Thinking Inside the Box

A Paddocks Sectional Title Lifestyle Blog

Amendment of rules by body corporate

paddocks_rules

By Dr Carryn Melissa Durham

The previous articles titled “Substitution of the prescribed rules by the developer” and “Substitution of the prescribed rules by the body corporate” addressed the process to be followed by the body corporate in substituting the scheme rules in terms of the Sectional Titles Act 95 of 1986 (“the STA”). In this article, I will discuss the amendment of the rules by the body corporate in terms of the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”).

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 1 and 2 of the Regulations made under the STSMA.

The body corporate has some flexibility in adopting new and different rules, subject to certain limitations. It may be that the body corporate wants to adopt rules that alter the effect of the participation quota in terms of section 11(2) of the STSMA. 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 three requirements for adopting such a rule:

  1. These rules can be adopted by a special resolution of the the body corporate.
  2. Where an owner is adversely affected by such a decision of the body corporate, their prior written consent must be obtained.
  3. The members of the body corporate may not make these rules until such time as there are owners, other than the developer, of at least 30 per cent of the units in the scheme.

The body corporate can also create exclusive use areas in the rules in terms of sections 10(7) and (8) of the STSMA. Such a rule can be incorporated in the management or conduct rules. Exclusive use rules must include a scale lay-out plan, 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 of common property is allocated. Other popular rule additions include fining; parking; renovation and alteration, and pet rules.

In terms of section 10(1) of the STSMA, 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 10(2)(b) of the STSMA states that no provision of the conduct rules can validly conflict with any provision of any prescribed management rules (“PMRs”). The STSMA 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 STSMA. The conduct rules are subject to the provisions of both the STSMA 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 STSMA.

Furthermore, the prescribed rules can only be substituted if they are in compliance with section 10(3) of the STSMA, namely that their provisions be reasonable and apply equally to all owners of units.

In terms of section 10(2)(a) of the STSMA the management rules can be changed by a unanimous resolution of owners. In terms of section 10(2)(b) of the STSMA, 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 chief ombud of the Community Schemes Ombud Service of any change to any management or conduct rule in the prescribed Form B in terms of section 10(5)(a) of the STSM Act. The chief ombud must examine any proposed substitution, addition, amendment or repeal and must not approve it for filing unless they are satisfied that the change is reasonable and appropriate to the scheme in terms of section 10(5)(b) of the STSMA. The chief ombud will issue issue a certificate if he or she approves the rule change in terms of section 10(5)(c) of the STSMA. No change to the management or conduct rules is effective until the date that the chief ombud issues the in terms of section 10(5)(d) of the STSMA. 

Would you like to have your scheme’s rules reviewed? Why not contact Paddocks at consulting@paddocks.co.za to assist you in this regard?

Image source: chaskacurlingcenter.com

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