By Dr Carryn Melissa Durham

Dr Carryn Melissa Durham

In order for a penalty rule to be binding on the body corporate; enforceable and the fine recoverable must be entrenched in the governance documentation of the scheme. It therefore needs to be contained in either the management or conduct rules.

How to ensure a fining rule is valid in sectional title

The first step in ensuring that the provision will be enforceable is that it must be accepted by the body corporate. If is contained in a management rule it must be accepted by unanimous resolution. If is contained in a conduct rule it must be accepted by special resolution of the body corporate. Furthermore the rules must be filed in the Deeds Office to be binding on the body corporate.

The second step is that the penalty rule must be both substantively and procedurally reasonable and fair in order to be enforceable. Section 35(3) of the Sectional Titles Act 95 of 1986 (“the Act”) states that:

“Any management or conduct rule made by a developer or a body corporate shall be reasonable, and shall apply equally to all owners of units put to substantially the same purpose”.

In order for the penalty rule to be reasonable the imposition of the penalty in the form of a fine must have a legitimate purpose. The purpose of the penalty rule could generally be to prevent nuisance. Specifically it could have the purpose of preventing transgressions of the rules. The fining provision could be even more specific in listing examples of transgressions that are finable such as noise nuisance; parking on common property; washing hanging on the balcony; being in arrears with levies; and damage to common property.

The procedure that must be followed in imposing the fine must also be reasonably, fairly and equally applied to all owners and residents put to substantially the same purpose. Although a fining provision might give the trustees a discretionary power to institute a fine, the rule cannot provide that the trustees can deviate from any process. The rules cannot contain a provision that excludes the owners’ common law rights to natural justice and due process. Taking enforcement steps to deal with transgressions requires that the owner or occupier who is affected by the decision must be notified in writing and given an opportunity remedy the breach and to make representations at a trustee meeting.

The process of imposing a fine in sectional title

The procedure of imposing a fine is the complainants should be required to lodge a written complaint or incident report to the trustees or the managing agent. The owner and tenant should then be given a written notice of the particulars of the complaint in writing and a reasonable opportunity to respond to the complaint. The transgressor must be given sufficient information and adequate detail on the nature of the conduct as well as the specific sections of the Act or rules that were allegedly breached in order to defend him or herself against the complaint. The offender must be warned that if he or she persists with such conduct or contravention, a fine will be imposed. I suggest that the written notice should also include a reference to the rule allowing the fine to be imposed.

If the owner or occupier persists with the conduct, the trustees should send a second notice pointing out that the contravention is continuing or has been repeated and inviting the person to a trustee meeting at which the person can explain or defend their actions. The notice time of this meeting should be long enough for the person to prepare a defense. The rule must therefore include an opportunity and process for a hearing for the transgressor. The trustees must take into account any representations received or made by the owner. However, the opportunity for a hearing should be given before the fine is imposed. At the meeting the transgressor must be allowed to state their side of the matter, call witnesses in their support and cross examine any witnesses the executives might have to the transgression. The trustees should then discuss the evidence from both sides in the absence of the transgressor and witnesses; consider all the circumstances and make a final decision on whether or not to impose the fine.

Rules for imposing a fine in sectional title

The rule should also set out the amount of the fine for each example category of transgression. The trustees should, from time to time, at a trustees meeting determine the amount of the initial and subsequent fine. The members in the general meeting could then approve the amounts that are to be fined. The amount that is fined must also be set out in the warning notice and in the fine notice. The fine imposed must be a reasonable amount. This does not mean that the amount cannot be substantial. The amount must be proportionate to the purpose of the penalty.

It is important to note that an immediate fine without following the due process set out above cannot be imposed for any category of contravention. The penalty rule and fining procedure must always be reasonably, fairly and equally applied to all owners and residents put to substantially the same purpose. There will always need to be a warning letter and a hearing in order for the penalty procedure to be properly implemented and the fine to be imposed.

The fine imposed may not be added to the contribution which an owner is obliged to pay in terms of section 37(1) of the Act and claimed by the trustees as part of the monthly installments payable by the owner. Section 37(1) states that the purpose of the contributions to the administrative fund is to pay for the scheme’s expenses for maintenance of common property and rates and taxes. The duty to contribute to the fund in terms of section 37(1) cannot include the duty to make payment of fines. The fine must be paid by the owner or occupier separately.

Read Dr Carryn’s latest article on the topic: Can a body corporate impose fines? Fining rules in sectional title schemes?

 

Article reference: Paddocks Press: Volume 09, Issue 08, Page 5.

Dr Carryn Melissa Durham is Specialist Sectional Title Lawyer (B.A LL.B, an LL.M), currently completing her Doctorate in sectional titles. Carryn heads up the Paddocks Private Consulting Division. For more information please contact Nicole on 021 686 3950 or consulting@paddocks.co.za.

This article is published under the Creative Commons Attribution license.

Back to Paddocks Press – August 2014 Edition

12 Comments.

  • Erich Goosen
    09/06/2016 09:43

    A very well exposition on this thorny question.

