The role of trustees in sectional schemes: leaders or administrators?
Category Newsletter: Did you know?
In the dynamic world of sectional title schemes, trustees play a pivotal role in the smooth running of communal living spaces. Appointed to manage and represent the interests of all owners, trustees walk a fine line between leadership and administration, balancing individual concerns with collective responsibilities. The Sectional Titles Schemes Management Act 8 of 2011 ("STSMA") serves as the guiding framework that defines their fiduciary duties, powers, and obligations.
Trustees are elected owners or nominated individuals tasked with administering and managing the scheme on behalf of the body corporate. According to the STSMA, trustees are appointed at the annual general meeting ("AGM"), where owners vote based on their participation quotas. While trustees need not always be owners, depending on the scheme's needs and circumstances, their decisions must reflect the best interests of all stakeholders. Section 7(1) of the STSMA highlights that trustees must act in good faith and with due diligence, ensuring that their decisions are reasonable and aligned with the act's governance principles.
Their role extends beyond simple administration. Trustees are responsible, often in tandem with duly appointed managing agents, for managing the scheme's finances, overseeing levy collection, and ensuring sufficient reserve funds are maintained for future repairs and maintenance. They are also tasked with maintaining common property, ensuring shared spaces such as gardens, driveways, and communal facilities remain in good condition. The STSMA obliges trustees to enforce the scheme's conduct rules consistently and fairly, while also representing the body corporate in legal and contractual matters. These responsibilities are often complex, requiring trustees to balance the diverse interests of owners while adhering to the legal and financial requirements of the scheme.
However, trustees do not always fulfill their fiduciary duties, which can lead to significant consequences for the sectional title scheme. Fiduciary duty, as emphasized in the STSMA, requires trustees to act in the best interests of the body corporate, free of any conflicts of interest or personal gain. Trustees who neglect these obligations, whether by failing to act with the necessary care and diligence, mismanaging funds, or prioritizing their own interests, violate the trust placed in them. Such breaches can destabilize the scheme's financial health, delay essential maintenance, and even expose the body corporate to legal risks. Owners have the right to hold trustees accountable through formal processes, including the removal of non-compliant trustees or escalation of disputes to the Community Schemes Ombud Service ("CSOS") and/or through a court with competent jurisdiction.
The role of trustees, therefore, is both critical and demanding. While they serve as the custodians of the scheme's wellbeing, their decisions must be guided by transparency, fairness, and a commitment to the collective good. Trustees who fail to uphold their fiduciary duties not only compromise the trust of the community but risk undermining the very stability they are meant to protect.
Trustees are elected owners or nominated individuals tasked with administering and managing the scheme on behalf of the body corporate. According to the STSMA, trustees are appointed at the annual general meeting ("AGM"), where owners vote based on their participation quotas. While trustees need not always be owners, depending on the scheme's needs and circumstances, their decisions must reflect the best interests of all stakeholders. Section 7(1) of the STSMA highlights that trustees must act in good faith and with due diligence, ensuring that their decisions are reasonable and aligned with the act's governance principles.
Their role extends beyond simple administration. Trustees are responsible, often in tandem with duly appointed managing agents, for managing the scheme's finances, overseeing levy collection, and ensuring sufficient reserve funds are maintained for future repairs and maintenance. They are also tasked with maintaining common property, ensuring shared spaces such as gardens, driveways, and communal facilities remain in good condition. The STSMA obliges trustees to enforce the scheme's conduct rules consistently and fairly, while also representing the body corporate in legal and contractual matters. These responsibilities are often complex, requiring trustees to balance the diverse interests of owners while adhering to the legal and financial requirements of the scheme.
However, trustees do not always fulfill their fiduciary duties, which can lead to significant consequences for the sectional title scheme. Fiduciary duty, as emphasized in the STSMA, requires trustees to act in the best interests of the body corporate, free of any conflicts of interest or personal gain. Trustees who neglect these obligations, whether by failing to act with the necessary care and diligence, mismanaging funds, or prioritizing their own interests, violate the trust placed in them. Such breaches can destabilize the scheme's financial health, delay essential maintenance, and even expose the body corporate to legal risks. Owners have the right to hold trustees accountable through formal processes, including the removal of non-compliant trustees or escalation of disputes to the Community Schemes Ombud Service ("CSOS") and/or through a court with competent jurisdiction.
The role of trustees, therefore, is both critical and demanding. While they serve as the custodians of the scheme's wellbeing, their decisions must be guided by transparency, fairness, and a commitment to the collective good. Trustees who fail to uphold their fiduciary duties not only compromise the trust of the community but risk undermining the very stability they are meant to protect.
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Author: Razeen Khan, TVDM Consultants
