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Sectional Title Advice: Simple "do's and don'ts" list can help trustees streamline their jobs

Being elected as a trustee of a body corporate is often not welcomed by those nominated as it is seen as an onerous and time consuming job. The few who do take up these positions should be commended as they are taking on the management of something that could be seen as a multi-million rand business and a huge responsibility, says Mandi Hanekom, operations manager of the sectional title finance company Propell.
 
“The members of the body corporate have confidence in the trustees’ integrity and ability to manage their scheme in order to have elected them into the position of trustee, but what has to be remembered is that the same members who elected the trustees can also dismiss them (by way of an ordinary resolution by members taken at a general meeting) if the job is not done properly,” says Hanekom.
 
All actions of trustees in sectional title schemes are governed by the Sectional Titles Schemes Management Act and the Prescribed Management Rules. Trustees should familiarise themselves with these and maintain their position of trust, she said.
 
In addition to the obligations and responsibilities of trustees prescribed by legislation, Hanekom recommends that owners and trustees remember the following basic tips.
 
Budget correctly. Correct budgeting is an important aspect of financial management and the scheme’s ability to pay all of its accounts every month. If this is done correctly there should be no need to raise special levies for unforeseen projects, as there will be a healthy and positive cash flow and perhaps even a reserve fund, she said.
 
Play an active role in the running of the scheme. It is very important to know what is happening within the scheme and what maintenance or repairs are being undertaken, as well as by whom. Those who do not take an interest or ask questions cannot complain later if things do go wrong, Hanekom warns.
 
Appoint the right people to help in the management of the scheme. “Competent people will do the job correctly first time around, and should not have to be micro-managed,” she said.
 
Don’t neglect to increase the monthly levies if the financials show that this is necessary. It is good financial practice to adjust the levies as soon as it is seen that the amounts received each month need to be increased in line with inflation or any cost increases. Keeping members happy by keeping the levies low does not do anyone any favours, says Hanekom. Low levies often lead to certain maintenance or repairs being neglected through lack of funds, or special levies having to be raised to cover large unforeseen bills.
 
Don’t pay any contractors without first checking their invoices and the actual work completed. Know what the job at hand was and what is being paid for, says Hanekom.
 
“Check that the standard of the work is what is required as it is no good paying for shoddy work and then, when problems crop up later, having to pay again to get the job done properly,” she says.
 
Don’t neglect regular maintenance to the buildings, grounds or equipment. Neglecting maintenance can very quickly lead to deterioration which then leads to the value of the scheme and the properties within it decreasing, says Hanekom.
 
“Your role as a trustee is a very important one and is vital to the effective running of the scheme as a whole. A good board of trustees, working together, will make sure that the scheme’s financials are good and that the management is effective and smooth. All the owners, in turn, will remain happy and your job should be less stressful overall.”


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