16. DISTINCTION BETWEEN RULES AND TITLE DEED CONDITIONS
16.1. Rules must be distinguished from registrable conditions of title, including servitudes and other real rights that are burdens imposed on sectional property and serve to restrict the rights of owners when they deal with their units. These conditions may operate in favour of specified persons or for the benefit of the other owners in the scheme from time to time. Before town planning legislation existed, developers and local authorities used restrictive title deed conditions to regulate land use. Registered title deed conditions are considered to have the same legal effect as servitudes.
16.2. The developer of a sectional title scheme may, on opening a sectional title register, impose any registrable title deed conditions.41 The provisions in the ST Act that allow the developer to register further development rights and exclusive use rights require that details of these servitudes must be added to the existing title deed restrictions in the scheme’s schedule of conditions.42
16.3. The provisions of a title deed condition can prohibit the owner of a property from doing something or entitle another person to do something on the owner’s property, but they cannot impose an obligation on the owner to do something unless that obligation is directly linked to a registrable negative obligation.43 On the other hand, there is no such “passivity” requirement for body corporate rules. A management rule can impose a positive obligation on the trustees, on a chairperson or on a member of the body corporate. A conduct rule can impose a positive obligation on an owner or occupier of a unit.
16.4. From 1983 to 1997 and in terms of the ST Act, registrars of deeds examined body corporate rules submitted by developers and bodies corporate, prior to accepting them for filing. The chief registrar, to illustrate the distinction between legitimate body corporate rules and provisions that could only be imposed as title deed conditions, said:
“Problems are encountered from time to time when bodies corporate change rules, where attempts are made to create servitudes by means of rules, for example, that the unit may not be sold or rented without the written consent of the trustees of the body corporate or the unit may not be occupied or owned by a certain number of persons.”44
16.5. The chief registrar confirmed the common law position that servitudes are classed as real rights and that a sectional title unit is considered to be land.45 He also pointed out that the ST Act requires the registration of a notarial deed to record the imposition of any real right in the whole or any share in a unit, other than in the case of a registered sectional mortgage bond or lease, for which there are prescribed forms.46 His conclusion was that no provision that restricts the exercise of sectional ownership rights can be included in a sectional title rule; it must be included as a condition of title in the scheme’s schedule of conditions.47
16.6. In accordance with the chief registrar’s ruling, any provision that:
16.6.1. prohibits or restricts the sale, transfer, mortgage or lease of a unit without the consent or the body corporate or any other person; or
16.6.2. limits the number of persons who can own or occupy a section will only be binding if it is registered as a title condition, and may not be included in a body corporate rule.
16.7. Examples of provisions that detract from owners’ right to freely use and manage their property that can be included in the scheme’s schedule of title conditions include:
16.7.1. owners are not entitled to let their units except as part of a “letting pool” arrangement run by the body corporate or a third party and owners are not allowed to reside in their units for more than 3 months each year,
16.7.2. a commercial hotel enterprise has the right to run its operations and the letting pool, to operate a reception and concierge service and to erect appropriate signage, and
16.7.3. a commercial enterprise has the right to erect, access and maintain a cell-phone mast on the roof or signage on an outside wall.
17. DISTINCTION BETWEEN RULES AND LAWS OF GENERAL APPLICATION
17.1. Rules are body corporate laws that operate in the context of more authoritative national, provincial and municipal legislation. One of the functions of the body corporate is to ensure compliance with any law relating to the common property or to any improvement of land comprised in the common property.48 No rule can include any provision that is inconsistent with a provision in the Constitution of the Republic of South Africa Act,49 the STSM and ST Acts or any other national, provincial or municipal legislation.
17.2. Municipal legislation includes land use controls and behavioural restrictions. It is almost certain that the relevant town planning, noise control and environmental health by-laws, for example, will deal with issues such as permitted building bulk and coverage, the enclosure of balconies, the acceptable volume of noise and the number of people who are entitled to occupy a section. A developer or body corporate that considers making or amending rules, must take into account the relevant municipal by-laws.
17.3. When a municipal by-law gives a sectional owner an outright or a qualified right, a rule cannot take away that right. So where under the relevant municipal planning by-law an owner has a right to put a unit to a particular use or the right to make an application to the municipality for approval or consent to use the unit in that manner, body corporate rules cannot prohibit the owner from doing so.
17.4. Where the STSM Act requires trustee or body corporate approval to authorise an owner to make a particular application, as in the case of a proposed subdivision, consolidation or extension of a section,50 the municipality is obliged to ensure that the required statutory approval has been obtained before it considers the owner’s consequent application. However, a body corporate is not entitled to make rules that prevent an owner making such an application and the municipality is not entitled to require that the owner comply with a requirement under the rules before it considers an owner’s application.
