Defamation and insurance in community schemes

[Updated: 09 June 2025]

Living in a community scheme means sharing space and opinions with a variety of people. In this environment, it’s easy for emotions to run high, especially when expectations aren’t met or disputes arise. Unfortunately, this can lead to harmful statements being made, sometimes publicly.

Defamation risk in community schemes

There is no specific reference in the community scheme legislation to defamation or any requirement to protect members against defamation-related liability. Most standard insurance policies also explicitly exclude cover for defamation. This means that trustees, owners, and even managing agents are personally exposed if they defame someone, whether intentionally or not.

The community scheme environment is, in many ways, a perfect breeding ground for defamation. Group emails, large meetings, and social media platforms like Facebook, Twitter, and WhatsApp are common communication tools. However, they also make it dangerously easy to say the wrong thing, especially in writing, where comments are not only widely read but also recorded.

You don’t even need to be the original author of a defamatory statement to face the consequences:

If you’re tagged in a defamatory post and don’t distance yourself, you could be held liable.

If you’re an admin of a WhatsApp group or Facebook page and fail to remove defamatory content once made aware of it, you can be held responsible as the publisher.

Caution for trustees and admins

We’ve observed many instances where negative or unfair comments are made about trustees or managing agents, often based on emotion or frustration rather than fact. These comments may seem harmless in the moment, but they can carry serious legal risk.

Trustees should avoid:

• Imposing personal values in their communications.
• Allowing private frustrations to shape official decisions.
• Making accusations without a proper investigation or resolution.

Even internal communications, such as letters to owners or minutes of meetings, can be defamatory if they present allegations as fact without giving the accused a fair chance to respond.

The Sunnyside Gardens case – a warning

In a recent case, The Body Corporate of Sunnyside Gardens v Perreira, a trustee was defamed by his own body corporate. A letter from the trustees’ attorneys accused him of misusing electricity and running a business from his garage, without any prior investigation or evidence. The court found that the letter was framed in a way that presented him as guilty, was distributed to others, and caused reputational harm. The result? The court awarded R50,000 in damages against the body corporate.

This case underscores the importance of:

• Due process
• Factual accuracy
• Collective trustee decisions
• Avoiding personal agendas

A copy of the judgment is available via the blue button below.

Best practices for everyone in a scheme

• Think before you post or comment.
• Avoid naming individuals or companies when expressing concerns.
• Stick to the facts, not emotions or assumptions.
• Group admins should act quickly to remove defamatory content.
• Trustees should seek professional advice when dealing with sensitive issues.

In summary

 Community scheme insurance policies usually will not protect you from the consequences of defamation. Whether you’re an owner, trustee, or admin, any defamatory comment, even if factually correct, can lead to legal trouble. Guard your words carefully, and always follow fair and proper procedures before making or publishing any accusations.