these mean to you as a Sectional Title owner.
Sectional Title regulations – there is a new Sectional Title Schemes Management Act (STSMA), this was brought into effect on 7 October 2016. There are many similarities between this new piece of legislation and the Sectional Title Act of 1986.
CSOS – this refers to the Community Schemes Ombud Services Act, this is brand new and is a regulatory body to assist. We encourage you to look at their website.
Who are they? CSOS provide an alternative, impartial and transparent service for the resolution of unresolved disputes in community schemes. Established in terms of the Community Scheme Ombud Service Act, 2011 [Act 9 of 2011) the CSOS regulates the conduct of parties within community schemes and ensures their good governance. www.csos.org.za
It is important to note that as there was no transition period provided for in the implementation of the STSMA and CSOS, there are a number of requirements that have to be met within the next 90 days and these have both a financial and administrative impact on members and managing agents. Therefore, members are encouraged to read carefully below as these changes will have an impact on everyone.
What needs to be done from an administration perspective:
What is the financial impact on members?
1). Each scheme is required to collect a CSOS levy from each unit owner monthly and pay CSOS on a quarterly basis the sum total of all units of the body corporate. The process will be:
2). Each scheme must maintain a certain level of reserves. This may require an additional levy obligation and depends on the amount of reserves per the latest annual financial statements. Each scheme will be notified separately. The following applies:
3). Fidelity cover – CSOS sets a minimum sum of fidelity insurance cover required. The insurance industry is still providing quotations on this type of cover, but this may result in an additional premium with the insurance policy for this new cover.
Other interesting changes or areas to note
The above summary highlights just some of the changes. Members are encouraged to familiarise themselves with the new legislation.
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