We have Management Rules that we amended in terms of the 1986 Act. Are they still valid or were they automatically replaced by the prescribed rules of the STSM Act from 7 Oct 2016?
Before 7 Oct 2016, rules were only filed at the Deeds Office and not approved by CSOS. Any rules made ito this are still enforceable under the STSM Act. This applies only if they were correctly approved – special resolution for Conduct rules and unanimous resolution for Management rules and after that filed at the Deeds Office.
It is only schemes that worked on the prescribed rules of the 1986 Act that now have to work on the prescribed rules of the STSM Act.
Let’s look at the relevant portion of the STSM Act:
Section 10
(9) Rules decided on by unanimous resolution under the repealed Sectional Titles Act, 1971, or any other provision before 1 June 1988 replacing rules contained in Schedule 1 to that Act, and at the said date not yet lodged with the registrar as contemplated in section 27(3) of that Act, lapsed on that date, and such rules are considered to have been replaced, subject to addition, amendment or repeal as contemplated in subsection (2)(a), by prescribed management rules contemplated in that subsection.
(10) (a) Unaltered rules contained in Schedule 1 to the repealed Sectional Titles Act, 1971, or any other provision and applying immediately prior to 1 June 1988 in respect of any scheme, lapsed on that date, and such rules are considered to have been replaced, subject to addition, amendment or repeal as contemplated in subsection (2)(a), by the prescribed management rules contemplated in that subsection.
(b) Unaltered rules contained in Schedule 2 to the repealed Sectional Titles Act, 1971, or any other provision and so applying in respect of any scheme, lapsed on that date, and such rules are considered to have been replaced, subject to addition, amendment or repeal as contemplated in subsection (2)(b), by the prescribed conduct rules contemplated in that subsection.
(11) Any rules other than rules referred to in subsection (10) which applied in respect of a scheme immediately prior to 1 June 1988 must, subject to such substitution, addition, amendment or repeal as contemplated in subsection (2)(a) or (b), as the case may be, remain in force after the said date, except to the extent that any such rule may be irreconcilable with any prescribed management rules contemplated in subsection (2)(a), in which case the management rules concerned applies: Provided that any such rules were as from 1 June 1988 considered to be supplemented by any rule in the prescribed management rules which is not provided for in such rules.
(12) Any rules made under the Sectional Titles Act are deemed to have been made under this Act.
This also applies to schemes that still have the old Schedule 1 and 2 rules.
In simple terms:
Schedule 1 rules that had been made under Act 66 of 1971 before 1 June 1988 but not yet lodged at a Deeds registry lapsed and were replaced with the management rules prescribed under Act 95 of 1986.
Where the Schedule 1 rules of a scheme made under Act 66 of 1971 had never been altered, the management rules prescribed under Act 9 of 1986 replaced those pre-existing rules on 1 June 1988. Simultaneously, the prescribed conduct rules under Act 9 of 1986 replaced any unaltered pre-existing Schedule 2 rules made under Act 66 of 1971.
However, if on that date the pre-existing rules had been altered, they remained in force as part of either the management or conduct rules respectively prescribed under Act 9 of 1986, and now still in force under the STSM Act, but only to the extent that they were not irreconcilable with any prescribed management rule.
In addition, the pre-existing rules that remained in force were supplemented by any rule that appeared in the management and conduct rules but was absent from the pre-existing rules.