Sectional Title Legislation

Changes to Sectional Title Legislation 

As has been widely publicised, the new Sectional Title Schemes Managment Act (STSM Act) was gazetted in October 2015 and is expected to be signed into operation very soon.

One of the many innovations is that it will become compulsory for bodies corporate to "obtain a replacement valuation of all buildings and improvements (...) at least every three years and present such replacement valuation to the annual general meeting.

(View the entire wording of clause 23 ('Insurance') of the gazetted new STSM Actas highlighted on pages 39 - 41.)

WHAT IS THE COST OF A REPLACEMENT VALUATION?

Trustees will be required to budget for a professional valuation and the question of cost inevitably will be raised: fees are calculated in accordance with the size and location of a complex, i.e. 

residential schemes with up to 10 sections:       R1 800 + R40 per section (excl. VAT)
residential schemes with 11 or more sections:   R2 500 + R20 per section (excl. VAT) 

(Example: The valuation cost for a complex with 50 sections will amount to R3 500(excl. VAT), which translates to less than R27 per owner per year.)