Comparison proposed new versus existing Management & Conduct Rules
The existing prescribed management rules were reduced by 40, from 71 to 31 proposed rules; and the existing prescribed conduct rules reduced by three, from 11 to eight. The proposed management rules (for commentary until Monday 2 November 2015) are substantially reorganized. The table below is my attempt to summarise the proposed transition. Please refer to and rely on the actual documents referenced for the wording and for interpretation. Download SECTIONAL TITLES MANAGEMENT SCHEMES REGULATIONS
MANAGEMENT RULES Proposed New Existing
|Numbers and headings of new proposed rules.||In terms of section 10(2)(a) of the Sectional Titles Schemes Management Act (No 8 of 2011)||Annexure 8 to the Regulations of the Sectional Titles Act (No 95 of 1986)|
|PART 1: INTRODUCTORY||New terms, such as ‘adjudicator’ and ‘Administrator’ in terms of the Community Schemes Ombud Service Act (No 9 of 2011)|
|2. Interpretation||2. Interpretation|
|3. Amendment and binding nature||BC may substitute, amend, repeal, or add in accordance to §10 of STSMA.
Member must ensure compliance.
|4. Service addresses||Trustees may designate an alternative fax/email. Must lodge with CSOS and give written notice to owners, bond holders and occupiers of sections.||3. Domicilium Citandi et Executandi|
|PART 2: TRUSTEES||4-14: Trustees of the Body Corporate|
|5. Trustees||If less than four members, all Trustees.||4. General|
|6. Requirements for office and disqualification||If direct/indirect interest must refrain from consideration or decision.||5. Qualifications; 13. Disqualification; 23. Disqualification from Voting;|
|7. Nomination, election and replacement||Essentially as before.||6. Election; 7. Nominations; 8. Vacancy in number; 9. Alternate Trustees; 14. Replacement|
|8. Payment and indemnity||Essentially as before.||10. Remuneration; 12. Indemnity|
|PART 3: TRUSTEE MEETINGS AND DECISIONS||15-24: Meeting of Trustees|
|9. General powers and duties||Consolidation of past elements.|
|10. Validity of actions||Essentially as before.||11. Validity of Act|
|11. Calling and attendance at meetings||Consolidation of past elements with provision for tele/other-conferencing||15. When to be Held, Notice and Attendance|
|12. Chairperson||If only two members, no chairperson.
Consolidation of past elements.
|18. Election of; 19. Removal of; 20. Replacement of; and 21. Temporary Chairman|
|13. Quorum||Provision for interim resolutions if no quorum.||16. Quorum; 17. Adjournment due to lack of Quorum|
|14. Voting||Consolidation of past elements, better phrased.||22. Voting Rights; 24. Round Robin Resolution|
|PART 4: OWNER MEETINGS||50-55: Meeting of Owners
56=67: Annual General Meeting
|15. Notice||Still 14 days, but must include agenda, documentation or summary and proxy appointment form in the prescribed format. Short notice of 7 days if urgency.||54. Notice|
|16. First general meeting||Several specifications of importance to new developments.||50. First Meeting|
|17. Annual and special general meetings||Must hold within two months of end of financial year; however, not obliged to hold AGM if all members waive in writing. Request for SGM must include motions or matters for discussion for agenda. Order of business specified. Reason for non-resolution at meeting must be noted. Provision for tele/other-conferencing; as well as for resolution in writing.||51. Annual General Meetings; 52. Special General Meetings; 53. Convening Meetings; 55. Special Business; 56. Compulsory Items of AGM Agenda; 38. Annual Trustees’ Report|
|18. Chairperson||Role outlined; condition to surrender when want to debate; and must not influence the meeting.||59. Chairman|
|19. Quorum||One third of value and certain exclusions specified.||57. Quorum; 58. Adjournment Due to lack of Quorum|
|20. Voting and representatives||Motions need not be seconded.
Special or unanimous resolution adopted by votes calculated in value, of the members present and voting.
Exclusions specified. Proxy conditions.
Special resolution by <50% value has waiting period of seven days.
|60. Voting Procedure; 61, Poll Procedure; 62. Value of Votes by Show of Hands; 63. Value of Votes for Special or Unanimous Resolutions or on a Poll; 64. No Vote in Certain Circumstances; 65. Voting by Trustee for Beneficiary; 66. Joint Voters; 67. Proxies|
|PART 5: FINANCIAL MANAGEMENT||25-49: The Functions, Powers and Duties of Trustees|
|21. Financial year, functions and powers||Financial year new schemes 1 October to 30 September, unless resolved otherwise. Restrictions and conditions similar as in past. May approach CSOS for relief.||25. General; 26. Powers; 27. Signing of Instruments; 28. Statutory and General|
|22. Maintenance, repair and replacement plan||A written maintenance, repair and replacement plan for the common property is required; including expectations re capital items in next 10 years; the present condition or state of repair; estimated costs and time; life expectancy once repaired and any other information required.
