Thinking Inside the Box

A Paddocks Sectional Title Lifestyle Blog

Can a Body Corporate Screen Tenants?

sectional title tenantsBy Jennifer Paddock

Letting agents are supposed to screen potential tenants from a financial perspective (credit history and current salary) as well as a security perspective (criminal records and the like). But there are many bodies corporate that are not happy with the ‘standard’ of some of the tenants in the complex and decide that the body corporate, through its trustees, should undertake its own screening of prospective tenants before they are allowed to move in.

The question is – can a body corporate do this?

The short answer is NO – not without first amending the body corporate’s rules to allow for this, and even then the enforceability of the rule is questionable!

The body corporate’s statutory authority does not extend to tenant selection, so unless a scheme’s rules include some provision that give it this power, it could not have that authority. Even in the event that the scheme’s rules are amended to allow for prospective tenant screening the rule may well be held to be unenforceable if challenged.

In 2008 the Durban Small Claims Court ordered the body corporate of Harbour View, a Durban block of flats, to compensate a flat owner for lost rental after it deemed a prospective tenant “shady and unacceptable” and refused to allow the family to move in. The flat owners sued the body corporate. The body corporate argued that the screening process, contained in the scheme’s rules, was the only way that the standards of the block could be upheld. The owners argued that bodies corporate had no right to screen tenants because a tenant’s relationship was with the owner or landlord of a unit, not with the body corporate. The court agreed with the owners and awarded the damages claim.

Despite being a Small Claims Court decision and therefore not binding on higher courts it could well be indicative of the way a higher court would handle such a claim.

In doing a bit of reading on this point I read an online article that said the Chief Registrar of Deeds has indicated that he will not accept an addition to a body corporate’s rules that gives the body corporate the authority to interview and decide whether prospective tenants should be allowed to move into a complex or not. However, as far as I know, the Deeds Office is no longer obliged to check additions or amendments to scheme rules so I doubt such a rule would be picked up when lodged at the Deeds Office.

The enforceability of a screening rule could be challenged by anyone inconvenienced by it and the person challenging the rule may well be successful due to the following factors:

  • all body corporate rules must be reasonable
  • one of the fundamental rights of ownership is to benefit from the fruits of one’s property, in this case rental – and any limit on that right would need to be properly justifiable
  • the body corporate has no right to interfere with a private contractual relationship between an owner and his tenant
  • the body corporate has the ability to uphold the standards of the scheme through enforcing valid rules relating to tenant behaviour

Do you manage any schemes with a rule like this? Would you like a rule like this in your scheme?

Share your comments with us below!

Image source: http://authorjenniferchase.com

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17 comments on “Can a Body Corporate Screen Tenants?

  1. Sumayya
    April 1, 2017

    Hello
    I’m a chairperson of trustees of a body corp. we want to include it in our house rules so as to prevent sub letting or owners/agents letting different parts of one unit to people totally unrelated to each other. i.e. Running a commune.

    • Paddocks
      April 4, 2017

      Dear Sumayya,

      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

  2. jresquival
    March 20, 2017

    That’s good to know that the law dictates all body corporate rules be reasonable. That way the owner’s rights are protected. I’ve been thinking about getting into property and renting, so I might have to consider a body corporate.

  3. Craig
    December 2, 2015

    I am being subjected to harassment by a body corporate because I reside next to the supervisor, she continuosly harasses my children and has pestered my landlord until he now has asked me to leave, she manipulates the body corporate to complain and fabricate lies about my children. They have asked my landlord not to renew my lease. What are my rights here?

    • Paddocks
      December 2, 2015

      Dear Craig,

      You do not have a legal relationship with the body corporate, but you are in a contract of lease with the landlord. I suggest that you contact the Rental Housing Tribunal.

      Kind regards,
      Paddocks

  4. Dovi Joel
    June 22, 2015

    Sorry to ask on such an old article. Can a rule be made only allowing the servant’s quarters to be rented out to domestic workers that actually work in the building?

    • paddocks
      June 22, 2015

      Hi Dovi, thanks for your question. We answer one question a day on our Facebook page for free. Please Like our Page on FB and re-post your question on our wall. One of our consultants should answer you within a few days. Thank you!

  5. camelot.windsor
    November 28, 2014

    Should the Body Corporate have agreed with that incorrect owner, the Body Corporate or the Trustees thereof would have every right to switch off electricity for non payment of levy & services.
    I like your Tenant Agreement clause. Owners should introduce their prospective tenants to the Trustees. Only manners to do so.

