Since the introduction of the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”) on 7 October 2016, within 10 days of obtaining the required member approval of any amendments to a sectional title scheme’s rules, the trustees must lodge a consolidated set of rules to the Community Schemes Ombud Service (“CSOS”), for review and approval.
The consolidated set of rules must include:
- The amendments in highlighted form;
- an updated index; and a prominent reference to any rules that confer exclusive use rights, vary the effects of the participation quota, or impose financial or maintenance obligations on members.
The rules must be lodged under the prescribed Form B, and be accompanied by the relevant special or unanimous resolution.
Any rules lodged by the developer of a new development must be further accompanied by the approved sectional plan and the Conveyancer’s Certificate in terms of section 11(3)(e) of the Sectional Titles Act 95 of 1986.
The amended rules are only in operation on the date of issuing of the certificate of approval by the Chief Ombud. In this regard, the CSOS have advised that a copy of the certificate of approval is sufficient for the enforcement of amended rules for existing bodies corporate, but that the original certificate is required for rules put in place by the developer of a new development.
The CSOS have revived the review process of sectional title scheme rules, as previously undertaken by the Deeds Registries, and before approving any set of amended rules, they will “test” the amendments to ensure that it is consistent with the STSMA and the Regulations.
In this regard, the rules must:
- Be reconcilable;
- Be fair;
- Be reasonable;
- Apply equally to all owners in the scheme;
- Be appropriate to the scheme;
- Comply with any relevant legislation and By-Laws;
- Align with prescribed rules;
- Not reference repealed provisions of the Sectional Titles Act and
- Contain either management (management rules) or conduct (conduct rules) issues separately.
The CSOS have indicated that there are certain rules that they will approve simply because the members of the body corporate have approved same by the required resolution. Let us take a look at a few of the rule amendments that the CSOS have been dealing with in their review process.
The CSOS have indicated that they will allow an amended set of conduct rules to include a “no pet” rule, and will further not query or prescribe the limitation of the number of pets allowed to be kept in a scheme.
- Short-term letting
In regard to short-term letting, the CSOS will allow such a rule in either the management or conduct rules, and will also not query or prescribe a limitation of the duration of such short-term letting.
The CSOS have noted that there are certain “undesirable” rules, which they will not approve during the course of their review of a set of amended rules. Let us take a look at a few of these.
- The prohibition of slaughtering of animals
The CSOS will allow rules prohibiting the slaughtering of animals on common property, but will not approve a rule prohibiting this ritual within a section or exclusive use area.
- The imposition of penalties without a due process
The CSOS requires that the rules relating to breach of rules or imposition of fines and penalties include a process of imposing and enforcing a fine on an owner (including any fine raised due to the conduct of a tenant or other occupier), including a warning and a meeting with the contravening owner in order to review the fine raised or to be raised.
- The imposition of penalties equal to a “double levy”
- The amount of the fine or penalty must be reasonable and justifiable in the circumstances, and the CSOS suggests that a list of transgressions with corresponding fines be included or annexed to the rules.
- The termination of a lease agreement entered into between an owner, as a landlord, and a tenant of a unit.
- The disconnection of a supply of services in the event of non-compliance with the rules or non-payment of contributions levied.
- The disconnection of the supply of services in the event of non-compliance with the rules or non-payment of contributions levied.
- The accreditation of a service provider appointed by individual owners or occupiers.
- The referral of disputes to arbitration.
Conciliation and adjudication at the CSOS has replaced mediation and arbitration in community schemes. This does not mean that the parties to a scheme cannot attempt internal resolution of their dispute prior to approaching the CSOS for dispute resolution, but no party to a dispute may be required to pay costs for such internal dispute resolution.
If your scheme requires assistance with the review of your existing rules or proposed amendments, or requires a set of rules or resolutions to be prepared, feel free to contact us at firstname.lastname@example.org or telephonically on 021 686 3950, for a non-obligation quotation for this consulting service.