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Management, conduct and house rules
By Judith van der Walt

Every sectional title scheme is governed by a set of rules comprising management and conduct rules. If the developer does not make new rules when opening the sectional title register, the management and conduct rules prescribed by the Sectional Titles Act of 1986 ("the 1986 Act") automatically applies to the scheme. After the opening of the register, the members of the body corporate are entitled to amend the management rules by unanimous resolution and the conduct rules by special resolution. Subject to further procedural requirements imposed by the 1986 Act, the amendments to the management and conduct rules will only come become enforceable once the new rules have been filed in the scheme's register at the Deeds Registry where the register is held.

It is therefore clear that all management and conduct rules have to be filed in the scheme's register before they can be enforced, irrespective of the fact that they have been amended or adopted by unanimous or special resolution. The question now arises: what about house rules? Can the members of the body corporate make house rules?

It is quite a common occurrence to find a management rule (or a "Schedule 1 Rule") applicable to sectional title schemes registered under the provisions of the Sectional Titles Act of 1971 ("the 1971 Act"), empowering the trustees to make house rules. The scope of these house rules is usually limited to rules in connection with the health, safety and cleanliness of the common property. Any house rule which purports to deal with a section for example, is therefore not enforceable but house rules do not have to be filed in the scheme's register at the Deeds Registry to be enforceable.

The rules prescribed in terms of the 1986 Act do not empower the trustees to make house rules. However, there is no prohibition against empowering trustees to make such house rules but such power must be embodied in a new management or conduct rule. If trustees were empowered to make house rules under the 1971 Act, they are still entitled to so irrespective of the fact that the 1986 Act does not allow for it.

In many circumstances, house rules create confusion. The reasoning behind the obligation to file rules in the Deeds Registry is to make the rules freely available to any interested party. On inspection of the register, any interested party will be able to establish immediately what rules apply to the scheme. If trustees are empowered to make house rules they can adopt new house rules at their trustee meetings as they see fit without informing owners of the new house rules and without taking into account the views of a certain majority of owners.

I do not ever suggest to or encourage trustees to make house rules. I believe that the issues often dealt with in house rules are better dealt with in conduct rules. The process of adopting rules by unanimous and special resolution is more inclusive and transparent and encourages good governance in a sectional title scheme.

Judith van der Walt is an attorney, notary and conveyancer at Paddocks, a specialist sectional title firm operating throughout South Africa.

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