My intention is to provide a newsletter which will include an article on an important subject, as well as a few other interesting snippets. I hope that this information is of value to you. Please feel free to pass these articles on to your family and friends.
RULES: The Necessary "evil" to Ensure Peaceful Living in Communal Property Schemes
RULES: HOW, WHAT, WHEN – VARIOUS KINDS OF RULES IN SECTIONAL TITLE AND HOME-OWNERS ASSOCIATIONS
As there are usually a very superficial understanding of rules, I will discuss the different kinds of rules, their functions and their origins.
The origins of rules are very different for sectional title and home-owners associations.
HOME-OWNERS ASSOCIATIONS: Scheme Governance Documentation
A Home-owners association is usually a non-profit company, with the following governance documentation: (It is regulated by the Companies Act and not the Sectional Titles Schemes Management Act).
- The Memorandum of Incorporation (MOI) which sets out the objects and interests, which is registered at the Companies and Intellectual Property Commission (CIPC). This is the “Law” for that specific HOA, regulated by the Companies Act.
- The Rules registered for the HOA, which have to be created and changed in terms of the Companies Act. It must also be filed at the Community Schemes Ombud Services (CSOS).
The Sectional Title Schemes Management Act is the chief “Governance documentation” of schemes. It also consists of Regulations which include Management Rules (Annexure 1) and Conduct Rules (Annexure 2).
It is possible to substitute, add to, amend or repeal these prescribed rules, to fit the requirements of a specific scheme.
Before the new Act, it had to be registered in the deeds office and was a much more complicated process as now. It is now lodged at the Community Schemes Ombud Services (CSOS) and also approved by them.
PRESCRIBED MANAGEMENT RULES
These rules regulate the complicated requirements regarding meeting procedures and requirements (owner and trustee), responsibilities of the different parties involved in management, financial management, administrative management and physical management.
To change these rules, a body corporate needs a unanimous resolution, which means that 80% of owners in value and in number must be present at the meeting (of which 30 days’ notice must be given, with all amendments, and all rules to be considered, attached to the notification), and all owners present or represented by proxy, must vote in favour of it.
These are VERY important rules and are not supposed to be easily changed.
PRESCRIBED CONDUCT RULES
These rules regulate the behaviour of owners, residents and their guests.
I love these rules! As it is a short set of rules and easily understood and enforced. It can probably fit into two or three pages and are very effective. There are very few problems that cannot be resolved with these rules, properly applied. The key functionality is the fact that all conduct is compressed into only eight headings, and in all cases, these rules are delegated to the trustees to define and regulate.
This means that ordinary house rules or Codes of conduct, correctly compiled are legally enforceable in a court of Law, or in a dispute at CSOS. “House rules” is a general term for policies and the regulating of day to day matters, distinctive to a specific body corporate.
UNIQUE CONDUCT RULES
In many cases, bodies corporate feel a need for a hefty set of conduct rules, so as to make provision for every eventuality. The legislation makes provision for the PCR (Prescribed Conduct Rules) to be substituted, added to, amended or repealed by a special resolution. A special resolution requires a special general meeting, properly constituted (at least 33% of owners represented in value -participation quota), with at least 75% of owners represented (in number and value) voting in favour of the resolution.
An important consideration is that bodies corporate often feel the need to create rules so that fines and penalties can be established. In the past, it was difficult to enact fines and enforce it in a way that was not open for disputes as to the legality thereof. Due to the fact that CSOS now approve the validity of rules and can make changes, it is much easier.
As the process of fines needs to be fair and equitable, and a dispute resolution process must be available, it can be difficult and arduous for small schemes to use. If a fine is disputed, a proper trustee meeting needs to be held where the trustees can hear the side of the owner and further consider the matter, with a decision, properly documented. The fines also need to be decided on at a general meeting of owners and must also be increased at such a meeting (with the relative agenda – details attached, and the minutes).