  6. Simon Monckton
    November 27, 2014

    Hi your comment about retirement complexes is not right. There is a separate act that applies to registered retirement complexes being the retired persons act as well as the sectional title act and that act allows a complex to specify minimum ages.
    With respect to screening of tenants, we do screen tenants and new buyers in terms of a clause contained within our sale agreement. Our legal advisers tell us it is enforceable as the person signed this when they bought the unit and had the option to decline to purchase if he was not prepared to forgo his rights in this respect. To try to overturn this he has to try to prove it was unreasonable even though he accepted the clause at the time of purchase or that he didn’t understand the clause which would be difficult or that he didn’t read the agreement which is no defence under our laws. The clause further compels the owner to incorporate the clause in any subsequent sale or lease.
    Our agreement also stipulates that any tenant must meet with the Trustees before they are allowed to take up residence. The main purpose of this is to ensure that tenants understand and agree to abide by the rules.
    We further built into the agreement that any lease is purely between the tenant and the owner and that the owner is always responsible for the payment of lights and water as well as the levies account. This has never been queried. I am at a loss to understand how an owner can expect to be able to rent out a unit to an unknown party and then make the Body Corporate a party to the agreement by obliging the BC to supply lights and water to his tenant at no risk to himself.
    I will be interested in comments from others.

  7. Wilna
    October 11, 2013

    Re retirement complex and screening: Some screen on age [not younger than 50 or older than 80], health [ even require medical certificate], church affiliation[ letter from pastor], proof of all finances.
    I think it is totally counter the constitution

    • Bill Jones
      October 11, 2013

      Regarding age, 50 is the standard limit of at least one resident. I cannot believe that there is screening for older than 80, health and even church affiliation. Financials are another thing between a tenant and owner and is acceptable but not for an HOA or Body Corporate Trustees unless I it is an institution etc.

      It is definitely going on in various retirement villages and is definitely unconstitutional. If I had a tenant or buyer wishing and willing to rent or buy my property and the HOA or BC told me I could not due to above, I would certainly take them to task through legal channels.

  8. Anne
    October 9, 2013

    How will the new Protection of Personal Information (once it is brought into effect) impact on the personal information, on owners as well as tenants, which is kept on record by a Body Corporate?

  9. Bill Jones
    October 9, 2013

    Hi Jennifer, this is an absolute minefield! Being the General Manager of a Retirement Village with a HOA and a Sectional Title the same question always arises. We must screen tenants, new owners etc. to see if they are medically fit to take ownership or tenancy!! Personally I cannot see how normal laymen, not being medically qualified can make such a decision and if they do is it legal in the first place, as you have mentioned.

    Dementia being the main issue here in all its forms such as Alzheimers. Where do you draw the line? I have had a request in writing from an owner of a Section thus..

    1.” No persons with Alzheimers or other mental Disorders will be admitted to the Assisted Living Apartments” (These apartments do have registered Section owners living in them)
    2. The Estate Agents, flat owners and medical staff must be notified that the apartments may not be let to such persons”

    This is a real issue as other owners may sometimes be affected by either medically challenged residents. I cannot see how the HOA or Body Corporate can stop the rights of owners by screening and stopping people from owning or letting property, even if it is written into the Constitution or Management Rules.

    This I believe must be taken further and more legal guidelines sort on this matter, including public comment.

    Regards

    • paddocks
      October 9, 2013

      Hi Bill,

      Discrimination on the basis of an illness (mental or otherwise) reeks of unfairness and unconstitutionality… I can see completely why this makes you uncomfortable. I wouldn’t go near such a rule with a barge poll.

  10. Anne Greening
    October 8, 2013

    Thanks. Clear as a bell!

  11. paddocks
    October 8, 2013

    Hi Anne. A letting agent is acting as an agent for an owner who has a direct relationship with the tenant. An owner is entitled to screen a tenant for his/her property and can delegate this right to a letting agent to do it on his/her behalf. A body corporate however, cannot (arguably) assume the right of an owner to screen his/her tenant. The owners may, through amending or adding to the scheme’s rules, give the BC this right, but the enforceability of the rule is questionable as I mention in the blog post. Hope that sheds some light!

  12. Anne Greening
    October 8, 2013

    If a Body Corporate may not screen tenants, is it legally defensible for letting agents to do so? Conversely, if a letting agent may screen tenants, why cannot a BC do so?

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