31 Mar How to change body corporate rules and implement fines

The purpose of rules in a community scheme is to provide guidance on how residents, who share common facilities, must conduct themselves. Naturally, it is imperative that the rules are enforced in order to make them effective.

Before we look at how to enforce rules, let’s first distinguish between the types of sectional title rules.

Types of rules

Sectional title schemes have management and conduct rules as prescribed in the Sectional Titles Schemes Management Act no 8 of 2011 (STSMA) and these rules apply to all bodies corporate who have not made any amendments to their rules.

• Management rules provides specific guidance on how trustees should manage the scheme, how its meetings must be conducted, voting procedures at meetings, etc.
• Conduct rules deal with how residents and tenants must conduct themselves, including issues such as noise disturbance, being a nuisance to others, use of common property, etc.

Changing the body corporate rules

There are three ways in which rules may be changed or amended:

• The developer can change or amend the rules prior to the registration of the scheme. Only after the scheme has been registered, the members are allowed to change or amend the rules (at a special general meeting).
• Members can propose changes to the management rules and vote for them at a special general meeting. Voting is decided by unanimous resolution, as long as 80% of the members are present at the meeting and 100% of the members (present in person or represented by proxy) vote in favour of the proposed changes.
• Conduct rules can be amended or changed by special resolution. A minimum of 33,33% of the members must be present at the meeting and 75% of the members (present in person or represented by proxy) must vote in favour of the proposed changes.

Who decides if the rules can be changed?

Contrary to popular belief it is not the trustees that make changes or amend rules. Trustees (or members) may propose changes but members still need to approve the proposed changes or amendments at a special general meeting.

Imposing fines or penalties without registered rules

Once amended, all body corporate rules must be registered. After the body corporate has approved its new or amended rules at a special general meeting, the rules must be submitted to the local Community Schemes Ombud Services (CSOS) for review and approval.

The rules only become enforceable once CSOS has issued a certificate to the body corporate approving the amendments or additions.

The prescribed management and conduct rules do not make provision for fines or penalties to be charged to owners who are in breach of the body corporate rules. If a scheme’s rules does not include amendments to allow for fines and/or penalties, trustees are not allowed to charge fines or penalties to the owner’s levy account.

How to impose fines and penalties

Once the amended rules of the scheme have been certified by CSOS, the body corporate can start to enforce them in the scheme.

Owners who have breached the rules of the scheme are invited to a trustee meeting where they are afforded an opportunity to present their case and defend their actions.

If the person transgresses the rules again following the meeting, the trustees must provide the transgressor with a written warning that informs them that any further wrongdoing will result in a fine that will be charged to their levy account.

In the case of a tenant being the transgressor, the owner will be held responsible for the actions of their tenant and will be liable for any fine charged.

Fines are mostly imposed for noise disturbance, parking transgressions, storing of goods on balconies, etc. On the other hand, penalties may be imposed where owners built unauthorised extensions to sections or place structures on exclusive use areas that was not approved.

Under the Community Schemes Ombud Services (CSOS) Act, the body corporate and its members can approach CSOS to mediate any situation where they feel the other party has been unreasonable.

An owner may request CSOS to rule that incorrect procedures were followed in issuing a fine or penalty, or that it was issued unfairly. On their part, the body corporate may approach CSOS to rule that an owner must pay the fine or penalty charged in terms of the scheme’s rules.

Conclusion

While the prescribed rules contained in the STSMA provide a sound basis for the management of a scheme and the conduct of its residents, it remains up to the trustees and members of the scheme to add or amend relevant rules to ensure efficient management of their scheme.

Schemes that struggle with unruly residents will be well advised to amend their rules to include fines or penalties.