A comparison of first and third generation sectional title legislation – an accountancy perspective

Abstract

After being in effect since the late 1970s, first generation sectional title legislation in South Africa was recently completely overhauled into what is now commonly referred to as “third generation sectional title legislation”. The original Sectional Titles Act was split into three separate statutes, namely the Sectional Titles Schemes Management Act No. 8 of 2011, the Sectional Titles Amendment Act No. 33 of 2013 and the Community Schemes Ombud Service Act No. 9 of 2011, with various Regulations detailing how the different acts should be applied in practice. Even though some of the changes effected by the new legislation is simply technical adjustments and replications of the original first generation legislation, the new acts introduce a number of significant changes that will have an effect on accountancy, financial management and risk aspects of sectional title schemes in future. No academic research has been undertaken on a comparison of first and third generation sectional title legislation in South Africa from an accountancy perspective as yet. This paper, therefore, contributes to the current body of literature in an attempt to start addressing this shortcoming. The aim of this paper is to discuss the findings of a literature review comparing first and third generation sectional title legislation, with specific reference to accountancy-related aspects. Practical recommendations will be made on how role players in the sectional title industry can prepare for the new legislative aspects specifically regarding accountancy aspects, and further research opportunities in this regard will be discussed.