Rules restricting tenants in sectional title schemes

In today's post from Paddocks "Thinking inside the box" we look at the emotive issue of investors tenants in sectional title.

By Carryn Melissa Durham

There are two types of owners in sectional title schemes: those who reside in their units, and those who do not. The latter are investment owners who let their units out to tenants for rental income. There are various types of investment owners. It could be that a particular owner has various properties in various schemes, and rents the units out as his or her primary business activity for profit. It may also be that an owner has only one unit that is used to subsidise his or her income, or even that the owner is a retired person, that depends on the rental income. It is important that there be a sufficient market of rental property available, as not all persons are in a financial position to buy property.

I often hear that the tenants are the trouble-makers who breach the rules in sectional title schemes. It is true that the trustees must, on behalf of the body corporate, do all things reasonably necessary for the enforcement of the rules of the scheme. However, I am of the view that the body corporate should not discriminate against tenants and investment owners in the creation and enforcement of the rules.

The role of the trustees is to control, manage and administer the common property. The trustees should not unreasonably restrict or regulate the manner in which owners use their section. The trustees should not limit the proprietary rights of investment owners by restricting tenants’ rights too stringently in the rules. Here is an example to illustrate my point: an investment owner could be adversely affected if the scheme rules, in a scheme that is located in a beach town, restricts short-term letting of the sections. This would limit the rental pool of tenants that the investment owner could let the unit to, and make it difficult for investment owners to obtain the maximum rental for their section over the summer holidays.

Another example is that it would be discriminatory against tenant residents to have a rule that states that only owners may keep pets. Section 35(3) of the Sectional Titles Act 95 of 1986 (“the Act’) states that “any management or conduct rule made by a developer or a body corporate shall be reasonable, and shall apply equally to all owners of units put to substantially the same purpose”. This could be interpreted to mean that the rules only need to apply equally to owners, but I believe that in our South African constitutional context, it would be discriminatory to tenant residents to restrict them from keeping pets. Prescribed Conduct Rule 1 states that:
“(1) An owner or occupier of a section shall not, without the consent in writing of the trustees, which approval may not unreasonably be withheld, keep any animal, reptile or bird in a section or on the common property. (2) When granting such approval, the trustees may prescribe any reasonable condition. (3) The trustees may withdraw such approval in the event of any breach of any condition prescribed in terms of sub-rule (2).”

Based on the abovementioned model pet rule it is clear that both owners and occupiers are entitled to request permission to keep a pet. It is far more reasonable and inclusive to give all owners and tenants the opportunity to request trustee consent. The trustees should then apply their minds to the individual requests and consider the circumstances of each case. The fact that it is a tenant should be irrelevant in the consideration. The trustees can then impose reasonable conditions when granting their consent, and could always withdraw their approval when the conditions are breached.

Ultimately Prescribed Management Rule 69 states that the rules and the duties of owners in relation to the use and occupation of sections and common property are binding on owners, their lessees and other occupants of sections. It is the duty of an owner to ensure that his or her tenants and other occupiers, including employees, guests and their family members, comply with the rules. This is a partial re-statement of section 35(4) of the Act, which provides that a scheme’s rules “bind the body corporate and the owners of the sections and any person occupying a section“.

I suggest that the rules address the specific actions or behaviour, rather than to target the tenants with blanket bans or overly restrictive rules. To make a rule that unfairly restricts the tenants would, in my view, be inherently discriminatory and in conflict with the spirit and purpose of the Constitution.

Trustees Fiduciary Relationship With The Body Corporate

In this post from Paddocks (Thinking inside the box) we look at the importance of the legal and moral relationship trustees and the body corporate members.

Paddocks Article

Each trustee of the body corporate stands in a fiduciary relationship to the body corporate, and its members. Section 40 of the Sectional Titles Act 95 of 1986 (“the Act”), defines this important type of relationship by placing a fiduciary duty on the trustees to:

• Act honestly and in good faith;
• exercise their powers to manage or represent the body corporate, in the interest and for the benefit of the members of the body corporate;
• not to act without or exceed their powers as set out in the Act; and
• avoid a conflict of interest.

