ERRATA ON NEWS FLASH 27 OF 2016
AMENDMENT OF SECTIONAL TITLES ACT 95 OF 1986 BY
SECTIONAL TITLE SCHEMES MANAGEMENT ACT 8 OF 2011

Introduction
 
The Sectional Titles Schemes Management Act, 2011 (Act 8 of 2011), came into operation on 7 October 2016.  The purpose of Act 8 of 2011, amongst other things, is to provide for the establishment of bodies corporate to manage and regulate sections and common property in sectional titles schemes;  to amend the Sectional Titles Act, 1986 (Act 95 of 1986);  and to provide for matters connected therewith.
 
The amendments to the Sectional Titles Act will now be highlighted:

• Section 25(6) has been amended to read as follows:

   

•  Repeal of section 35: 

• Rules are no longer to be lodged with the Registrar of Deeds.  Notifications in respect of the substitution, adding, amendment or repeal of Rules must now be lodged with the Chief Ombud. See discussion infra on the lodgement of the certificates to be lodged in respect of the rules

 

• Section 36 has been amended by the substitution for subsections (1), (2), and (3) of the following sections :

   

• The current practice in respect of the preparation and lodgement of Form W upon the establishment of a body corporate must be continued with.  The original Form W must be delivered to the relevant conveyancer and a copy thereof must be submitted to the Chief Ombud.  This practice must only be followed when the first unit in a scheme is registered in the name of any person other than the developer, and not upon the transfer of all the other units
   
  •  Form W must be adapted to read along the following lines:

   
   
 
 
I, Registrar of Deeds at ……… hereby certify that a body corporate designated as the Body Corporate of the ……… . Scheme, No. ……… is deemed to be established with effect from ……… .
 
 
Signed at ……… on ………
Seal of Office
 
 
Registrar of Deeds
 

• Section 11(3)(e) has been amended to read as follows:

 

• It is important to note that section 10 of Act 8 of 2011 does not provide for the Chief Ombud to "approve" Rules.  The said section, however, does provide for the Chief Ombud to "approve the substitution, addition, amendment or repeal of Rules."
• A certificate issued by the Chief Ombud must therefore be lodged with the opening of a sectional title register, only in instances where a substitution, addition, amendment or repeal of the statutory Rules has been approved and affected.
• In instances where the statutory rules are to be made applicable to a scheme, it will be necessary for a conveyancer's certificate to be lodged to the effect that the Rules contained in Annexures 1 and 2 of the Regulations to Act 8 of 2011 are applicable.

 

• The question begging an answer is whether section 11(3)(e) of Act 95 of 1986 must strictly be followed in so far the certificate by the Chief Ombud to be lodged in instances where Rules are to be substituted, added to, amended or repealed by the developer when submitting an application for the opening of a sectional title register?

(Note: The certificate that is being referred to in section 11(3)(e) of Act 95 of 1986, is the same certificate that is being issued by the Chief Ombud upon approval of the substitution, addition, amendment, or repeal of the rules in term of section 10(5)(c) of Act 8 of 2011.  The said section reads as follows: “(c) If the chief ombud approves the substitution, addition, amendment or repeal of rules for filing, he or she must issue a certificate to that effect.”)
 

• The answer, in terms of a directive from the CRD, is No.  Section 10(5)(d) of Act 8 of 2011 provides for the substitution, addition, amendment or repeal of the Rules to come into operation on the date of the issuing of the certificate contemplated in section 10(5)(c) or on the date of the opening of the sectional title register for the scheme, whichever is the latest.

 
It is possible, from the wording of section 10(5)(d) of Act of 2011, that the certificate by the Chief Ombud (which is supposed to be lodged in the deeds registry in terms of section 11(3)(e) of Act 95 of 1986) may not be in existence at the time of the lodgement of the deeds for the opening of the scheme. Section 10(5)(d) gives the impression that this certificate may be issued by the Chief Ombud after the date of the registration of the opening of the scheme, and that such later date must then be regarded as the date of the coming into operation of the substitution, addition, amendment or repeal of the Rules .
 
Therefore, where notification was made for the substitution, addition, amendment or repeal of the Rules, but where the certificate has not yet been issued by the Chief Ombud, the following certificate by the conveyancer may be lodged:
   

• Section 15B (3)(a)(i)(aa) has been amended to read as follows:

 

• A body corporate is established in terms of section 2(1) of Act 8 of 2011 and not section 36 of Act 95 of 1986, as the case previously was.

• A question in this regard is whether the certificate in terms of section 15B (3)(i)(aa) must make reference to the section / Act in terms of which the Body Corporate has been established?

 

• The answer again is No. It is acceptable if the ‘Section 15B (3) certificate’ only makes reference to the establishment of the Body Corporate, without mentioning the specific section / Act under which such Body Corporate was established. 

Section 21 of Act 8 of 2011 – Transitional arrangements
 
Section 21 of Act 8 of 2011 reads as follows:
 
"Rules prescribed under the Sectional Titles Act must continue to apply to new and existing schemes until  the Minister has made regulations prescribing management rules and conduct rules referred to in section 10(2) of this Act."
 

• The Minister has promulgated Rules under Annexures 1 and 2 of the Regulations to Act 8 of 2011.  The rules as contained in Annexures 8 and 9 of Act 95 of 1986 are therefore no longer applicable.

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