ST body corporates and trustees

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23 Nov 2012

Body corporates have rules that are registered in the Deeds Office and some deal with the running of the complex and trustees have to abide by them.

A trustee does not have to be an owner and in many big schemes specialist people are asked to be trustees.

Body corporates have rules that are registered in the Deeds Office.  

Some of the rules deal with the running of the body corporate, holding meetings and accounting while others deal with the day to day living in the complex, explains Mike Spencer of Platinum Global.

Spencer emphasises that trustees have to abide by the rules and cannot make decisions based on their personal likes and dislikes.

“Some trustees seem to think that they can change and alter rules on a whim – that is not the case.

“If the rules say that no dogs over 30cm are allowed then that is the rule,” he says.

The trustees cannot then allow somebody to have a Great Dane or a Doberman.

If owners think that having more or bigger dogs is a good idea then they can put it on to the agenda of the next general meeting and propose that the rules be changed.

He says if correct procedures are followed, and everyone agrees then the rules can be changed (and noted at the Deeds Office) and the new rules then apply, otherwise the rules stay the same.

He notes that it is is very tempting to bend the rules.

When the new Sectional Title Act comes into force it will be possible for an owner to take the body corporate and/or trustees to the sectional title arbitrator and for them to force the trustees to revert to the correct way of working and personally face the costs involved which could be considerable.

While most body corporates work quite well with few problems or fights, this is often dependent on the attitude and dedication of trustees and managing agents.

Those that do their work for the benefit of the body corporate help the body corporate run well and reduce conflict.

Those that don’t comply with the rules usually end up with a body corporate where people are at each other’s throats.

Ordinary trustees should understand that they are not going to be paid. Their job is to ensure that the managing agents are doing their job properly and they should also be responsible for supervising on-site activities such as gardeners, security, from a day-to-day hands on view, as the managing agents seldom are able to do this within their normal management function.

Not only must trustees keep to the rules of the body corporate but they must also ensure that the rules that they apply are applied even headedly to all owners and tenants.

Owners get no special treatment over tenants. Remember that the tenant is hiring the property from the owner and is staying in the owners place.

Rules that apply to the owner of a unit equally apply to his tenants and trustees are elected to act in the interests of all owners and to represent their interests.

They simply cannot make decisions that they would like to see if these decisions are not in terms of the rules and to the benefit of all owners and occupants.

Who can be a trustee?

In a well-run scheme with a good managing agent the job of a trustee is not an onerous one.

In one with poor management and personality problems it can be a nightmare.

Just about anyone, provided that they are not mad, insolvent or a criminal can be a trustee.

A trustee does not have to be an owner and in many big schemes specialist people are asked to be trustees.

This would include lawyers, security consultants, people from within the building community (architects, land surveyors, etc).

While trustees are not paid officials, these special people can be paid if it was agreed by special resolution at the Annual General Meeting (AGM) that their skills were required to run the scheme.

This often happens for instance in a golf course or a holiday development.

Ordinary trustees should understand that they are not going to be paid.

Their job is to ensure that the managing agents are doing their job properly and they should also be responsible for supervising on-site activities such as gardeners, security, from a day-to-day hands on view, as the managing agents seldom are able to do this within their normal management function.

It should be remembered that at least half of all trustees should be owners or their wives.

A managing agent can be a trustee provided that they are an owner in the scheme.

There can be a conflict of interest with their work as managing agents and they would have to excuse themselves from any discussions regarding the appointment of managing agents.

They should also be open and honest about their workings with the body corporate so as not to cause a problem.

It is good to remember that you cannot have proxies in a trustees meeting. So if a trustee cannot attend a meeting and you don’t have 50 percent of trustees at a meeting the meeting cannot be held. If a trustee resigns it is possible to for the other trustees to co-op another trustee on the board for the balance of the year until the next AGM.

If a trustee resigns, it is possible for the other trustees to co-op another trustee on the board for the balance of the year until the next AGM.

A trustee that is in arrears can still attend and vote at a trustees meeting, though I would suggest that this is not morally correct.

They would have to excuse themselves regarding any items that affected them personally, so they cannot vote on big dogs if they already have one, as this would be in breach of the rules, he adds.

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