Trustees shall further avoid any material conflict between their own interests, and those of the body corporate. For example, in situations where a trustee may acquire a financial or any other type of personal benefit from a trustee decision, the trustee shall disclose their conflict of interest or potential conflict of interest, and recuse themselves from any decision, which directly or indirectly personally involves them. Where a trustee fails to disclose a (potential) conflict of interest, and it becomes known to the body corporate that the trustee has an undisclosed interest in the contract entered into, the contract may be voidable at the option of the members of the body corporate, unless a Court, upon application, orders that the body corporate is bound to the operation of the contract.

Should a trustee breach any duty arising from their fiduciary relationship to the body corporate, through their mala fide (fraudulent) or grossly negligent act or omission, they shall be liable to the body corporate for any loss suffered as a result by the body corporate, and any resultant economic benefit derived by them.

A trustee’s conduct does not constitute a breach of a fiduciary duty if the conduct was authorised (before or after) by the written approval of all the members of the body corporate, who are aware of all the material facts of the conduct.

In terms of Prescribed Management Rule 12 of Annexure 8 of the Regulations to the Act, the trustees shall be indemnified by the body corporate against all costs, losses, expenses and claims, which they may incur or become liable for, by reason of any act done or omission by them, in the discharge of their duties. This indemnification applies, except in so far as the act or omission was fraudulent or grossly negligent.

It is the duty of the trustees to pay the indemnity from the funds of the body corporate, or to ensure that there is fidelity guarantee in place, which will be used to refund any loss of monies belonging to the body corporate, or for which it is responsible, as a result of fraud or dishonesty committed by any trustee.

Rules to Govern Sectional Title Living

A link to the following article was submitted by owner: Bryan Barrath.  We discussed just inserting the link to the original article, but I decided to rather paste the Property 24 article in its entirety.  My fear is that 5 years the article will still be valid, but the link may not be.

24 Feb 2008

Here are the 10 commandments which need to be borne in mind when living in and/or owning a Sectional Title unit.

1. Respect your neighbours
You, your family and your guests must respect your neighbours – you are living in a communal environment, lots of people represent the security you want, but not all the privacy you have with a full title property.

Obey the Body Corporate's Conduct Rules (usually they are lodged with the Deeds Office), remember a complex is as good as its rules.

Complaints to the Trustees have to be in writing, if not in writing it is just a moan and nobody has time for moans.

2. Realise what you do not own
Exclusive Use Areas, sole use areas, the outside "skin" of your unit, (including the roof, outside walls and the foundations) the boundary walls, passages, elevator, gardens, car ports, parking bays are all common property.

All owners "own" common property in undivided shares.

You require written permission from the Trustees before making any changes to the common property. You may not mark, paint, drive nails or screws or otherwise damage or alter any part of the common property. You may install security gates and burglar bars provided the Trustees have first approved in writing the nature and design of the device and the manner of the installation.

Geyser and toilet overflows not only waste water, the water also damages the common property (especially in blocks of flats). Overflows must be attended to as soon as possible failing which the Trustees will have the problem fixed (and the damage to the common property) for your account.

Signs and notices also require written permission from the Trustees before they are placed on the common property, or in a unit if they can be seen from outside. Advise your security company that they may not place their sign until you have the required written permission.

You do own the inside of your unit and you are obliged by the Act to: 

- Repair and maintain it and not to use it or permit it to be used for such purpose as shall cause a nuisance to any other resident in the complex (see Noise).
- Not use the unit for any purpose that may be injurious to the reputation of the building.
- You are not permitted to make alterations that may impair the stability of the building, and; 
- You are to maintain your hot water installation, even if the geyser is outside the unit.

3. Noise
Noise is a nuisance and you, your children and your visitors may not be the cause of any nuisance to the other residents in the complex. 

Owners beware, you are responsible for the behaviour of your tenants and you may well be fined by the Trustees for the noise your tenants make (should there be a rule on Noise).

Noise is covered in the Environment Conservation Act of 1989 (should you wish to lay a charge privately), and it defines two types of noise a) Disturbing noise and b) Noise Nuisance.

Noise nuisance "means any sound which disturbs or impairs or may disturb or impair the convenience or peace of any person". This covers all noise e.g. Barking dogs, machine noise, vehicles, garden implements, etc. There is a fine not exceeding R20k and/or prison for not more than two years if they are found liable on conviction.

4. Pets
The Sectional Titles Act Conduct Rules requires you to get written permission from the Trustees before you bring a pet onto the complex. Beware that some complexes have banned cats or dogs or pets in general by amending their rules and having them lodged at the Deeds Office for their Body Corporate. 

