5 May 2011
One of the things that owners of sectional title units can find particularly difficult to accept, especially if they live far away from the scheme in which they have invested, is that they are, in terms of Prescribed Management Rule 69, responsible for their tenant's conduct while he or she is living in the scheme.
Many owners expect the trustees or the managing agent to talk or write to the offending tenant - "because, after all, they are there in the building with him" (and this is on occasion done) but it is still the owner's or the owner's representative's duty to ensure that the tenant complies with all conduct and compliance rules. Matters become especially difficult when the tenant's behaviour results in a fine being imposed. This will be levied on the owner, not the tenant. The question that then arises is, can the owner recover the fine he has paid from the tenant who caused it to be imposed? It can surprise owners to find out that this is only possible if a clause in the lease agreement has specifically stated that the tenant will pay for all fines of which he is the direct or indirect cause. Many leases will make provision for the recovery from the tenant of electricity, water and other service charges but will neglect to specify that he is also responsible for any conduct fines. For this and other reasons it will pay the owner using a standard lease agreement to insert this extra clause, possibly drawing in the experience of a managing agent or even delegating all responsibilities, including rent collection, to such an agent. The plain truth is that one or two rowdy or insensitive tenants can wreck the reputation of a scheme - and this has to be guarded against by making them liable for the fines they cause to be imposed on their unit. *Michael Bauer is the general manager of IHFM, the sectional title management company