The directors of a commonhold association shall exercise their powers so as to permit or facilitate so far as possible—
the exercise by each unit-holder of his rights, and
the enjoyment by each unit-holder of the freehold estate in his unit.
The directors of a commonhold association shall, in particular, use any right, power or procedure conferred or created by virtue of section 37 for the purpose of preventing, remedying or curtailing a failure on the part of a unit-holder to comply with a requirement or duty imposed on him by virtue of the commonhold community statement or a provision of this Part.
But in respect of a particular failure on the part of a unit-holder (the "defaulter") the directors of a commonhold association—
need not take action if they reasonably think that inaction is in the best interests of establishing or maintaining harmonious relationships between all the unit-holders, and that it will not cause any unit-holder (other than the defaulter) significant loss or significant disadvantage, and
shall have regard to the desirability of using arbitration, mediation or conciliation procedures (including referral under a scheme approved under section 42) instead of legal proceedings wherever possible.
A reference in this section to a unit-holder includes a reference to a tenant of a unit.