Formula for annual contribution to the reserve fund: [(estimated cost minus past contribution) divided by expected life]. Plan takes effect on approval by members. Trustees must annually report on implementation.
|39. Delivery of Estimate, Statement and Report|
|23. Insurance||Similar to the past. Risks no<25% in value of members require. Must restrict the application of any “average” clause to individual units. Must include a clause in terms of which the policy is valid and enforceable by any holder of bond.||29. Insurance|
|24. Administrative and reserve funds||Administrative fund for operating expenses, separate from reserve fund, as per §3(1)(a+b) of STSMA.
Payments form Admin Fund upon Trustee resolutions and approved budget; form Reserve based on Maintenance Plan; and when Trustees reserve as urgent; or by relevant order.
|41 Deposit of Funds|
|25. Contributions and charges||Former not later than 14 days notice of increase applies, but with conditions.
Conditions specified for non-payment collection. Former collection fees and enforcement of rules still apply.
May further only debit a member’s account on member’s consent or the authority of a judgment or order by a
judge, adjudicator or arbitrator.
|30. Collection of Contributions; 31. Liability in terms of §37(1) & 47 of STA|
|26. Financial records, budgets, reports and audit||Consolidation of past elements with some specifics.
Odd, the audit must be done within four months after end of financial year.
Estimates may include a discount of not more than 10% for early payments.
|35. Books of Account and Records; 36. Annual Financial Estimate; 37. Annual Financial Statement; 40 Audit; 43. Investment of Funds; 44 Use of Interest; 45. No Refund or Distribution of Profits or Assets|
|PART 6: ADMINISTRATIVE MANAGEMENT|
|27. Governance documents and records||Lodge notification of change of rules within 10 days after resolution.
Complete set of all management and conduct rules to include an index and specified references.
Specification about nature of minutes.
Records to include specified list of trustees, members and tenants; also of primary and utility sections, and exclusive use areas—indicating nature.
Also registered bondholders; future development rights; and any other records required by the regulations.
Keep copies of registered sectional plan and amendments. And specified range of relevant records.
|32. Records of Rules and their Availability; 34. Minutes; 48. Records of Administration|
|28. Managing Agents||BC may by may, by special resolution,
Appoint an executive managing agent to perform the functions and exercise the powers that would otherwise be performed and exercised by the trustees. 25% in value of members may apply to CSOS for executive managing agent appointment.
Several conditions apply, such as inspection of the common property at least every six months; report to members every four months on specified matters.
Ordinary management agreement may not endure for a period longer than two years.
|42. Managing Agent’s Control of Funds; 46. The Appointment, Powers and Duties of a Managing Agent; 47. Mandatory Provisions in a Managing Agency Contract; 49. Notice and Minutes to Managing Agent|
|PART 7: PHYSICAL MANAGEMENT||68-71: Duties of Owners and Occupiers of Sections|
|29. Improvements to common property||Unanimous resolution necessary to make alterations or improvements to the common property that is not reasonably necessary.
At least 30 days written notice with specified details required for reasonably necessary improvements
|33. Improvements to Common Property|
|30. Use of sections and common property||Body corporate must take all reasonable steps to ensure that a member or any other occupier not unreasonable breach §13(1)(d) of STSMA; or contravene any law or by-law; or any conditions of a license or other. Further consolidation of past elements.||68. Statutory and General; 69. Binding Nature;|
|30. Obligation to maintain||Conditions about maintaining water-heating installation.
Elaboration on the right that the body corporate must remedy the member’s failure and recover the reasonable cost of doing so.
|70. Statutory and General|
|Replaced by the Community Schemes Ombud Service Act (No 9 of 2011) to deal with applications for adjudication about dsiputes.||71. Determination of Disputes by Arbitration|
|Numbers and headings of new proposed rules.||In terms of section 10(2)(b) of the Sectional Titles Schemes Management Act (No 8 of 2011)||Annexure 9 to the Regulations of the Sectional Titles Act (No 95 of 1986)|
|1. Keeping of animals, reptiles and birds||Former expanded to make provision for owner or occupier with disability who reasonably requires a guide, hearing or assistance dog.||1. Animals, Reptiles and Birds|
|2. Refuse and waste disposal||Essentially similar but differently phrased.||2. Refuse Disposal|
|3. Vehicles||Much condensed and does make provision for emergency parking.||3. Vehicles|
|4. Damage to common property||Essentially similar but differently phrased.||4. Damage, Alterations or Additions to the Common Property|
|5. Appearance of section and exclusive use area||Consolidation of previous rules 5, 6 & 8.||5. Appearance for the Outside; 6. Signs and Notices; 7. Littering; 8. Laundry|
|6. Storage of flammable materials||Essentially domestic use of gas and certain exceptions.||9. Storage of Inflammatory (sic) Material and other Dangerous Acts|
|7. Behaviour of occupiers and visitors in sections and on common property||More specific about creating noise likely to interfere with the peaceful enjoyment by others.
Non-obstruction of lawful use of the common property by other persons.
Owner or occupier of a section must take reasonable steps to ensure that visitors not misbehave.
Obligation to comply with conduct rules, notwithstanding any provision to the contrary contained in any lease or any other grant of rights of occupancy.
|10. Letting of Units|
|8. Eradication of pests||Similarly phrased as before.||11. Eradication of Pests|