A Paddocks Sectional Title Lifestyle Blog
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:
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!
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