Finding a suitable tenant to rent investment units in sectional title is becoming increasingly difficult. Credit checks, phone calls to previous landlords and checking for criminal records may show that the potential tenant is ‘clean’ but there can never be an absolute guarantee as to how the tenant will behave. Once owners are satisfied that they have found the right tenant, all that’s needed is to sign the lease and owners have nothing to worry about, right?
But what if the tenant turns out to be a nightmare and causes havoc in the scheme?
The legislation governing sectional title schemes in South Africa focuses on the direct relationship between bodies corporate and owners. But what does it have to say about tenants?
The Sectional Titles Schemes Management Act, 8 of 2011 (“the SMSTA”) provides that a scheme’s rules bind the body corporate, owners of sections and any person occupying a section. It also provides that the body corporate has the power to do whatever is reasonably necessary to enforce the rules. One of its obligations in this regard is to deliver a copy of the rules to any person who becomes an occupier of a section. The Rental Housing Act requires a copy of the scheme rules to be attached to a written lease, so one way or another tenants are made aware of the rules and know that they must comply with them!
What if they do not? Buy‐to‐let investor landlords need to know their liability in relation to their tenant’s actions.
The prescribed rules require owners to take all reasonable steps to ensure compliance with the conduct rules by their tenant or other occupant of their section, including employees, guests and any member of his family, their lessee or their occupant and also and to ensure that they do not behave in a way likely to interfere with the peaceful enjoyment of another section or another person’s peaceful enjoyment of the common property.
While owners must take reasonable steps to make sure their tenants behave, they are not responsible for their tenants’ breaches of rules or other wrongdoings. For example, if a tenant damages common property, such as crashing their car into the scheme’s gate, the body corporate should institute a delictual action against the tenant to reclaim the costs of repairing the gate, rather than making a claim against the owner landlord.
The Community Schemes Ombud Service Act, 9 of 2011 (“the CSOSA”) provides an easy and inexpensive route for the body corporate to follow to deal directly with tenants’ breaches of the rules or delictual actions. The CSOSA makes provision for specific requests for relief that deal with behaviour issues as well as the payment of specified amounts of money. While not all sectional title bodies corporate have fining provisions in their rules (essential for imposing valid fines) most do and the fine can be collected in terms of a CSOS order, if the tenant refuses to pay.
In the past it was common practice for trustees or the managing agent to hold owners directly responsible for their tenant’s misbehaviour and even fine them, but the requirements in the SMSTA and prescribed rules that owners “take reasonable steps”, removes the positive obligation of owners to ensure their tenants obey the rules. Additionally, the prescribed rules now require an enabling provision in the scheme rules for the body corporate to add fines to an owners account. The members would have to make a specific rule that allowed the body corporate to fine them for their tenants’ transgressions – highly unlikely to happen!
The new sectional title legislation makes it much easier for the body corporate to deal directly with misbehaving tenants and makes it harder to leave it to the owner to do.