Sectional Title - Living by the Rules

So youve just moved in and settled down in your favourite couch ready to plan a little house-warming party. Sounds great, what can we bring? But before you start drafting your guest list, priming your sound system and allocating parking areas for your guests, its crucial - whether youre a tenant or owner - to check your complex conduct rules before transforming your peaceful living space into a war bunker.

First of all, its very important to know that a tenant may only be represented through his/her relevant and registered owner of the unit, as the Body Corporate does not normally enter into correspondence with a tenant. It is essential to realize that there are two types of rules within a complex:

  • Management rules - which determine how the complex is governed
  • Conduct rules - which determine how the residents should behave

The conduct rules play a vital role in determining the harmonious lifestyle within a complex and when these are properly implemented, they can be very effective. The Trustees - duly elected by the Body Corporate members at an AGM - are given the onerous task of implementing, and in some cases enforcing the rules. The most ideal situation is obviously if Trustees can play a pro-active role in their duties. However experience shows that when an individual is taken to task, the defence mechanism is usually that of a counter attack. This sometimes results in Trustees having to be more dictatorial in order to achieve their goal. The very real danger lies in a complex having a weak and ineffective Board of Trustees, which will inevitably result in the deterioration of the complex and ultimately the loss of a healthy property investment.

The tenant (not the owner) of the unit often makes a representation directly to Trustees, who in turn often respond. However the correct channel for a tenant to lodge his/her concern is through the owner of the unit, as it is the owner themselves who would direct the concern to the Trustees. It is normal practice for Trustees only to correspond with the registered owner, considering the legal entity they have recourse over.

The ideal situation for new complexes would be for the developer to seek advice from an attorney involved with sectional title legalities. Alternatively, another option would be to source a reputable managing agent in order to draw on their experience in establishing rules to best suit the environment that the developer was originally trying to create. It must be stressed that this window of opportunity closes with the registration of the first unit. After which the statutory conduct rules contained in the Sectional Titles Act become effective. To change these statutory rules requires a "special resolution" from the members of the Body Corporate (these being the unit owners, not the tenants) and relevant Sectional Titles Act procedures then being followed. The procedure usually goes along the lines of Trustees (or the owners) recognizing that the rules are not specific enough for the unique makeup of their complex. Trustees would then draw up new list of conduct rules, circulate a draft to all the unit owners and invite their input, usually limiting the time for a response. Once all the amendments have been made, the Trustees will then circulate this final draft with 30 days notice to convene a special general meeting and with the required quorum and votes being achieved, theyll register the amendments with the Registrar.

Trustees have a duty to act in the best interests of the complex at all times and it goes without saying that they should set the example. If a member of the Body Corporate feels that an individual - regardless if he/she is a Trustee - is behaving outside the conduct rules, they are fully entitled to make a written representation to Trustees. Trustees would then be obliged to discipline their own if required.

The practice of dealing with an unruly resident varies from one Body Corporate to another. The most common procedure follows the same rules of baseball three strikes (offences) and you're out. In any situation, we must first assume that the affected parties have not been able to amicably resolve their differences and have brought the situation to the attention of Trustees. The Trustees or their agent usually sends the first written warning to the registered owner that some transgression has taken place and request that it be resolved. The second written warning will be firmer and usually advises the owner that if the situation is not resolved within a required time period then the Trustees will take further action, usually through the legal council. Depending on the severity of the transgression, the third and final warning might be from Trustees themselves or from their attorney, advising the owner that the situation has not been resolved and they demand that the matter be taken to arbitration. Owners who are in breach of the rules must be aware that the administration and legal costs will be recovered from them as to when they are raised.

Assuming the owner feels that he/she has been unfairly treated or victimised, he/she will, for the large part, use the same procedure as mentioned above. After exhausting the procedure of writing to Trustees, he/she would need to seek the advice of his/her own legal council; remembering of course that the body corporate will defend Trustees, and should the owner be unsuccessful in his/her action, will thus have to pay these costs as well. It must be understood however that if Trustees did not have indemnity from the members, it would be virtually impossible to find Trustees prepared to take on this role in the first place. Owners should ensure that they receive sound advice before embarking on any unnecessary legal action. Emotions aside and the best interests of the complex being paramount, very few issues should become legal disputes if at all.

 

(Many thanks to Bruce Crichton, Kensington Property Services for his valuable input)

Courtesy SA Complex News

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