Sectional Title is a residential, commercial, or industrial property development, called a Sectional Title Scheme or Body Corporate, where each individual owner owns a section of the property, called a unit. The Body Corporate may be houses, high-rise flats, offices, shops or factories. The sections are indicated on a sectional plan which is registered at the Deeds Office.

As an owner, you are automatically a member of the Body Corporate. However, the member is the registered owner of the unit. For example, if the unit is in the name of two persons, they form one member. Or to put it differently, one unit is one member of the Body Corporate and has one vote.

All the members (owners) in the Sectional Title Scheme makes up the Body Corporate. The member has the right to a vote on the affairs of the Body Corporate at a General Meeting.

You own a unit, which is a specific section in the Scheme, and an “undivided share” of the Common Property. The unit can be a flat, a house or a garage and in some instances, may have an “exclusive use area”.

Boundaries of unit

The boundaries of your unit are the inside of the unit, i.e. the centre lines of the walls, ceilings, doors, windows and floors, but may include patios and balconies, depending on how your section was registered on the Sectional Plan. For example, the inner 50% of your unit’s front door belongs to you and the outer 50% is Common Property.

Common Property

Common Property, also known as Common Use Areas, is all areas that are not registered sections. These include roofs, gardens, driveways, children play areas, parking bays and the outer 50% of walls, doors, windows and ceilings.

Exclusive Use Area (EUA)

An EUA is an area on the Common Property that is dedicated for the exclusive use of a specific unit and may include gardens, parking bays, garages or balconies. The EUA may be registered on the Sectional Plan or may be defined in the Conduct Rules of the Body Corporate. For more information on your unit, you will have to obtain a copy of the Sectional Plan.

The Body Corporate has an obligation to ensure the structure of your unit and the Common Property. As a rule of thumb, if you took your unit, turned it upside down and shook it, everything that does not fall out are insured by the Body Corporate, though some limitations may apply. In addition, the warm water installation are insured, but the excess fee is for the account of the owner.

The levies are the income generated by the Body Corporate, from the owners, to settle the expenses of the Body Corporate. Depending on the Body Corporate, the expenses may include some or all the following: city council accounts, maintenance of the common property, refuse removal, insurance premiums, administration fees, lift maintenance, salaries and wages, audit fees, and other services. However, the owner pays rates and taxes directly to the city council.

Annually, the Trustees of the Body Corporate must compile a budget for the expected expenses of the Body Corporate for the next financial year and the levies are calculated based on the estimated expenses.

The levy itself is calculated per participation quota, i.e. the size of the unit. The bigger the unit is, the higher the levy will be in relation to smaller units.

Administrative levy / normal levy:

The administrative, or “normal”, levy is charged to generate income for the normal budgeted expenses (usually paid monthly) of the Body Corporate, i.e. city council accounts, lift maintenance, salaries and wages etc.

Reserve fund levy:

The Reserve Fund levy is prescribed by the Sectional Title Scheme Management Act (STSMA), Act 8 of 2011, as amended, to build reserve funds for future maintenance. Specific prescriptions apply to the amount that must be saved (reserved) per annum, into a separate budget and account. The Reserve Fund is also linked to a 10-year maintenance plan.

CSOS levy:

The CSOS levy is a prescribed levy that is paid quarterly to CSOS – the Community Scheme Ombud Services. It is calculated as follows:

Administrative (“normal”) levy – R 500 = amount x 2%, to a maximum of R 40.00 per month.

Example: R 1,500.00 – R 500.00 = R 1,000 x 2% = R 20.00

Special levy:

A special levy can be raised by the Trustees of the Body Corporate for unexpected and reasonably necessary expenses which were not included in the approved budget at the Annual General Meeting (AGM).

In accordance with legislation, it is a legal requirement for all members (owners) to pay their levies timeously and in advance and may not be withheld for any reason whatsoever. Members not settling their contributions / levies, are handed over for legal debt collection processes which incurs additional legal fees, payable by the member. In a worst-case scenario, a member may be sequestrated and the unit sold to settle outstanding debts.

The Body Corporate is controlled, or managed, by Trustees. The Trustees are elected annually, by the owners, at a general meeting and will often employ a Managing Agent to assist them with managing the administration and finances of the Body Corporate.

Trustees are elected annually by the members (owners) at an Annual General Meeting to represent and manage the Body Corporate on behalf of the members (owners) until the next Annual General Meeting. A trustee need not be a member (owner) of the Body Corporate, but it is prudent for the majority of Trustees to be members (owners).

The Trustees are responsible for managing the day-to-day affairs and finances of the Body Corporate in the interest, and benefit, of all the owners, but must manage the Body Corporate in accordance to instructions and restrictions imposed by the owners at a general meeting. Trustees will often employ a Caretaker to assist or manage the day-to-day on-site affairs of the Scheme.

The Trustees carry a fiduciary right to manage the Body Corporate and are responsible:

1. For the Collection of Contributions (Levies) – that contributions are budgeted adequately and paid on time, in order to settle the expenses of the Body Corporate;
2. To arrange and hold meetings: Trustee meetings as needed to properly manage the Body Corporate as well as an Annual General Meeting each year;
3. To enforce the Acts and Conduct Rules on members and residents;
4. To manage and maintain the Common Property.

The Trustees may appoint a Managing Agent to assist with the above, but the fiduciary responsibility remain that of the Trustees.

The Managing Agent does the administration of the Body Corporate and assists the Trustees. The Managing Agent collects the levies, pays the expenses and advises the Trustees regarding relevant legislation. The Managing Agent does not have any executive decision-making powers and can only act upon instructions received from the Trustees. The responsibility of the Managing Agent can differ, but is outlined in a formal management agreement with the Body Corporate.

A General Meeting is a meeting of members (owners) of the Body Corporate. The Annual General Meeting (AGM) is held annually to deal with mandatory and statutory items. All other General Meetings are called Special General Meetings (SGM).

The Trustees, often with assistance from the Managing Agent, compiles a proposed budget and presents it to the members (owners) at the AGM where it is approved with or without amendment. However, it is important to note that the Trustees can increase contributions (levies) with a maximum of 10% at the start of a new financial year, before the AGM.

A Body Corporate is subject to the following legislation and rules:

1. The Sectional Titles Act, Act 95 of 1986, as amended (STA). The STA consists of the Act and Regulations to the Act.
2. The Sectional Title Scheme Management Act, Act 8 of 2011, as amended (STSMA). The STSMA consists of the Act and Regulations to the Act. The Regulations consists of Management and Conduct Rules, though these may differ slightly from Body Corporate to Body Corporate.