A Company Title home building is governed by its Memorandum and Articles of Association (now known as a Constitution). The better run company title home buildings also have a set of company title regulations in place commonly known as ‘House Rules’.
What are House Rules?
House Rules are a separate regulatory document and usually do not form part of the Memorandum and Articles of Association. They may also be known as ‘Regulations’ or ‘By-laws’.
The House Rules of a Company regulate the management of the building and the conduct of its residents on a day to day basis. Ideally, the House Rules should cover the following:
- Expected behaviour of shareholders and visitors,
- Rules on noise,
- Rules on the obstruction of common property,
- Regulations on fire safety,
- Rules on smoking,
- A pet policy,
- Rules in respect of changing the external appearance of the building,
- Rules on hanging of washing,
- Rules on parking,
- A leasing and licensing policy,
- A specific policy on floor coverings,
- A policy on water penetration, and
- A policy to deal with disputes between members.
Why are House Rules important?
House Rules govern the day to day running of the Company. The House Rules commonly cover issues that are encountered by shareholders and the Company on a day to day basis. They also provide a clear expectation of what is expected from shareholders overtime and have the capacity to reduce conflict and disputes in the building.
If any clauses in the House Rules are breached, the Company would have a legal right to enforce those House Rules against a contravening shareholder.
From our experience, we have found that the House Rules should remain as a separate regulatory document and should not be embedded in the Constitution of the Company. House Rules that are embedded in the Constitution, result in a Company that is essentially ‘frozen in time’ because a special resolution of the members would be required to change the House Rules.
Generally speaking, House Rules that remain in a separate regulatory document, may be amended by a simple Board Resolution. This gives the Company the freedom to respond rapidly to changes in a commercial and regulatory context such as the rise of short-term leasing platforms such as ‘Airbnb’.
JFM LAW can help
If you are in need of help with company title regulations, you should contact us for advice and a quote on our House Rules.