How is your sectional title scheme really doing?

Managing agent

When a body corporate enlists the services of a managing agent, both parties should ensure that the management agreement between the managing agent and the body corporate complies with the requirements as set out in the STSMA Regulations, i.e., the agreement may not endure longer than three years.

The managing agent can attend all meetings and provide advice but may not act as a proxy or vote at any of the meetings unless they are members themselves.

The managing agent will also provide support to trustees when there is a contravention of any law or by-law relating to the use of sections and common property, and advise the trustees to forbid anything that will hurt the value of the building.

Annual general meeting

In terms of Prescribed Management Rule (PMR) 51, the AGM must be held within four months of the end of each financial year, keeping in mind that the body corporate’s financial statements need to be finalized before the notice for the meeting can be sent out.

PMR 26(1)(c) states that a body corporate must prepare annual financial statements for presentation at the AGM.

PMR 17(6)(j)(v) states that the AGM must consider the financial statements.


Assuming that the body corporate complies and arranges an AGM within four months of the new financial year, the budget adopted at the AGM will only be implemented in the fifth month of the new financial year.

This means that the income requirements of the new budget are already five months short of the amount of the increase and the effect of this is that a larger increase needs to be implemented to compensate for the first five months.

To overcome this, trustees could make use of the provision to increase the levies at the commencement of the year financial year.

CSOS (Community Schemes Ombud Service)

CSOS was established to regulate the conduct of parties within a community scheme and to provide an alternative to costly and time-consuming arbitration and litigation.

A prescribed monthly CSOS levy is payable by all unit owners in a community scheme and paid over to CSOS every quarter.

Body corporate rules

A body corporate has two sets of rules that must be reasonable and apply to all unit owners.

Management rules dictate how the body corporate should be managed and administered. The management rules may be added to, amended, or repealed by a unanimous resolution of the body corporate and then certified by the Chief Ombud.

Conduct rules that apply to the behaviour of members, and how sections and common property are used. The conduct rules may be added to, amended, or repealed by special resolution of the body corporate and certified by the Chief Ombud


The STSMA (Sectional Titles Schemes Management Act) entrusts the body corporate with the functions of:

  • Insuring the building
  • Taking out insurance for prescribed risks
  • Utilising the money paid out by insurance to repair the damage or rebuild
  • Paying its insurance premiums timeously
  • The body corporate must ensure that they have adequate insurance cover

The body corporate may, by way of a special resolution, take out additional insurance that covers risks not prescribed by the STSMA and its regulations.

STSMA does not preclude unit owners from taking out insurance themselves, against damages arising to their sectional where such risks are not covered in the body corporate’s insurance policy


Author: Danielle Crewe – Sectional Title Senior Manager

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