The Sectional Title Schemes Management Act (STSMA) is the law under which all sectional title schemes are managed.
Every townhouse scheme or block of flats that is registered as a sectional title scheme is managed in terms of this Act.
The Act specifies how owners are recognised, how they can vote, the election of trustees and how the accounts of the building should be run.
It is not an easy Act to understand or to run – to the letter of the law – and even professional administrators seldom get it 100 percent right.
In my opinion, it is far too complicated for what it is trying to achieve especially as you think that essentially the building is being run with the help of professional managers and in some cases by the owners themselves.
Many of these owners are not lawyers or accountants, which is the level that this Act is pitched at.
Most owners just don’t have the knowledge or skills needed to run their building in terms of the STSMA.
In my mind, this Act is designed to solve problems that may not exist or which were easily handled under the previous Sectional Titles Act.
For example, voting: under the old Act, each owner had a vote with equal value to every other owner and this was irrespective of the size of the unit or its use.
Under the new Act, voting and attendance at meetings is dependent on the size of the unit as well as the number of attendees.
In a larger building, a quorum used to be 10 percent of the owners being present with one vote per owner per unit.
So, if you owned 10 bachelor flats you had 10 votes.
In nearly 50 years of working with sectional units this was never a problem.
The new STSMA prescribes a different way of voting, one of proportional voting depending on the size of your unit.
So, in the above case, the owner of 10 bachelor flats of sale 0.0500 percent participation quota (PQ) each would have a vote of 0.500 percent of the whole building while the owner of a 300 square metre three-bedroom flat would have a vote of the same value.
What makes this so difficult is while under the old Act all that was necessary was to count the votes, now the vote has to be counted as the PQ of each unit.
This involves complicated spreadsheets and counting programmes to get it right.
The same applies to the attendance register, which previously needed just somebody to sign against their units.
Now a calculation has to be done to find out what size your PQ is and then add up all the PQs in attendance to determine whether or not 30 percent of all the owners by size are in attendance.
This might be fairly easy in a scheme of 10 units but it becomes a major headache when you have schemes of 678 units of differing size.
And what about a scheme with 15 000 units?
They even tell you that you need to issue voting cards at the beginning of the meeting – clearly an impractical thing to do.
The joke was that if somebody was unhappy with the simple voting system they could have asked for a vote by PQ, but I am unaware of this ever happening in any building that I have ever been involved in.
So why change the system?
Sounds confusing and complicated – well, it is and, in my opinion, should be changed back to the old way of vote counting.
As it is in practice, few if any meetings are held where voting is done based on the PQ and every meeting that I coordinate works on consensus.
- Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.