Once you have the written consent to have an animal the animal may not be a nuisance to other residents, if it does the Trustees can withdraw their consent and you will have to find alternative accommodation for the animal.

Dogs on the common property must be on a leash at all times and the owner of the dog is responsible for picking up the excrement. All dogs must have licenses.

5. TV aerials/satellite dishes
The Sectional Titles Act Conduct Rules require you to obtain written permission from the Trustees before installing your aerial on common property. See number 2.

The aerial must not be installed in front of the townhouse as this affects the harmonious appearance of the complex. Request the installer to run a cable around the side and install it in a less prominent spot.

When leaving the complex you may take the dish but the bracket must remain for the next resident to use, this way damage to the common property is minimal. Any damage to the common property will be fixed by the Trustees for the owner's account.

The appearance of your unit from the outside is very important – you are not permitted to keep anything outside your unit which is not in keeping with the appearance of the complex e.g. rubbish kept on balconies, old washing machine on your front lawn. 

6. Fire safety
Fires don't happen very often but you still need to analyse the situation you are in and have a plan of what to do if this should ever happen.

Ask yourself: is there a fire hazard in my unit? If there is be sure to advise your family of it. Check the exterior of the building too.

In big blocks of flats the Trustees need to have a plan of what to do if there ever is a serious fire e.g. How to advise everyone that there is a fire? Have the fire extinguishers been serviced every year? The hose reel, is it working or has it rusted up with non use over the years? Are the emergency exits locked without keys available? Will the fire engine get through the gates? Is there a fire hydrant for them to use?

Ask the Fire Marshall to visit your complex to check it out for fire safety and give you recommendations.

Residents may not store any material which is inflammatory e.g. petrol. Do not commit any "dangerous acts" in the building or on the common property which may increase the Body Corporate's insurance premium.

7. Refuse and cleanliness
You are responsible for taking your refuse to the refuse area and placing it in the container provided. Your kitchen refuse must be placed in plastic bags; tins must be completely drained so that the bag will not leak.

Your unit must be kept free of bugs, including borer beetles and cockroaches – these must be eradicated immediately to stop them affecting the entire complex.

Littering in the complex is not permitted! This includes any rubbish, soil, cigarette butts, food scraps or any litter whatsoever.

Exclusive Use Areas allocated to you have to be kept clean and tidy.

Laundry – you are not permitted to hang washing on any part of the building or the common property so to be visible from outside the building or from any other unit, i.e. no washing to be hung on balconies (use the washing lines provided).

8. Vehicles, parking and speeding
Vehicles: You are to ensure that you and your visitors vehicles do not drip oil or brake fluid onto the common property and no one is allowed to dismantle or do major repairs to vehicles on any part of the common property including Exclusive Use Areas.

Speeding: Town house complexes are for families and that means there will be children playing or just walking in the streets – you have no right to endanger their lives by driving at speed to and from your unit. If you get there or to the gate a minute later, how will this change your life? What will change your life is killing or maiming someone's child.

Parking: You may not park any vehicle on the common property without the written consent of the Trustees (this does not include your allocated parking area). The Sectional Titles Act Conduct Rules allow the Trustees to have vehicles towed away at the risk and expense of the owner of the vehicle.

9. Security
They say a chain is as strong as its weakest link and so it is with security in a complex. The residents that open the gate/door for someone they do not know, the driver that drives off before the gates are closed will always be the weak link in even the most expensive security system.

Realise that your actions may lead to your unit being robbed or your family or another resident being robbed, raped and/or murdered – do you want this on your conscience? 

Your family and maid need to be instructed not to buzz strangers into the complex and to be vigilant when seeing strangers in the complex. Do not give all and sundry the code to get in. 

Be responsible, these are trying times we live in and security is everyone's concern, so don't blame your Trustees.

10. Owners 
Body Corporate Levies: Your monthly levy is the lifeblood of the Body Corporate so pay your levy! The levy is payable in advance due on the first day of each month. 

Letting your unit: The Rental Housing Act obliges owners to make the Conduct Rules a part of your lease agreement. Remember you are responsible for their behaviour. Try to match your tenants with the residents in the complex, if they fit in with their peer group they will be happier, be good tenants and stay longer.

AGM: Attend the annual general meeting, it is the least you can do for your investment. 

Trusteeship: Volunteer to become a Trustee and have a say in the running of the complex.

