select
|

New levy structure according to the STSMA

Now that the Sectional Titles Schemes Management Act (STSMA) has been signed into law and became effective on the 7th October 2016 (which was when it was published in the Government Gazette) trustees of sectional title schemes will have to reassess the levy contributions from owners each month, says Mandi Hanekom, operations manager for the sectional title finance company Propell.
 
The first additional amount is the percentage that will go towards the reserve fund. It is a requirement according to the Act for all sectional title schemes to have:
 
(i)            an administrative fund to cover the costs of maintenance, repair, management and administration, rates, taxes and other municipality charges, insurance premiums and other obligations of the body corporate; and
 
(ii)          a reserve fund to cover the cost of future maintenance and repair of the common property.
 
The STSMA Regulations prescribes minimum amounts to be contributed to the reserve fund annually, which is determined with reference to the amount of money in the reserve fund at the end of the previous financial year.
 
It is suggested that 25% of the annual levy budget be set aside initially as a reserve fund for repairs and maintenance to the common property. The Act does allow for a lower additional amount to be paid in if there is already a reserve fund in place but the majority of sectional title schemes have not already implemented this practice, says Hanekom.
 
The Community Schemes Ombud Service Act (CSOSA) has now also been signed and became effective on the same date as the STSMA. 
 
Each community scheme (which includes sectional title schemes, share block companies, home or property owners’ associations, housing schemes for retired persons and housing co-operatives) is required to fund the Community Schemes Ombud Service (CSOS) and must collect a prescribed monthly levy from every unit and pay it to the Service on a quarterly basis. 
 
There is a sliding scale according to levies paid by owners to the scheme to ascertain what the CSOS levy should be. The current prescribed maximum CSOS levy is R40 a month
 
Owners might not be happy with the increased amounts that will have to be paid in, but as this is now a requirement and the majority of schemes should be allowing for maintenance amounts to be budgeted for anyway, this should be seen as a “forced” saving, which will help protect many of the owners of sectional units against the need to pay special levies in the future, said Hanekom


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK