The right way to amend Sectional Title rules

For anyone living in or buying into a Sectional Title (ST) scheme, the body corporate rules are more than just paperwork: they are the legal framework that governs how the scheme is run and how residents live together in harmony. 

These rules fall into two main categories:

• Management Rules which deal with administration and governance, covering matters such as trustee powers, financial management, meetings, insurance and maintenance responsibilities; and 
• Conduct Rules which are concerned with day-to-day living, regulating residents’ behaviour and the use of sections and common property, including pets, parking, noise, refuse, security and alterations to units.

And, says Andrew Schaefer, MD of leading property management company Trafalgar, while every ST scheme starts out as a new development with the standard or “prescribed” rules that form part of the Sectional Title Schemes Management Act (STSMA), most schemes need to make some amendments sooner or later to suit their own layouts, facilities, security needs or community expectations.

“For example, some older schemes are still operating according to rules created under earlier ST legislation that don’t align with modern lifestyles or requirements. And many others are finding gaps now where their existing rules don’t adequately regulate short-term letting, renewable energy installations, parking pressure, remote working practices or new security protocols. 

“Amendments can also be necessary to remove outdated or discriminatory provisions, clarify maintenance responsibilities, or introduce clearer enforcement procedures and fines for non-compliance.”

However, he says, it is important to note that rules always have to be reasonable and applied equally to all owners. They can’t be amended to suit the preferences or convenience of just a few residents or the trustees. 

“Meanwhile, the process for changing or adding to the prescribed rules is structured but not complicated. Management Rules can only be amended by unanimous resolution of the members of the body corporate, which means that every owner in the ST scheme must support the change. Conduct Rules require a special resolution, which generally means approval by at least 75% of the owners in value and number. These resolutions can be made at a properly convened meeting or by written round-robin resolution.

“Then once approved internally, the amended rules must be submitted to the Community Schemes Ombud Service (CSOS), together with the consolidated rule set, the prescribed forms and proof that the required resolution was achieved. CSOS will then review the proposed amendments to ensure that they comply with legislation and are reasonable for the scheme. If any provision is problematic, the scheme can be asked to change or remove it before approval is granted.”

Schaefer notes that any new or amended rules will only become effective and enforceable once CSOS has issued a formal certificate of approval – not from the date the resolution was taken. “This is a crucial point often misunderstood by trustees and residents alike; a rule is not legally binding simply because owners voted for it. Without a CSOS certificate, it cannot be enforced.

“Schemes also cannot operate under so-called house rules” which have been informally adopted by the trustees. These also have no legal standing unless they have been properly approved by owners as Conduct Rules and then approved by CSOS.” 

Before they start changing rules, residents also need to know, he says, that there are clear limits to what CSOS will approve. “Rules that are discriminatory, punitive or inconsistent with the law will be rejected. For example, a rule attempting to ban children from using common property facilities, prohibiting owners from selling to certain demographic groups, or imposing excessive fines without due process would not be approved.

“Similarly, rules that conflict with the Prescribed Management Rules that form part of the STSMA, or with residents’ constitutional rights, such as unreasonable restrictions on access, ownership rights or lawful use of a unit, will not pass review.”

Because the process of amending rules involves legal drafting, procedural compliance and regulatory review, many bodies corporate benefit from professional assistance, Schaefer says, and reputable managing agents such as Trafalgar regularly assist trustees in consolidating their rules, ensuring that they are consistent with legislation, preparing the correct documentation and liaising with CSOS.

“Our experience and established working relationship with the regulator can help schemes avoid common pitfalls, respond quickly to queries and move more efficiently through the approval process.”

He says that for ST buyers and residents, the key takeaway is that body corporate rules are not static documents but living governance tools. “Well-considered amendments can improve harmony, protect property values and ensure the scheme functions smoothly, but only if they are adopted correctly and formally approved. And before relying on any rule, it is always wise for trustees to confirm that it has been properly passed and certified by CSOS, because in ST living, enforceability depends as much on process as on intention.”