Tenants and sectional title properties

Some tenants find themselves in a quandary when a trustee of a sectional titles block serves them with a "notice of violations of body corporate rules", and might even expect them to vacate.

These are tenants who perform diligently on the contractual terms of their leases and enjoy cordial relationships with their landlords, but may encounter problems with an overzealous trustee or chairperson of the body corporate.

Take, for example, 'illegal' parking of vehicles on the common property and the resultant fines: the tenant's visitor parks a vehicle in a bay designated for a specific owner.

In terms of the conduct rules, such a violation carries with it a fine and the body corporate's right to wheel clamp to immobilise the vehicle.

Good landlord-tenant relationships aside, landlords are not residents of the building and do not attend meetings, not even the annual general meetings where matters such as amending rules and adjusting levies are decided.

If we factor in absentee owners in the majority of a block, and non-attendance of meetings as the norm, left to survive, the remaining owners will do what it takes to protect the sectional titles scheme.

There are instances where one or two owners are forced to take decisions, and overzealous ones eventually make their own rules. Herein lies the potential to destroy whatever financial resources the particular body corporate may have accumulated.

The damage arises from legal battles between the tenant's landlord and the body corporate because the landlord, as owner, is ultimately responsible for the fines.

The owner who did not attend meetings will probably be willing to wage a legal battle to prove that the rules are unlawful and the decisions taken at the meetings are not binding.

The following questions are critical, especially if the matter goes to court.

• Annual General Meeting (AGM)

   

  When and how were the owners informed of the AGM? Where was it held? How many attended in person? How many owners' representatives attended with proxies?

  Which other person or entity representative was present besides owners/trustees? If no one attended, what steps were taken?

  Trustees and the chair's term of office automatically come to an end at the AGM.

  How were trustees and the chairperson elected? How many votes in favour?

   

• Amendments

   

  Was any rule amended? How was the amendment done?

  Any amendment to the rules has to be registered with the Registrar of Deeds and confirmed by the auditor or accounting office at the AGM.

   

• Venue

   

  How was the venue for the AGM decided? When was it decided? Who were present? The chairperson cannot unilaterally decide to hold the meeting in his or her unit (flat).

   

• Resolutions

   

  What resolutions were taken? A unanimous resolution is used for changing management rules; leasing or selling part of the common property and decisions about luxurious improvements.

  A general resolution is for approving the budget and election of trustees. Where there is a need to cancel the managing agent's contract, amend the conduct rules and carry out necessary repairs and improvements to common property, this is done by way of a special resolution.

  An owner who repeatedly flouts the conduct rules or is in arrears with the levy payment can vote for a unanimous resolution only.

  There are instances where no one attends or a quorum is not present. The meeting is automatically adjourned within half an hour to the following week to the same day and at the same place and time.

  The next time those present will constitute a quorum if they vote to do so, even if they are less than the minimum number required.

  Imagine a situation, which happens in some schemes, when only one owner is present, who then amends the rules and confirms the budget. This single person votes for the general, unanimous and special resolutions. In situations like these, the absentee owners concerned about their tenants' interests, perhaps it is more about pecuniary interest, will challenge changes to the conduct rules and the penalties and defend legal actions for defaulting on the levy payment.

  Therefore responsible landlords, and owners in a sectional titles scheme, must pay their levies, attend meetings to protect the scheme to ensure it functions successfully, and balance the interests of their tenants and the rights of other owners.

Source: Daily News