Very often the same result can be obtained by the managing agents, sending a letter on the instruction of the trustees, to warn of the breach of conduct. A reasonable administration fee (which must provide for correspondence and telephone calls to resolve the matter), currently R253,00 (VAT incl.), is charged by Jotam as agreed in the management agreement of schemes. Such a letter and process can resolve the matter a lot easier. If ignored by the guilty party, the action will escalate, with the resulting legal costs for the account of the owner.
For a managing agent, it is much more challenging to enforce rules, when every scheme has a completely different set of rules.
Sometimes a set of rules is used by a body corporate, as if it is the registered rules, while it was just compiled or taken over from another body corporate. This is dangerous, as it will not be legally enforceable should a dispute occur and may lead to costs and court rulings against the body corporate.
My view is to change the rules if necessary but still keep it as short and in line with the prescribed conduct rules, as possible. Furthermore, compile “code of conduct” or “house rules” in accordance with the conduct rules, as delegated to the trustees.
I hope that this will help with a better understanding of this complicated subject, and be useful when needed to deal with the unavoidable issues of communal living!
Load Shedding and Your Home Security System: 5 Must-Do's
Homeowners have been urged to test their security systems and to pay particular attention to the battery backup systems as South Africa finds itself in the midst of wide-spread load shedding once again.
There are a number of practical steps that can be taken to ensure security is not compromised during any power cuts. Some of these include ensuring the alarm system has an adequate battery supply and that all automated gates and doors are secured.
Charnel Hattingh at Fidelity ADT says the most important tips to remember about being prepared for a power cut are:
- It is important that your alarm system has an adequate battery supply. Batteries should be checked regularly.
- Alarms should be checked during extended power outages to keep systems running.
- Power cuts can impact on fire systems and fire control systems, so these also need to be checked regularly.
- The more frequent use of gas and candles can increase the risk of fire – home fire extinguishers should be on hand.
- Above all, remain vigilant during a power cut. Be on the look-out for any suspicious activity and report this to your security company or SAPS immediately.
“Because of load shedding, there might also be a higher than a usual number of alarm activation signals received by security companies,” says Hattingh. “You can assist by manually cancelling any false alarms, and thus help call centre agents in prioritising the calls needing urgent attention.”
The Right Price for your Home Purchase
Ever wondered about how to establish the price you’re willing to pay for a home?
You may not have. You need to purchase a home, in the back of your mind you have the amount you can spend and you know the area you want to look in. So, you jump in your car and view houses, only to be very disappointed in the outcome.
To find out some of the techniques that could take the sting out of the situation, contact Minari on 072 588 8136 to get your free report entitled ‘The Right Price For Your Home Purchase’.
How to Create Multi-functional Play Areas for Your Kids
Here are tips for creating multi-functional play areas that the whole family can enjoy.
Expand on what you already have:
In many homes, you already have the ‘bones’ for a good playroom. Wide, open walls can be used for bulletin boards, lining up easels for art projects, or can be painted with blackboard paint for the ultimate in non-stop creativity for your kids.
Turn unused space into a playroom:
If your home has a room that is not being used to its full potential, consider transforming it into a multi-functional play area. Use playful, whimsical wall colours and combine the space with adult-sized furniture and storage. Use one wall for a television and gaming area. That way, the entire family will enjoy using the space.
Combine education and play:
For many homes, separate studying and play areas are not realistic. Combine the two functions – desks for schoolwork and activities can later be used for board games and craft projects.
Share the space:
If you live in a small home or an apartment, find ways to share the space with your little ones, but still, make it fun. Opt for neutral tones and use décor to add colour and creative inspiration. Colourful rugs, accessories and wall décor can make your child feel like they aren’t giving up being a kid!
A police officer in a small town pulled over a driver speeding down the main road.
The driver said he could explain why he was speeding, but the police officer was not interested in excuses.
He told the driver, “I’m going to put you in jail until the station commander gets back. It’s your lucky day though – the commander will be in a good mood because his only daughter is getting married this afternoon.”
The driver said, “Don’t count on it. I’m the groom.”