For many property owners in South African sectional title schemes, the Annual General Meeting (AGM) is a routine formality. But when the call for nominations goes out, you might find yourself wondering: Should I become a trustee? It is an act of service that keeps a co-existing community functioning, yet it is far from a mere honorary title.

Before you raise your hand, it is essential to look beyond the prestige of the position. Governed primarily by the Sectional Titles Schemes Management Act (STSMA) of 2011, the role entails rigorous legal compliance. Here is what you need to know before you take on the keys to the complex.

Understanding the commitment: Eligibility and election

The barrier to entry for trusteeship is intentionally low to encourage participation, but the standards for staying in the role are high. Any owner who is up to date with levy payments can be nominated, and while you don’t need a law degree or an accounting qualification, a willingness to self-educate on the STSMA is expected.

The ground rules:

• Nominations: These must be accepted in writing at least 48 hours before the AGM.
• Composition: It is preferred that the majority of trustees or their spouses must be owners.
• Disqualifications: Individuals are barred from serving if they are in arrears with their levies, have been removed for misconduct (such as fraud), or are disqualified under the Companies Act.

What does a Trustee do?

Once elected, you become the executive arm of the body corporate. Your primary mission is to protect the investment of every owner in the scheme. This involves a heavy administrative and financial load that can take up significant personal time:

1. Financial stewardship: Trustees are responsible for levy collection, budgeting, and applying funds strictly according to approved plans.
2. Maintenance mastery: From the swimming pool to the roof, the oversight of common property maintenance is a primary trustee responsibility. This includes implementing a mandatory 10-year maintenance plan and managing the reserve fund.
3. Rule enforcement: You are the referee. Trustees must ensure that conduct and management rules are followed, often necessitating a firm but fair hand during neighbour disputes.
4. Governance: Holding regular meetings, distributing minutes within seven days, and acting on resolutions passed at general meetings.

The personal risk: Fiduciary duty and liability

In South Africa, trustees owe a fiduciary duty to the body corporate. This means you must act in good faith, with transparency, and always in the best interest of the scheme – never for personal gain. This is perhaps the most important thing to weigh before joining the board.

If a failure to maintain the building leads to a massive devaluation of property or a safety hazard, trustees can face personal liability. Under the Trust Property Control Act, negligence or mismanagement can even lead to staggering fines of up to R10 million or imprisonment in extreme cases of criminal breach. You can also be held jointly and severally liable, meaning you could be legally exposed for the actions of co-trustees if you fail to supervise them properly.

Avoiding the pitfalls: Mitigation strategies

The risks of mismanagement are real. South Africa has seen numerous cases where schemes fell into financial ruin due to underestimated budgets, leading to court-appointed administrators. Here a key ways to protect yourself as well as the scheme:

• Seek professional guidance: You aren’t expected to be a tax expert or a structural engineer. Hire reputable managing agents, attorneys, and accountants to provide professional advice.
• Meticulous record-keeping: If a decision isn’t in the minutes, it wasn’t made. Document every vote and the reasoning behind every major expenditure.
• Insurance is non-negotiable: Ensure the body corporate has robust fidelity insurance to cover fraud and that trustee indemnity insurance is up to date.
• Know the deed and the act: Read your scheme’s specific rules and the STSMA. Ignorance of the law is never a valid defence in a CSOS (Community Schemes Ombud Service) dispute.

Are you ready to take on the role?

Serving as a trustee is a vital role that requires a thick skin and a sharp eye for detail. However, if you have the time to commit and the integrity to put the community’s interests first, it is the most effective way to ensure your home remains a safe, valuable, and harmonious place to live.

 

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