- Trustees sent conduct rules to the Ombud Service even though body corporate members had not approved them.
- The court decided the trustees acted without a proper mandate from the community scheme.
- The conduct rules were declared invalid and no longer have legal force.
The High Court in Pietermaritzburg has ruled that the conduct rules of the Jinbara Scheme are invalid. The court found that the trustees sent these rules for approval without being given authority by the body corporate.
This dispute started when Awande BC Properties bought a unit in the Jinbara sectional title scheme in Zimbali South as a rental investment. The company later found out that short-term letting was apparently not allowed under the conduct rules approved by the Community Schemes Ombud Service.
Awande challenged these rules after discovering that body corporate members had not approved them before they were sent to the Ombud Service.
How the dispute unfolded
Judge Mngadi found that on 17 February 2022, a special general meeting decided that new conduct rules would be created. These would be considered for approval and registration at the next annual general meeting in April 2022.
Even so, trustees sent their proposed conduct rules to the Community Schemes Ombud Service, which approved and registered them on 31 March 2022. This happened before the annual general meeting took place.
The court found that the trustees acted without a mandate from the body corporate. Judge Mngadi explained, “The trustees, in submitting in March 2022 conduct rules to the Ombud for approval and registration, acted without the mandate of the body corporate.”
The court also found that changes suggested by the Ombud Service were added to the conduct rules even though body corporate members had not approved these changes through a special resolution.
Approval declared invalid
Judge Mngadi found that the trustees went against the decision made by the body corporate and did not have the authority to submit the conduct rules for approval and registration. “Since they had no mandate, what they purported to do was of no legal significance,” the judge said.
The court held that there were no conduct rules properly before the Ombud Service for approval and registration. Judge Mngadi said, “The purported approval and registration are of no legal significance. It is a nullity.”
The appeal succeeded, and the conduct rules registered on 31 March 2022 were declared invalid. The court ordered the body corporate to approve and submit new conduct rules as required by law. Until new rules are in place, the scheme will continue under the rules set out in the Sectional Title Schemes Management Act regulations and the Zimbali Estate Management Association rules.
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