- Scheme rules must comply with the Sectional Titles Schemes Management Act and its prescribed rules.
- Old house rules may no longer be enforceable where they were not properly incorporated and registered.
- Unregistered rules and policies, including trustees’ circulars, cannot simply create new enforceable obligations.
Sectional title schemes in South Africa are undoubtedly governed and regulated by current statutes and the common law.
Quite frequently, disputes arise in schemes based on the interpretation of the laws, including a scheme’s rules. However, there is the further aspect of whether or not a rule can be enforced in a scheme on the basis of its registration and validity.
The Sectional Titles Schemes Management Act 2011
Section 10 of the Sectional Titles Schemes Management Act 8 of 2011 recognises that a scheme may have its own specific management or conduct rules which are enforceable given that such rules are registered in the Deeds Office or with the Community Schemes Ombud Service.
It is of note that rules can only be lodged with the above bodies after an appropriate resolution has been passed by the corresponding body corporate, with the correct procedure adhered to for taking the resolution.
Such rules may only be enforced after confirmation is received from the Deeds Office or the Ombud that it has been registered therein. Conversely, there are several circumstances where a scheme’s rules can become an issue for enforcement.
Incompatible rules
The Sectional Titles Schemes Management Act 2011 created Prescribed Management Rules and Prescribed Conduct Rules under its regulations, commonly known as the Sectional Titles Schemes Management Regulations 2016.
These prescribed rules must be complied with, in addition to the scheme’s own registered rules. If a scheme has a rule that is incompatible with the above prescribed rules, then the prescribed rules prevail, irrespective of whether or not the scheme’s rule is registered with the Deeds Office or the Ombud, as the Sectional Titles Schemes Management Act 2011 takes precedence.
House rules
Under the original Sectional Titles Act 1971, there was a provision for what was called “House rules”, alternatively referred to as “Schedule 3 rules”. These were an additional schedule of rules separate from a scheme’s management and conduct rules that were entirely created by the trustees and were intended to supplement the existing rules.
Unfortunately, house rules gave exclusive power to the trustees to establish them without the input of the body corporate. As a result, these types of rules were removed as a category of acceptable rules.
Under the subsequent Sectional Titles Act 1986, only management and conduct rules were allowed. Consequently, a lot of older sectional title schemes consolidated their house rules with their conduct rules and registered them as such in the Deeds Office.
For the schemes that did not register any amendments, their body corporate cannot enforce any house rules as they are no longer recognised, nor can they be created as a type of rule under the current legislation.
Unregistered ‘rules’
Similarly, any types of rules or policies in a body corporate that are neither registered nor prescribed rules in terms of the Sectional Titles Schemes Management Act 2011 or its 2016 Regulations cannot be enforced in a scheme.
Typical examples include trustees’ circulars attempting to create new rules for a scheme without the appropriate body corporate resolution passing a rule to be registered with the Deeds Office or Ombud.
Therefore, the golden rule is that if a “rule” is not registered with the appropriate body or compatible with the Sectional Titles Schemes Management Act 2011, then it cannot be enforced within a scheme.
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