Trustees' meetings: You are permitted to attend so attend as often as you can.

These "10 Commandments" are by no means complete, but they do cover most of what the owners' and occupiers' responsibilities which are detailed in the Sectional Titles Act of 1986 and the Management and Conduct Rules. 

Each Body Corporate is unique and Conduct Rules need to be fine tuned to suit your scheme's circumstances e.g. if there is a pool in the complex this represents a danger to young children - you therefore need a rule to disallow children in the pool area without adult supervision. You are also required to have a child proof gate on the entrance to the pool enclosure and insurance companies insist on indemnity signs as well as signs detailing the depth of the pool, etc.

You can imagine the huge cost to the Body Corporate if a child dies of drowning (or by a freak accident) and it is deemed by the courts that it could have been prevented had the Trustees applied their minds to the risks inherent in the scheme. – Les Reynard

Readers' Comments 
I have a question with regards to the erection of signs and notices. I am aware that if I, as the owner, wish to put up a noticeboard on my outside wall, then I need written permission from the Trustees before they are placed on the common property, or in a unit if they can be seen from outside. 

However, can the Trustees erect any noticeboard on anybody's walls without consent from the owner?
The legal intent of the clause in the Sectional Title's Act is there to prevent owners from defacing the outside walls of the property, which would go against the aesthetical objectives of the complex. 
However, this clause does not give Trustees carte blanche to do as they please on your wall?

It is posing a security risk, since people are loitering outside our property while reading the noticeboard. It is also a security risk, since people can 'validly' look around the property. 

Please advise - Anne Stanton

This is an interesting one. I wish you had told us what the sign was about.

You are correct in that owners require written permission from the Trustees to put up a sign on common property - the Trusees cannot give written permission to themselves, however I would request the minutes of their meeting where this was discussed and resolved.

Trustees require to have meetings and to agree on resolutions by a majority vote - did this occur? Or is it just the Chairman doing his thing?

Firstly, you need to complain to the Trustees in writing (at the same time request to have a copy of the minutes of their meeting) and request you be at their meeting when they discuss your corrospondence. In this way you can be interactive with them and hopefully get them to move the sign.

Finally, if is proves to be a security risk you can always declare a dispute in terms of Management Rule 71 and ask for the matter to be taken to Arbitration. Good luck. - Les Reynard

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Living in a Sectional Title Scheme

Considering the number of sectional title schemes in the greater Table View/Blouberg area, it is astonishing to find how few people know anything about the Sectional Titles Act.

In my humble opinion if you live in a sectional title scheme; be it as a tenant or owner, you should at the very least, be familiar with the conduct rules of that scheme - having a copy of the management rules on hand for reference wouldn't hurt either.

In this post we will take a look at the pros and con's of living in a sectional title scheme.

The Pros

• First on the list has to be a sense of security from living in a close, and often gated community.
• Buying into a scheme is usually cheaper than buying a free standing home, because the cost of maintaining the common property is shared by all the owners.
• There is a greater sense of community living in a sectional title scheme.
• When you buy into a sectional title scheme you automatically become a member of the "Body corporate" this means you have a say as to how the common property is managed/maintained. The Annual General Meeting gives owners the opportunity to have their say in the affairs of the body corporate.
• For investors, buying into a sectional title scheme, means not having to maintain the whole property as they would in a freehold property. The common property is maintained by the trustees of the body corporate.

The Cons

• In order for people to live harmoniously in a close knit community there has to be rules. These are called:  "The conduct rules".
• The outside walls of your section are common property, this means that, before you decide to mount a satellite dish - you need to gain permission from the body corporate trustees, through the managing agent.
• Before taking occupancy of your new home, you need to apply to the body corporate to keep a pet. This is again done by writing to the managing agent.
• You may think that having a braai with friends is no ones business but yours, however, if your braai smoke drifts into the unit next door, you are breaching a conduct rule the states that you can not do anything that causes a nuisance to other members of the body corporate.
• Before undertaking any alterations in your section you again need to apply in writing to the BC through the managing agent. This is to ensure that the integrity of the building is not compromised.

Generally speaking living in a sectional title scheme realy does require equal measures of consideration and tolerance - Its not for everyone - but for people who enjoy community living. Its a fulfilling lifestyle.

Projects 2012

Lighting Upgrade
After the "crow-bar" burglaries in the last quarter of 2011, a decision was taken to upgrade the existing lights in the park.  The trustees' considered various options and decided that we could accomplish two objectives in one operation.  "Improve the lighting and save on energy costs".

