One of the most common misconceptions among sectional title owners is that their body corporate is simply another company.
It isn't.
Unlike a homeowners' association, which is typically incorporated as a non-profit company under the Companies Act, a body corporate is a statutory juristic person. It comes into existence automatically because the law provides for it.
A body corporate is created by law
A body corporate is established under the Sectional Titles Schemes Management Act 8 of 2011. It comes into existence automatically when the first unit in a sectional title scheme is transferred from the developer to a purchaser. Every owner automatically becomes a member of the body corporate.
A body corporate is not a company
It is not incorporated under the Companies Act. Instead, it operates in terms of:
-The Sectional Titles Schemes Management Act -The Sectional Titles Schemes Management Regulations -The Prescribed Management Rules -The Prescribed Conduct Rules (unless lawfully amended) -The scheme's registered sectional title plans
What powers does a body corporate have?
A body corporate is a separate legal person and can:
-Own property -Enter into contracts -Sue and be sued -Collect levies -Open and operate bank accounts -Employ staff -Appoint managing agents and contractors -Institute legal proceedings
Membership is automatic
If you own a unit in the sectional title scheme, you automatically become a member of the body corporate. Membership transfers automatically when ownership changes.
Trustees manage the scheme
Trustees are elected to manage the day-to-day affairs of the scheme. Their responsibilities include:
-Managing finances -Maintaining common property -Enforcing conduct rules -Preparing budgets -Collecting levies -Appointing contractors -Ensuring legal compliance
How is a body corporate different from a homeowners' association?
Body corporates govern sectional title schemes under the STSMA, while homeowners' associations generally govern freehold estates as non-profit companies under the Companies Act.
Why does this distinction matter?
Applying company law principles to a body corporate can lead to procedural mistakes and governance disputes. Understanding the correct legal framework is essential for trustees, owners and managing agents.
Need advice on your body corporate?
At VDM Attorneys, our Community Schemes Department advises bodies corporate, trustees and managing agents on:
-Trustee duties and governance -Levy recovery and collections -Conduct rule enforcement -CSOS disputes -Annual general meetings -Management rule amendments -Compliance with the Sectional Titles Schemes Management Act
Whether you're a trustee navigating complex governance issues or an owner looking to understand your rights and obligations, our team can help ensure your scheme remains legally compliant and effectively managed.