The Sectional Titles Schemes Management Act 8 of 2011 (“the Act”) and Regulations do not prohibit Schemes imposing fines on members of the Body Corporate if a member transgresses the Scheme’s Management or Conduct Rules. In this blog post, I will briefly discuss the way in which a Scheme may lawfully amend its governance documents to impose a fine on a member of the Body Corporate.
Members of a Scheme may agree to amend the Scheme’s Management Rules or Conduct Rules to include a fine/penalty provision which would give the trustees the authority to impose a fine upon a member of the Body Corporate if he/she uses his/her section or exclusive use area in a manner or for a purpose that may cause a nuisance to any other occupier of a section.
In order to successfully amend the Scheme’s governance documents to include a fine/penalty provision, the Trustees of the Body Corporate are required to call a special general meeting. At the special general meeting, members may agree to include the provision in the Scheme’s Management Rules. If this is the case, the motion to amend the Management Rules must be adopted by way of a unanimous resolution. If members agreed to include the fine/penalty provision in the Scheme’s Conduct Rules, the motion to amend the Conduct Rules must be adopted by way of a special resolution.
If a motion is adopted to amend the Scheme’s governance documents, the Act requires the body corporate to notify the Chief Ombud of the proposed amendment. If the Chief Ombud approves the amendment, he/she will issue a certificate to that effect and the amendment will come into operation on the date of the Chief Ombud issuing the certificate.
The Chief Ombud will not approve a fine/ penalty provision unless the said rule is deemed to be reasonable, fair and equally applied among all members of the Body Corporate. The principles of natural justice and due process will apply when determining whether a fine/penalty provision is deemed to be reasonable and fair. The transgressor must inter alia be notified of his/her transgression in writing and given an opportunity to respond to the allegations (audi alteram partem) before he/she may be found guilty of an alleged offence and before a fine may be imposed upon him/her.
Feel free to contact us at any time should you require assistance drafting resolutions and/or a fine/penalty provision to be incorporated in your Scheme’s governance documents. Moreover, we have the required expertise to notify the Chief Ombud of the proposed amendment on your Scheme’s behalf.