Thinking Inside the Box

A Paddocks Sectional Title Lifestyle Blog

The body corporate’s responsibilities and duties regarding scheme rules

Rules_0

By Anton Kelly

When talking about the rules in sectional title schemes, it’s important to understand what constitutes the rules that apply.

The rules of a sectional title scheme are defined as the management and conduct rules referred to in section 10 of the Sectional Titles Schemes Management Act, 8 of 2011 “the Act”. The Act refers to the rules “as prescribed” because they are annexures 1 and 2 to the regulations made under the Act.

Understanding that the rules are the prescribed management and conduct rules is important because the Act specifies how these rules can be changed and added to, and by whom. Initially, the developer of the scheme can change certain of the prescribed management rules and all of the conduct rules, and add any appropriate rules that are not in conflict with the prescribed rules or the Act. Subsequently the body corporate can change or add rules by taking the required type of resolution and having the amendment to the rules approved by the Ombud. The trustees and the managing agent cannot make rules.

The Act and prescribed rules require increased transparency and accountability in the body corporate’s management of the scheme, and one of these areas concerned is the body corporate’s duties regarding the rules, and there are several!

If the body corporate amends the rules, it must lodge the amendment with the Ombud as soon as possible, but no later than 10 days after the resolution was taken.

The body corporate must keep a copy of the rules; it must have a copy available for inspection at both trustee and general meetings; it must deliver a copy of the rules to every person who becomes an owner or an occupier of a section; it must deliver to owners a copy of any rules added, amended or repealed; and it must deliver a copy to any owner on their request or on the request of a person authorised in writing by an owner.

Additionally, the body corporate’s copy of the rules must include an index and a prominent reference to any rule that grants exclusive use rights, alters members’ voting rights or liability to pay contributions, or places a financial or maintenance obligation on members.

If any rules are added, repealed or amended, the body corporate must include the changes in its copy of the rules.

Owners, registered bondholders and any person authorised in writing by an owner or registered bondholder may make a written request to inspect the rules or for a copy of the rules, and the body corporate must make the rules available for inspection or provide the copy within 5 days of the request, and may not charge for the inspection or copy.

These duties, properly performed, will ensure that the rules are always up to date and that everyone who is bound by the rules knows what they provide. That will surely make for smoother running of sectional title schemes.

Image source: taxsutra.com

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