BODY CORPORATE AND TRUSTEES RESPONSIBLE FOR ENFORCING CONDUCT RULES

Published: August 8, 2011Posted in: Sectional Title AdviceTags:

Once the trustees of a sectional title scheme have amended their conduct rules and lodged these with the Deeds Office the new rules (which must be reasonable and apply equally to all owners as specified by the Sectional Title Act) will then become enforceable on owners in the scheme.  The responsibility of enforcing these rules then rests squarely with the body corporate owners and trustees.

The question which arises all too often, says Catherine Cockcroft, sales manager of Propell, the levy funding company, is, “How do we effectively enforce these rules?”

“The steps to be taken to ensure compliance by owners should be set out clearly in the Conduct Rules and trustees should adhere stringently to these when informing the transgressors of the consequences which will face them should they continue to contravene them.

“Requests for reform should always be backed up by letters or emails and these should be kept on record so that should court action or arbitration ensue there is a clear paper trail showing what endeavours have been made to achieve a reform.

“Recalcitrant, non-paying or unruly occupants have to be kept in line.  Furthermore, it has to be realised that if the offenders are tenants, the body corporate is obliged by law to deal with the owner of the unit (not the tenant himself) to ensure compliance with the Conduct Rules.

“Owners who rent out sectional title units must be vigilant and screen tenants thoroughly – otherwise they could find themselves behind bars,” says Marina Constas-sectional title expert and director of BBM Attorneys.

Constas believes warning owners that they are not only responsible but could be prosecuted for their tenants’ misdemeanours is becoming increasingly necessary as more and more investors take advantage of the depressed property market to buy and rent.

“In many cases she says, where pressure is brought to bear on a landlord, he, in turn, deals effectively with his tenant.  If the correspondence leaves the landlord unmoved, the other option is to take the dispute to arbitration and cite the landlord or owner as the respondent. When the landlord sees that he is being dragged into arbitration, he may decide that it would be easier and cheaper to persuade the tenant to behave.”

In all cases firm action to ensure good conduct is absolutely essential and is “unquestionably” crucial to the success of the body corporate, says Constas.  However it frequently happens that trustees, knowing the cost of a lengthy legal action, will issue a few warnings and then simply retire from the conflict.  This lack of determination on their part can result in schemes losing their good name and in units decreasing in value – sometimes at an alarming rate.

However, says Cockcroft, where levy related problems are a cause for concern and the body corporate does not have the funds to subsidise the large sums often required for lengthy but essential legal processes needed to chase these up, the help of a “rescue” organisation like Propell can be invaluable.

Propell, after signing an agreement guaranteeing that the full levy roll due each month will be advanced to the body corporate on time, will then pursue all non-paying members – and South African law allows them once the legal process has run its course, to reclaim from defaulters all legal costs incurred in levy-related issues.

Propell’s involvement, therefore, says Cockcroft, relieves the body corporate of all the often crippling legal costs and ensures that the body corporate has the required working capital it needs.

“Time and again,” she says, “we have shown that once levy arrears and defaulting members are brought under control, unit values will once again escalate in a satisfactory way.  It simply does not pay to let these matters get out of hand, especially when the solution is available though companies like Propell anywhere in SA today.”