The ‘house rules’ are a policy which regulates the conduct of residents and the running of a company title building on a day to day basis. They often include provisions about things like noise, renovations, short term leasing, the administration of the building and the use of common rooftop and garden areas.
Who makes the house rules for a company title building?
Constitutions provide the board with a power to make and amend rules and regulations from time to time. This allows the directors to issue new house rules quickly in response to changing circumstances and practices.
Sometimes, constitutions provide that house rules can only be made and amended by an ordinary resolution of the shareholders. This can be a lengthier and more complex process. Particularly if the company has a large number of shareholders or if a significant proportion of them are not resident in the building.
Even if the directors have a power to issue house rules themselves, it is conducive to the harmony of the building for shareholders to be consulted about any changes to the house rules prior to them being made.
How to enforce house rules
Generally, the constitution will oblige shareholders to comply with any house rules which are issued from time to time. This provides the company with an ability to enforce the house rules against a recalcitrant shareholder in the Local Court as a last resort.
There are a number of steps which companies should take to ensure compliance with the house rules prior to commencing proceedings. They include:
- Ensuring that all residents have read, understood and signed a copy of the house rules before they start occupying the building.
- Ensuring that all residents have ready access to a copy of the house rules.
- Giving residents ‘ownership’ of the house rules by involving them when the rules are drafted.
- Asking all residents to ensure that any visitors they have have read and understood the house rules.
- Issuing written letters or infringement notices to residents who are found to be breaching the house rules.
Follow these few steps and enforcing the house rules should remain manageable, more successful and less of an issue.
What are your experiences with enforcing house rules?