How the trustee system works: Trustee decisions

(By Anton Kelly)

The Sectional Titles Act, 1986, provides that the functions and powers of the body corporate are performed and exercised by trustees. 

The practical necessity for having an executive committee to make the day to day decisions of sectional title co-owners is borne out by the frequent complaint that owners do not attend meetings. If owners are reluctant to attend the AGM, where vital decisions for the coming financial year must be made, imagine the difficulty getting them to meet and make routine decisions. Hence the need for a smaller group of trustees charged with overseeing day-to-day management.

However, there are some decisions that the trustees can’t make. They can’t make any decision that is required to be taken by resolution at a general meeting. The body corporate is, after all, the policy maker, the final decision maker in a sectional title scheme. Its members, being all the owners, must take all the really important decisions. Some of these decisions are so important and affect the scheme so fundamentally that the Act even allows them to be made outside a meeting, by written resolution.

And then, strangely, there are the decisions reserved for trustees. Both the Act and the prescribed rules allow only the trustees to make certain decisions. There is no mechanism allowing the body corporate to raise a levy, either the annual levy or a special levy. It is also only the trustees who can give certain consents, big ones like consolidating and subdividing sections, and small ones – although with a greater potential for causing unrest among owners – like keeping pets and erecting TV antennas.

Whatever the trustee decision, it must be made by the trustees acting together, either at a meeting or taken as a written resolution. While it is possible for the trustees to delegate responsibility for specific tasks to individuals, because of the requirement that two trustees – or a trustee and the managing agent – must sign any document that creates an obligation on the part of the body corporate, those individuals can’t by themselves make and implement important decisions.

The trustees are also specifically and personally required to act in good faith and for the benefit of the scheme as a whole. They are required to avoid material conflict of interest between themselves and the body corporate and may not take part in any decision concerning a body corporate contract or litigation if they have any personal interest in the matter.

So the trustees need to have a good working knowledge of the Act and the scheme’s management and conduct rules, usually based closely on those prescribed, to know what decisions can only be taken by owner agreement, what they can determine at their meetings and what  tasks they can delegate to a single trustee.

Anton Kelly is a Specialist Sectional Title and HOA Teacher at Paddocks, a specialist sectional title and home owners' association (HOA) firm that provides a range of products and services throughout South Africa.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 25 Apr 2018
      Whether you are a seasoned seller or new to the game, putting your home on the market is an exciting moment. To ensure you get the best possible outcome these 8 value adding additions to your home is worth the effort.
    • 25 Apr 2018
      After four years of unprecedented growth fuelled by semigration, the Southern suburbs market faced a number of challenges in 2017, including dwindling affordability and a marked slowing in house price growth with many sellers forced to lower their prices in order to secure a sale.
    • 25 Apr 2018
      Mall of Africa, is celebrating its second year of sensational success. This splendid super-regional shopping centre first opened on 28 April 2016, and has grown in popularity, performance and profile since then.
    • 25 Apr 2018
      While the role of trustee in a sectional title scheme is a voluntary and unpaid position, it is one that comes with huge responsibility. Trustees have a fiduciary duty towards their scheme, says Chinelle Hewit, Operations Manager at sectional title finance company Propell.
    • 24 Apr 2018
      The thing about the property ladder is that at some point in our lives we all have reason to want to climb a rung or two higher. Sometimes, it’s because we’ve outgrown our previous dream home, or because we want to be in a better neighbourhood that’s closer to work or to schools. Sometimes it’s because our circumstances have changed, and we’re taking care of elderly parents or relatives. Sometimes, it’s just because we want a property that reflects the financial status our hard work has won.
    • 20 Apr 2018
      Whenever changes in the political ecosystem of a traditional property market create uncertainty, smart investors begin to look elsewhere for new opportunities. Property experts at IP Global have analysed the trends and crunched the numbers to find new markets to explore in Europe and the United States.
    • 20 Apr 2018
      Energy and water self-sufficiency are increasingly important factors in home buyers’ choice of property – especially in Cape Town where the extreme drought of the past few years has made municipal supply costly as well as uncertain.
    • 19 Apr 2018
      During the last decade, rampant development has progressively transformed Cape Town’s property landscape with densification being the order of the day, but there are still one or two hidden gems like Scarborough which have retained their original character, offering an inimitable lifestyle and an attractive investment opportunity.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us