In a previous article “Substitution of the prescribed rules by the developer” I addressed the two circumstances in which the developer can substitute the scheme rules. In this article I will discuss the substitution of rules by the body corporate. It is possible for the body corporate to change the rules initially made by the developer or the prescribed management and conduct rules contained in Annexure 8 and 9 of the Regulations made under the Sectional Titles Act 95 of 1986 (“the Act”).
The body corporate has some flexibility in adopting new and different rules, subject to certain limitations. It may be that the body corporate want to adopt rules that alter the effect of the participation quota in terms of section 32(4) of the Sectional Titles Act 95 of 1986 (“the Act”). Such a rule has the effect that a different value is attached to the vote of the owner of any section, or the liability of the owner of any section, to make contributions is modified. There are two requirements for adopting such a rule:
- Section 32(4) rules can be adopted by a special resolution of the the body corporate.
- Where an owner is adversely affected by such a decision of the body corporate, his or her written consent must be obtained.
The body corporate can also create exclusive use areas in the rules in terms of section 27A of the Act. Such a rule can be incorporated in the management or conduct rules. Exclusive use rules must include a lay-out plan, to scale, on which it is clearly indicated the locality and distinctively numbered exclusive use and enjoyment parts, and the purposes for which such parts may be used. The rule must include a schedule indicating to which member each such part is allocated. Other popular rule additions include fining; parking; renovation and alteration and pet rules.
In terms of section 35(1) of the Act, the management and conduct rules are subject to the provisions of the Act and may therefore not be inconsistent with any provision of the Act. Section 35(2)(b) of the Act states that no provision of the Conduct Rules can validly conflict with any provision of any prescribed management rules (“PMRs”). The Act therefore establishes a hierarchy in which it is predominant and its provisions are inviolate. Its provisions prevail over any conflicting provision in either the Management or the Conduct Rules. The Management Rules are subject to the Act. The Conduct Rules are subject to the provisions of both the Act and the PMRs. The substituted rules can therefore only deal with issues that are lawfully within the jurisdiction of the body corporate’s control in terms of the Act.
Furthermore, the prescribed rules can only be substituted if they are in compliance with section 35(3) of the Act, namely that their provisions be reasonable and apply equally to all owners of units put to substantially the same purpose.
In terms of section 35(2)(a) of the Act the Management Rules can be changed by a unanimous resolution of owners. In terms of section 35(2)(b) of the Act, the Conduct Rules can be changed by a special resolution of owners. Unanimous and special resolutions can be taken by round-robin (in writing) or at a general meeting (including an AGM or an SGM), and there are special requirements for taking unanimous and special resolutions.
The trustees, on behalf of the body corporate, must advise the Registrar of Deeds of any change to any Management or Conduct Rule in terms of section 35(5)(a) of the Act and Regulation 30(7). In terms of Regulations 30(6) and 30(7) the notification must be in the prescribed Form V. No change to the Management or Conduct rules is effective until the notification has been filed at the appropriate Deeds Registry in terms of section 35(5)(c).
An amendment to Regulation 84 of the Deeds Registries Act 47 of 1937 was published in Government Gazette 38628 of 31 March 2015. This amendment altered the schedule of fees of the Deeds Office and requires the payment of R150 for the substitution, addition, amendment or repeal of Management and/or Conduct Rules as contemplated in section 35(5) of the Act. Finally, it is important to note that section 35(5)(b) states that the Registrar of Deeds is not involved in the enforcement or application of the rules.
Would you like to have your scheme’s rules reviewed? Why not contact Paddocks to assist you in this regard?
Article reference: Paddocks Press: Volume 11, Issue 03, Page 1.
Dr Carryn Melissa Durham is one of the most highly qualified Sectional Title lawyers in the country (BA, LLB, LLM and LLD), Carryn forms part of the Paddocks Private Consulting Division.
This article is published under the Creative Commons Attribution license.