Sectional title schemes in South Africa are equal parts popular as they are restrictive, writes Ad Hoc Lecturer in law, Ashwini Singh. She says that, with 56 000 schemes registered nationally, they are all bound by the same regulations: one being that owners and occupiers are prohibited from running businesses within their sections in residential schemes.
WORDS & PHOTO: SUPPLIED
The Sectional Titles Schemes Management Regulations (the “STSM Regulations”) create Prescribed Management Rules (“PMRs”) which are intended for the control and management of any sectional title scheme in South Africa.
In terms of PMR 30(f), an owner or occupier is prohibited from using their section for purposes other than what is considered its intended use, which is described under three circumstances.
Essential management rules
Firstly, PMR 30(f)(i) states that the intended use of a section can be shown expressly or by implication on a registered sectional plan or an approved building plan. PMR 30(f)(iii) further states that the intended use of a section can be made obvious from the construction, layout and available amenities of a section.
All sectional plans for any sectional title scheme in South Africa are registered and held in the Deeds Office. Often, a sectional plan will indicate (explicitly or implicitly) that a section in a residential sectional title scheme is intended to be used as a place of residence and not a place of business. This can be through the descriptors of the rooms in each section indicated on the sectional plan or on the labels on the floor plans.
Secondly, PMR 30(f)(ii) details that the intended use of a section can be reasonably inferred from the applicable town planning by-laws or the relevant rules of the body corporate. A sectional title scheme’s body corporate is empowered to create management and conduct rules specific to its scheme under Subsection 10(2) of the Sectional Titles Schemes Management Act 8 of 2011 (the “STSM Act”), provided that these rules do not conflict with the PMRs.
Quite frequently, body corporates will have management or conduct rules that explicitly prohibit owners or occupiers from running businesses within a residential sectional title scheme. Bearing in mind that Subsection 10(4) of the STSM Act declares that both a scheme’s rules and the PMRs are binding upon owners and occupiers in a scheme, an owner or occupier’s ignorance of these regulations is no excuse for the contravention of them.
Consequences of contravening the rules
Insofar as breaches of the rules are concerned, legal action can be taken against the party who is non-compliant.
The Community Schemes Ombud Service (the “CSOS”) was established under the CSOS Act 9 of 2011 with one of its main purposes being to provide a dispute resolution mechanism in community schemes within South Africa. Any person who is materially affected by a dispute may lodge an application for dispute resolution with the CSOS.
Section 39 of the CSOS Act sets out a variety of prayers for relief that an applicant can seek from the CSOS. In particular, Subsection 39(2)(a) of the CSOS Act is a type of order where a person is compelled to refrain from acting in specified way. This type of order extends to ordering a person to refrain from running a business within a section in a residential sectional title scheme.
In the unreported adjudication order for Singh v Francis (CSOS 03769/KZN/19), one of the key issues addressed was whether the Respondent could run a business from his section within a residential sectional title scheme.
In Paragraph 43 of the adjudication order, Adjudicator T Khambule found that the Respondent’s conducting of business in his section was actually in contravention of the scheme’s conduct rules, which prohibited such conduct.
As a result, in Sub-Paragraph 51.5 of the adjudication order, Adjudicator Khambule ordered the Respondent to “…refrain from conducting business activities in his section…” within two weeks of delivery of the adjudication order – it goes without saying that an adjudication order from the CSOS is not a playing matter.
If enforced, a CSOS adjudication order becomes the equivalent of a court order. Specifically, Section 56 of the CSOS Act allows for the enforcement of an adjudication order as if it were an order of the Magistrate’s Court or the High Court of South Africa, depending on the jurisdiction of the relief granted and the amount of costs awarded to the successful party. Likewise, if any order of any South African court is violated, then the offending party will be held in contempt of the court.
Ultimately, owners and occupiers should think twice before attempting to run a business from a section in a residential scheme – breaching the rules, going to CSOS, and being ruled against is not worth the hassle that could be otherwise avoided through compliance with the rules.
Top picture: Ashwini Singh.