  • Wesley Hanesworth
    08/08/2016 11:30

    Good day

    I have been having a lot of trouble with my Rental Agents and Body Corporate where we are renting.

    in February 2016 we signed a lease to a 3 Bedroom house in a small complex which we are paying R9500 per month. Since we have moved in we have endless hassles and inconveniences.
    We have had issues with the Landlord entering our flat to perform renovations without our written consent, after which 1 of our bedrooms was out of order for 3 weeks, one of our house mates had to sleep in the freezing cold Lounge in the middle of winter. We then had to argue with the Rental Agency and Landlord to convince them to re-imburse us for the room which was out of order, even after I sent them Legal documents stating that they needed to re-imburse us, their exact words where that the lease supersedes any of the documents that I provided them.

    Most recently I was washing my car with a bucket and i rinsed it with a high pressure hose with a special spray nozle and they sent me a fine. They said that it was against municipal regulation and complex rules to use a hosepipe when washing cars. I have looked through our lease agreement and it says nothing about washing cars and they never provided us with any complex rules when we signed the lease agreement and we have no signed copy. I phoned Johannesburg water and they said it is fine if I use a High pressure hose as long as it was not between 8am – 4pm and the hose has an automatic cutoff mechanism.

    Today I captured the Complex minder watering the garden with a hosepipe at 10:52AM on camera which is clearly a violation of the municipal regulations. How can they fine us but continue to break the rules themselves?

    Also in our 2nd Month in the complex my house mates car was stolen out of the complex, the gate was broken and our car was the only car missing in the complex.
    Our lease clearly states that the complex has “secure parking”. I asked the Agents to furbish a copy of the Complexes insurance policy to see if the car would be covered but they have not provided it. The gate was however repaired under insurance.

    I would like to move out and issue notice however I cannot afford to move right now but I cannot take this anymore… do I have grounds to sue the Body Corporate to cover my moving costs, or what can I do?

    • Wesley Hanesworth
      08/08/2016 11:41

      I would also like to add that the car was stolen the exact time the Complex scheduled renovations without our written consent. It happened on a Friday and that Friday we had a contracted construction company coming in and out of the complex to do Damp proofing on all of the units.

    • Paddocks
      22/08/2016 15:32

      Dear Wesley,

      Thank you for your comment. Please email us on consulting@paddocks.co.za with regards to your matter, and we can provide you with a no-obligation quote, so that we can assist you.

      Kind regards,
      Paddocks

  • Hi could you help regarding a fine issued that I feel might be invalid.

    We own a property in the Stallions, in the stable yard section of the complex. We have had tenants move in recently and they have had a cleaner come in, unfortunately she has put their mat over the banister to air on two occasions, which is breaking the conduct rules of the stableyard and the complex stallions rules, we have conceded that yes it is breaking the rules.

    The question I have is. The trustees have decided to issue a fine without a warning to us the owner or the tenants, they took a picture of the infringement and subsequently pit the fine onto our levy account and took the money, a month later they said we were being fined twice as we are governed by two sets of rules “The stallions” and “the stable yard. We have tried in vein to argue that we should have been warned first to allow us or them to tell their cleaner NOT to do what she was doing but as we weren’t, non of us knew she was doing what she was doing. Are they allowed to fine twice for the same infringement of rules and without warning?

    Many thanks

    Robin

    • Paddocks
      23/03/2017 15:56

      Dear Robin,

      Thank you for your comment. We are more than happy to help, however we do not give free opinions / advice. Please email us on consulting@paddocks.co.za with regards to your matter, and we can provide you with a no-obligation quote, so that we can assist you.

      Kind regards,
      Paddocks

  • Michelle
    02/06/2017 19:19

    Thank you for this information! I was just wondering if this information is still valid in 2017 and are all body corporates bound by these rules?

    • Paddocks
      22/06/2017 16:20

      Dear Michelle,

      The legislation changed on 7 October 2016, therefore all articles published before this date, would now be out of date.

      We are more than happy to help, please email us on consulting@paddocks.co.za with regards to your matter, and we can provide you with a no-obligation quote, so that we can assist you.

      Kind regards,
      Paddocks

  • Hi Michelle,
    We want to braai on complex and it is Heritage Day.
    Our Topnotch the management agents sent us notices they will issue fines to us if we do.
    I feel South Africa is a braai country.
    This is so unfair.

  • cheryl walters
    31/01/2018 16:32

    i manage a flat for a 80 year old lady – I requesed statements from Propell to be sent to me they never did – I kept on – they sent me a statement where they charged this lady R17.00 for posted notification on the 9th January, and gain on the 15th january and again on the 18th January ( all in one month – charging her R17.10 each time and R45.18 for a telephone call on the 25th January ?? their was a short payment of R180.83 that was all – I pay each month on the 3rd and i feel this unfair – and unjust – please let me know – they say they cannot reverse fines

    • Paddocks
      16/02/2018 21:45

      Hi Cheryl,

      Thank you for your question. We do not give free advice but here’s how we can help:
      – We offer consulting via telephone for R390 for 10 minutes. Please call 0216863950.
      – We have Paddocks Club, an exclusive online club, headed by Prof Graham Paddock, to help you get answers to your questions about community schemes: http://club.paddocks.co.za/
      – We offer a Free Basics of Sectional Title short course starting soon: http://www.paddocks.co.za/courses/free-basics-of-sectional-title/

      Kind regards,
      Paddocks

  • Great information!!! Thanks for sharing this informative article. I really enjoy reading this article.