All the existing light fittings of the street lights in the complex were replaced and fitted with 45 Watt energy saver  fluorescent globes. In addition to this, two new street lights were installed to improve the illumination on the Birkenhead Road side of the complex. The existing complex garage lights were also replaced.

The new energy saver lights achieve a much better penetration and brightness. The picture below shows the illumination behind units 13 - 24.

Click  image to enlarge

Garage door painting
The main garage doors were beginning to look shabby, especially the North facing doors. So we took the decision to repaint them. The side pedestrian doors were also in need of a freshen up, so they were added to the project as were the wooden garden gates.  The idea behind the colour we chose, was to try and get close to the bronze colour of the existing aluminium frames used in the complex.

There was a need for some minor repairs to doors and gates; these repairs have now been completed.  The painting is nearing the half way mark, at the time of posting this article.  Our painting contractor is planning to complete the project by the end of May; weather permitting.  The trustees would like to thank owners and residents for their cooperation during this exercise.  You are helping us to enhance your property.

Unfortunately, we did have one resident threatening to shoot anyone who came into his yard, and another who argued that he was perfectly happy with his garden gate in it's then state of disrepair. Fortunately this only amounts to 2.22% of the Rietvlei community, so we are optimistic that the balance of the project will go off without to much fuss.

Our vision, is to maintain the excellent reputation we have with residents of the Table View and Flamingo Vlei areas, for keeping our complex neat and well maintained.  By doing this, we retain our status as being a worth while investment and a sought after address.

Our Beautiful Park

As the title implies, we live in a beautiful and unique sectional title complex.  I say unique because it boasts wide open spaces which have become quite rare nowadays.  In this post I want to appeal to all residents and non-resident owners to contribute to the beauty of our park, by ensuring that the exclusive use areas are; at the very least, kept clean a neat. The Sectional Title act requires the following:

PART IX ‐ Owners, Administrators and Buildings, Sections 44‐51
   44 Duties of owners
       (1) An owner shall‐

        (c) repair and maintain his section in a state of good repair and, in respect of an exclusive use area,           keep it in a clean and neat condition;

I know some owners have received letters with regard to EUA's and sometimes it may seem that the letter has an abrasive tone.  For first time recipients of this type of letter, please understand that our intention is merely to bring your attention to the issue.  Keep in mind though, there are repeat offenders, so the letter is a standard template designed for administrative efficiency. It is also worth noting that the word "Shall" in the eyes of the law means non-negotiable. Under the act the trustees are charged with the responsibility of enforcing the rules. (see excerpts from the act below):

PART VIII ‐ Rules and Bodies Corporate, Sections 35‐43

35 Rules

38 Powers of bodies corporate

The body corporate may exercise the powers conferred upon it by or under this Act or the rules, and such powers shall include the power‐

(j) to do all things reasonably necessary for the enforcement of the rules and for the control, management and administration of the common property.

...and also:

The Functions, Powers and Duties of Trustees, 25‐49

28. Statutory and General Duties

(3) The trustees shall do all things rereasonably necessary for the enforcement of the rules in force.

Given the fact that urban decay is very evident in sectional title blocks along the Blaauwberg Road, the trustees of Rietvlei Park have to take their responsibilities seriously. If it weren't for the efforts of the trustees, our wide open spaces could easily become an eyesore for all the residents of Table View.

Non-resident owners with tenants in their units must understand that we are protecting their investments. They can assist us in keeping the property well maintained, by ensuring that their tenants comply with the neatness duties.  The picture below is of a unit which is occupied by tenants. Fortunately it is not seen from the roads around the perimeter of the property. However, the residents surrounding this unit; including myself, do look on to it.

Click to enlarge

To all members of our sectional title scheme, we thank you for your cooperation and look forward to your continued support in the coming year.

Photo Gallery

Hi all, While enjoying the beautiful vista's that our complex has to offer, I had the idea of developing a photo gallery (of sorts).  So, I walked around with my camera on a misty morning and captured a few pictures from various vantage points. The next step was to head for my computer and create a photo blog. I then uploaded the pictures and that, as they say was, that.

Click here to view the start up selection. Hopefully there are photographers in the complex who would also like to add pictures. If so, pop me an email to rietvleiparkbc@googlemail.com and we will add new pictures.