Why Property Management of Community Schemes is an Issue in South Africa

Community schemes, including sectional title developments, homeowners’ associations, and gated estates, are an integral part of South Africa’s housing landscape. They provide shared spaces, facilities, and governance structures, offering an appealing lifestyle to many. However, managing these schemes has proven to be a significant challenge in the country, leading to issues that impact property values, homeowner satisfaction, and the overall success of these communities. Below, we explore the reasons why property management in community schemes remains a pressing issue in South Africa.

1. Lack of Effective Governance and Expertise

One of the core challenges is the absence of professional and experienced trustees or directors to govern these schemes. In many cases, residents are elected to manage the scheme without adequate knowledge of the legislative and financial requirements. This can lead to poor decision-making, governance disputes, and non-compliance with laws such as the Sectional Titles Schemes Management Act (STSMA).

Without professional oversight, many schemes face challenges in maintaining their finances, resolving disputes, and ensuring long-term sustainability.

2. Financial Mismanagement

Community schemes require careful financial management to remain solvent and maintain the shared property effectively. Yet, many schemes struggle with issues such as:

• Arrears and unpaid levies: Some homeowners default on payments, leaving the scheme without adequate funds.

• Inadequate budgeting: Poor planning often results in insufficient reserves for long-term maintenance and emergency repairs.

• Misuse of funds: In some cases, funds are mismanaged or misappropriated due to a lack of checks and balances.

These financial challenges not only affect the immediate upkeep of the property but also have long-term consequences on property values and homeowner satisfaction.

3. Poor Maintenance and Ageing Infrastructure

Maintenance is one of the most visible aspects of property management, yet many community schemes fall short. Delays in routine maintenance and repairs, combined with insufficient reserve funds, lead to deteriorating infrastructure and facilities. In aging developments, the lack of proactive maintenance can quickly result in costly issues such as structural damage, water leaks, and electrical failures.

When shared areas and facilities are not well-maintained, it diminishes the quality of life for residents and negatively affects property values.

4. Disputes Among Residents and Trustees

Community schemes often face interpersonal conflicts between trustees, residents, and management teams. Common disputes arise from:

• Unpaid levies or unfair levy increases.

• Non-compliance with scheme rules by residents.

• Disagreements over maintenance priorities or financial decisions.

Without an effective dispute resolution process in place, these conflicts can escalate, creating a toxic environment that discourages potential buyers and investors.

5. Legal and Regulatory Non-Compliance

Community schemes in South Africa are governed by complex regulations, including the STSMA and the Community Schemes Ombud Service Act (CSOSA). Many trustees lack the necessary training or resources to comply with these laws, leading to potential legal issues. Non-compliance can result in fines, legal battles, and even intervention by the Ombud Service.

Furthermore, many schemes fail to submit required documents such as audited financial statements or budgets, putting them at risk of sanctions.

6. Insufficient Use of Technology

Property management in South Africa is often hindered by outdated systems and manual processes. Many schemes rely on inefficient communication methods, such as paper notices or ad-hoc WhatsApp groups, leading to miscommunication and confusion. Additionally, a lack of centralised systems for managing finances, maintenance, and compliance adds to the administrative burden.

Modern property management platforms, like SmartProp, could address these issues by streamlining operations, improving communication, and ensuring compliance. However, adoption of such technology remains low in many schemes.

7. Inequality in Property Management

South Africa’s socio-economic disparities also play a role in property management challenges. High-end schemes with wealthy residents tend to have better resources, while lower-income schemes often face significant struggles with levy collection, governance, and maintenance. This inequality exacerbates the divide between well-run and poorly managed schemes, affecting the broader property market.

Conclusion: The Need for Professional Property Management

Addressing these challenges requires a shift toward professional property management solutions. By implementing modern tools, hiring experienced managers, and providing training for trustees, community schemes can improve governance, financial stability, and overall property value.

SmartProp, for example, is designed to tackle these issues by offering features like centralised document management, streamlined communication, and automated financial tracking. Solutions like these empower schemes to operate more efficiently and foster thriving communities.

As South Africa continues to urbanise, the importance of effective property management cannot be overstated. It’s time to rethink how we manage community schemes to ensure they remain valuable assets for homeowners and investors alike.