This question is so basic and so important that attorneys, managing agents that have already arrived at the (correct) answer may find it difficult to understand why many people are still struggling with the problem. I must in fact admit that I did not immediately grasp the position, due to the specific sequence of the provisions of the Management Act. (Henceforth ‘the Management Act’ shall be the Sectional Title Schemes Management Act, No 8 of 2011 and the Community Schemes Ombud Service Act No 9 of 2011 shall be referred to as ‘the Ombud Act’, at least for the purposes of this publication).
At a recent workshop presented by myself it became clear that a substantial amount of confusion remains about the question as to whether or not the new prescribed rules apply to existing sectional title schemes. Strong arguments were advanced by attendees at the seminar that the new rules prescribed under the Sectional Title Schemes Management Act only apply to new schemes established after 7th October 2016. The many practical problems arising from a view that the new rules also apply to existing schemes were convincingly highlighted and it must be said the provisions of the Management Act are not entirely clear and easily understandable on this important issue.
The argument that the ‘old’ rules, as prescribed under the 1986 Act remain in place for existing schemes were mostly based upon the words of section 10(12) of the Sectional Title Schemes Management Act: Courier Issue No 51 October 2015 – ‘Any rules made under the Sectional Titles Act are deemed to have been made under this Act.’ Read on its own this provision can be interpreted to mean that in respect of existing schemes all existing rules remain in place as if they were made under the Management Act. This would further mean that the new prescribed rules will only apply in respect of schemes established after 7th October 2016.
Now proceed to consider the wording of section 21: ‘Rules prescribed under the Sectional Title Schemes Management Act must continue to apply to new and existing schemes until the Minister has made regulations prescribing management rules and conduct rules referred to in section 10(2) of this Act.’ The words ‘continue to apply to . . . until’ cannot mean anything other than that the ‘old’ prescribed rules must fall away as soon as the ‘new’ prescribed rules are put in place –which did in fact happen on 7th October.
But, you may well ask, why do sections 10 and 21 contradict each other?
At first reading they certainly appear to. However, in terms of the rules of interpretation, a court of law must apply meanings to provisions of legislation which are not contradictory. In fact this can be done fairly easily: The same words must be understood to have the same meaning and different words must be presumed to have different meanings. This rule of interpretation provides a solution if the specific words of the two provisions are looked at. In section 10 mention is made of ‘rules made’ whilst section 21 speaks of ‘rules prescribed.’ This must then mean that ‘made rules’ are only the special rules adopted by a body corporate and must be retained, whilst ‘prescribed rules’ are replaced. Thus, any rules specially adopted by bodies corporate must remain in place, whilst the parts of sets of rules which consist of the standard rules prescribed under the 1986 Act are replaced by the standard rules now prescribed under the Sectional Title Schemes Management Act.
The problem which I had in immediately understanding the situation and which seem to lead to many others misunderstanding the position as well is that section 10 precedes section 21 with many provisions in between. Once section 10 has been read, one then assumes that the old rules remain in force and this assumption remains in one’s mind. Courier Issue No 51 October 2015
Perhaps section 21, which is read afterwards and is ‘merely’ a transitional provision, is later not given sufficient attention, and the misconception remains.
A proviso which applies but which will not be found in the Management Act, is that the special rules ‘carried over must be reconcilable with the new prescribed rules. This is a matter of simple logic, because individual provisions in a set of rules may not contradict another provision. The trustees are now obliged to create and maintain a properly integrated ‘consolidated’ set of rules. From my own experience in this brief period since 7th October, I can say that this is no easy task. The ‘consolidation’ must further include an index to the rules – something which had often been neglected in the past, especially in the event of later amendments.
As most trustees and managing agents should already be aware, the rules of the game have also changed as far as so-called ‘registration’ is concerned. Rules were never ‘registered’ in the past, they were merely lodged at the Registrar of Deeds without any examination process. From 7th October any amended rules must henceforth be submitted to the Ombud for examination and approval and will only take effect and become enforceable after formal approval thereof has been obtained from the Ombud.
In order to avoid serious delays, trustees and managing agents will have to ensure that the above-mentioned requirements, as well as the prescribed procedural provisions are complied with.
Source – Article written by Tertuis Maree from Tertius Maree Associates