By Carryn Melissa Durham
I often get asked questions about house rules. Recently a question was posted on the Paddocks Facebook page:
In this blog post I will discuss the issue of whether “house rules” made by trustees are valid and enforceable in sectional title schemes.
It often occurs in practice that pre-existing Schedule 1 rules made under the Sectional Titles Act 66 of 1971 (“the 1971 Act”) contained a provision entitling the trustees to make house rules. These rules were not filed at the Deeds Office and dealt with the health, safety, control, use and cleanliness of the common property.
Professor Graham Paddock addressed this issue in a Paddocks Club video (with acknowledgement to Professor CG van der Merwe). Their view is that these rules did not become part of a scheme’s management rules when the Regulations under the Sectional Titles Act 95 of 1986 (“the Act”) came into operation on 1 June 1988. There are various reasons for this view.
Section 35 of the Act sets out a strict procedure for when management and conduct rules may be substituted, added to, amended or repealed. This provision governing management and conduct rules has created a system of checks and balances that precludes the circumvention of these rules by allowing the trustees to make rules for the control and management of the scheme.
The body corporate exists and the trustees hold office under the Act and their powers are derived either expressly or by necessary implication from the provisions of the Act and the regulations. Since there is no provision in the Act or the regulations, which gives the body corporate or the trustees the power to make house rules, they do not have such power.
The fact that the rules prescribed under the 1971 Act only remain in force to the extent that they are not incompatible with those prescribed under the Act suggests that the legislature wanted to create a template for scheme rules which could not be deviated from easily.
There are two considerations with regard to enforcement of the rules. Sections 35(4) and 38(j) of the Act both state that the body corporate are responsible for the enforcement of the management and conduct rules and for the control, administration and management of the common property for the benefit of all owners. The trustees cannot make and enforce rules regulating the use of a section. Furthermore, the body corporate is expressly empowered to enforce the management and conduct rules. This cannot be construed to confer similar powers in respect of house rules. These rules are therefore not enforceable.
It is often argued that these house rules (also referred to as “trustee directives”) shall only provide directions as to the practical application of a conduct rule. It is my view that trustee directives or house rules will often be regulatory or restrictive in their nature, and should be dealt with in the management or conduct rules. Furthermore, trustees do not remain in office indefinitely, and the mood or feeling will change from one set of trustees to another.
The process of adopting rules by unanimous or special resolution means that the owners are included in the decisions as to how the scheme is governed. The obligation to file management and conduct rules means that they are publically available. If trustees make rules that are not filed there will be a lack of transparency which could lead to confusion as to what rules are applicable to the scheme. It is for these reasons that I do not recommend any management or conduct rule that allows for the trustees to make house rules.
I must note that people often refer to house rules when they actually mean the conduct rules that are filed at the Deeds Office in terms of section 35(2)(b) of the Act, and which are enforceable. This mistake in terminology could be due to the fact that the Rental Housing Act 50 of 1999 requires that the landlord must ensure that a copy of any House Rules applicable to a dwelling must be attached as an annexure to the lease. The Rental housing Act defines “House Rules” to mean the rules in relation to the control, management, administration, use and enjoyment of the rental housing property. In the context of sectional titles this will include the management and conduct rules in terms of section 35(2) of the Act.
Image source: lifenotes.lifelettercafe.com
Filed under: Legal, Lifestyle, management, Meetings, Mindful living, People Tagged: Carryn Durham, conduct rules, deeds office, house rules, management rules, regulations, sectional title rules, sectional titles act, sections