17.5. Where a municipal by-law restricts an owner’s rights, for example putting a limit on the number of people that can reside in a section or the amount of noise that may be audible from outside a section, a rule can only impose a more onerous restriction if this is reasonable in the context of the scheme and because it is necessary to prevent the owner breaching a statutory obligation, i.e. causing a nuisance or otherwise interfering with the rights of other owners or occupiers.51 So where a town planning scheme limits residential occupation to “12 occupants per sanitary convenience”, a body corporate may well be able to justify a more restrictive limitation of two adults per bedroom, if there is good reason to expect that a higher occupancy rate will cause a nuisance. Such a rule would arguably be within the body corporate’s legislative competence because it is a reasonable reaction to a nuisance issue that the body corporate can regulate by way of a conduct rule.
18. SHORT-TERM LETTING RULES
18.1. A contentious example of overlapping municipal and body corporate jurisdiction is the issue of short-term letting. The provision of short-term accommodation supports tourism, which in turn supports job creation, economic prosperity and social stability. However, there are concerns that short-term sectional title tenants cause more nuisance than long-term occupiers.
18.2. To control short-term letting in terms of town planning schemes or other by-laws, a municipality must make provisions that deal specifically with this issue. The City of Cape Town Municipal Planning Amendment By-Law of 2019, for example, is a by-law that makes provision for short-term letting of a sectional title unit.
18.3. When municipal laws do regulate short-term letting, the applicable provisions take precedence over any body corporate rule. A municipality may make specific provisions for short-term letting of sectional title units, but it cannot require a sectional owner to obtain body corporate permission before letting the unit or making application for municipal consent to do so.
18.4. When municipal laws do not allow or regulate short-term letting, bodies corporate can make conduct rules that are a reasonable reaction to nuisances experienced or reasonably anticipated as a result of people using units on a short-term basis. However, a conduct rule cannot prohibit owners from letting their units or from inviting their family or friends to use them, whether or not the owners are present.
18.5. When there is a reasonable expectation that short-term occupiers are likely to interfere with the rights of the body corporate or other occupiers, a conduct rule can control the behaviour of owners who allow short-term tenants/occupiers to the extent that this is necessary to prevent a breach of the owner’s obligations in terms of the STSM Act. In practice such a provision may constitute a qualified restriction on an owners’ right to provide short-term accommodation.
18.6. Such a rule should:
18.6.1. be clearly linked to the enforcement of owners’ and occupiers’ obligations under the STSM Act,
18.6.2. apply to all short-term occupiers, not only those who pay for their accommodation or those who use the unit when the owner is absent,
18.6.3. apply irrespective of whether or not the landlord uses an online or other booking or management service;
18.6.4. directly address the reasonably anticipated nuisance issues,
18.6.5. not restrict or materially inconvenience any sectional landlord or occupier who has not created or allowed others to create a nuisance, and
18.6.6. include a process designed to ensure that the rules of natural justice will be applied in the application of the rule.
18.7. In addition, such a rule can require any owner who has short-term occupiers to lodge with the body corporate a deposit as security for its costs incurred in:
18.7.1. dealing with the issues caused by short-term occupiers in that particular unit, such as the expense involved in replacing lost security/access control cards, and
18.7.2. enforcing the provisions of the STSM Act and its conduct rules, including the body corporate’s costs for obtaining the tenant information it is obliged to keep, providing a copy of the rules, reacting to complaints and repairing damage to common property.
Graham Paddock
Cape Town, September 2020
Notes
- In terms of section 11 (2) and (3) (b) of the ST Act, the registrable conditions must be set out in a schedule, certified by a conveyancer and registered on opening of the sectional title register.
- Sections 25 (1) and 27 (1) read with section 11 (2) of the ST Act.
- Section 63 of the Deeds Registries Act, No. 47 of 1937.
- Chief Registrar’s Circular No. 3 of 1993.
- Section 3 (4) of the ST Act.
- Section 15B (1) (c) and (d) of the ST Act and section 65 of the Deeds Registries Act.
- Section 11 (3) (e) of the ST Act.
- Section 3 (1) (p) of the STSM Act.
- Act No. 108 of 1996.
- Sections 5 (1) (h) and 7 (2) (a) of the STSM Act.
- Section 13 (d) and (e) of the STSM Act.
For Part 1 see Sectional Title Body Corporate Rules - 1
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