When a new sectional title scheme is launched, the developer’s involvement doesn’t end with the construction and sale of units. One of the most important but often overlooked aspects of scheme establishment is the legal handover to the body corporate. This is not merely a ceremonial step — it is a statutory requirement that lays the groundwork for how the body corporate will function going forward.

Failure to comply with these obligations can leave the body corporate without vital documents, warranties, or financial records — making governance, maintenance, and future enforcement actions unnecessarily difficult. This blog unpacks the legal context, the purpose behind the handover process, and what owners and trustees should expect — and demand — from the developer at the first general meeting.

Why the Developer’s Handover Obligations Matter

The initial phase of a sectional title scheme is unlike any other time in its lifespan. During this period, the developer acts as the scheme’s de facto operator — handling sales, occupying units, coordinating building works, and managing finances. But once the scheme is formally established and a body corporate is created (on the transfer of the first unit), that responsibility shifts. From this point on, trustees appointed by the owners are expected to assume full control over the management and administration of the scheme.

To do that effectively, they need access to all the legal, technical, and financial records the developer has been maintaining. This includes proof of rates payments, plans for common property infrastructure, and full details about warranties and contractors. Without this, the trustees start at a disadvantage — operating without a clear picture of what has been done, what still needs to be completed, and what obligations carry forward.

Moreover, the failure to obtain these documents upfront can create real problems later — especially if trustees need to take enforcement action against an owner (such as the removal of an unauthorised alteration) or defend the scheme against claims. As we explored in our recent blog on the misuse of levy clearance certificates, documentation forms the legal backbone of most body corporate decisions. Without it, trustees may struggle to act lawfully or effectively.

What the Law Requires from Developers

The obligation for developers to hand over specific documents at the first general meeting is set out in the Sectional Titles Schemes Management Act (STSMA) and the Prescribed Management Rules (PMRs). These rules are not optional; they exist to ensure continuity, transparency, and accountability from the outset of the scheme’s life.

Critically, the developer’s responsibility doesn’t end at construction — it includes administrative and financial reporting, infrastructure transparency, and proper transfer of operational knowledge. In many cases, the incoming trustees will have had no prior involvement with the project, which makes a comprehensive handover essential for ensuring responsible governance moving forward.

This legal framework aligns with broader principles of sectional title management: transparency, accountability, and long-term financial sustainability. Without these safeguards in place, trustees and owners are left with gaps — gaps that could make it harder to remove underperforming trustees, enforce rules, or manage the property efficiently.

Documents the Developer Must Provide at the First General Meeting

The developer is required to provide the body corporate with several important documents, especially at the first general meeting.

1. A copy of the sectional plan.
2. A certificate from the local authority confirming that the developer has paid all rates due up to the establishment of the body corporate.
3. Proof of revenue and expenditure concerning the scheme's management from the date of the first occupation of any unit until the establishment of the corporate body.
4. All building plans approved by the local municipality.
5. Any encroachment permit or other document issued by the local municipality regarding improvements in the scheme.
6. Plans showing the location of all pipes, wires, cables, and ducts as referred to in Section 3(1)(r) of the STSMA.
7. Names and addresses of all contractors, subcontractors, and others employed by the developer related to the development of the scheme.
8. All warranties, manuals, schematic drawings, operating instructions, service guides, and similar documentation concerning the construction, installation, operation, maintenance, repair, and servicing of any common property or body corporate assets, including occupation certificates and any guarantees or warranties provided to the developer.
9. All records that the body corporate is required to prepare or retain under PMR 27.

Additionally, the developer must furnish proof of revenue and expenditure and financial statements relating to the management and administration of the scheme from the date of establishment to the date of the first general meeting for approval.

Failure to provide these documents obliges the body corporate to obtain or prepare the documents and recover the reasonable costs from the developer.

Hence, the developer's handover is comprehensive and critical to the proper establishment and functioning of the body corporate.

What Happens If the Developer Fails to Comply?

If the developer fails to deliver these documents, the body corporate is not left without remedy. In terms of the regulations, the body corporate may obtain or prepare the missing documents itself — and then recover the reasonable costs from the developer. This not only provides trustees with a path forward but also creates accountability from the outset.

However, recovering these costs may require formal legal intervention or dispute resolution. This highlights why it’s so important for trustees and managing agents to understand the full extent of the developer’s obligations — and to act swiftly if those obligations are not met.

Trustees must also remember that their ability to govern effectively later on — including responding to rule contraventions or initiating removal proceedings for inactive or obstructive trustees — will depend heavily on the accuracy and completeness of these foundational documents. As covered in our blog on removing a trustee from a body corporate, governance starts with proper information and lawful processes.

VDM Attorneys – Legal Oversight for Developer Handovers and Body Corporate Governance

The developer handover process is not just administrative — it forms the legal backbone of a sectional title scheme’s ability to function, govern, and plan responsibly. When key documents are missing or incomplete, the risks are passed on to the owners and trustees who must lead the scheme forward.

At VDM Attorneys, we provide legal guidance to bodies corporate during the crucial early stages of scheme establishment, including ensuring that developers meet their statutory obligations at the first general meeting. We also support trustees and managing agents with regulatory compliance, governance, and dispute resolution — so they can act with legal certainty from day one.

If you're part of a newly established scheme and unsure whether the correct developer documents have been provided, our team of property lawyers specialize in sectional title schemes and can assist you in reviewing your rights and recovering what's owed to the body corporate.