Scheme Rules – Meaning of Irreconcilable Rules – Article by Quintin Badenhorst EY Stuart Incorporated

Have certain scheme rules under previous legislation regulating Sectional Titles automatically changed on the commencement date of the Sectional Titles Schemes Management Act of 2011?

Various amendments have been made to the legislation regulating sectional title
schemes, the latest being, the Sectional Titles Schemes Management Act (“STSMA”).
The most notable change in its provisions is the extensive change to the contents of
the scheme rules.

Section 10 of the STSMA which deals with rules stipulates that any unaltered rules or
conduct rules contained in Schedule 1 and 2 to the repealed Sectional Titles Act,1971
or any other provision and applying immediately prior to 1 June 1988 in respect of any
scheme, lapsed on that date and such rules and conduct rules are considered to have
been replaced subject to addition, amendment or repeal as contemplated in
subsection (2)(a) and (b), by the prescribed management rules and conduct rules as
contemplated in that subsections.

However, on the other hand, section 10(11) stipulates that if rules or conduct rules
were amended, substituted, additions made or repealed, such rules and/or conduct
rules will remain in force after the commencement date of the STSMA, except to the
extent that such rule or conduct rule may be irreconcilable with any prescribed
management rule contemplated in subsection (2)(a) or (b), in which case the
management rule concerned applies: Provided that any such rules were, as from 1 June  1988, considered to be supplemented by any rule in the prescribed management
rules which is not provided for in such rules.

In terms of Section 21, the transitional arrangement made was that the rules
prescribed under the Sectional Titles Act, 95 of 1986, must continue to apply to new
and existing schemes until the Minister has made regulations prescribing management
rules and conduct rules referred to in section 10(2) of this Act. These new rules were
prescribed on 7 October 2016. Therefore, these new rules (“Annexure 1 and 2
standard rules”) became applicable to old and new schemes, except in the
circumstance where the body corporate substituted, amended or repealed the rules
(“own rules”), which rules are retained after the commencement of the STSMA, except
if such rules are irreconcilable with the prescribed management rules.

Therefore, the effect of the above provisions is that:

– if a body corporate has never changed its rules or conduct rules or amended same,
either by the developer or the body corporate itself, those rules and conduct rules
ceased to apply at the date of commencement of the STSMA, and were replaced in
its entirety by the new management and conduct rules prescribed under the STSMA;

– if the rules were amended or repealed by the body corporate (“own rules”) prior to
commencement of the STSMA and provided they are not irreconcilable with the new
prescribed management rules (not conduct rules), such rules remain in force.
If a scheme has amended their conduct rules to prohibit the keeping of pets prior to
the promulgation of the Annexure 1 and 2 Rules under the STSMA, such rules shall
not be irreconcilable with the new prescribed management rules, and therefor still
apply to the scheme.

Where an old scheme rule stipulated that legal costs may be debited to an owner’s
levy account, such rule would be irreconcilable with prescribed management rule
25(5), which rule stipulates that such a charge may only be debited with the owner’s
consent or the authority of a judgement or order by a judge, adjudicator or arbitrator.

To summarise – rules validly made before the commencement date of the STSMA
which are not in conflict with the newly prescribed management rules, continue to
apply in terms of the STSMA and such existing rules are furthermore supplemented
with rules which are not provided for in such rules. Such additional or unprovided rules
do not need to be adopted by the body corporate.

Commercial and property law practitioners

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