28 June 2021

How many trustees must a body corporate have?

Submitted by Aidan van Vuuren

A body corporate has the important role of managing and administering the land and buildings in a sectional title scheme. They enforce the legislation and rules in the Sectional Titles Schemes Management Act 8 of 2011 (the Act), the Management Rules and the Conduct Rules of the scheme. Basically, they act on behalf of, and in the best interest of, the owners. Owners appoint the trustees; a trustee does not have to be an owner, however, the majority of trustees must be owners or spouses of owners. A Trustee is a person or persons appointed by the owners of the units in the scheme to look after their investment in the complex.

A body corporate should have a minimum of two trustees in the sectional title scheme, according to the Act. The Act does not limit the number of trustees, so it is possible that all the owners within a scheme could potentially be trustees as well.

It is up to the Body Corporate to determine the number of trustees to be appointed, and usually, with larger schemes, there are more portfolios. More trustees allow for a much larger workload to be adequately handled. Interestingly enough, an uneven number of trustees helps to avoid deadlocks when voting.

What role do trustees play in managing a Sectional Title Scheme?

A large portion of the responsibility of a body corporate is all the financial aspects, such as paying rates and taxes, insurance premiums, maintenance expenses, payroll for estate staff, and similar. These expenses all need to be regulated and collected from each owner. The scheme entrusts trustees with the responsibility of all the decisions and management of the scheme so that it benefits all the owners, stays within budget, and ensures all their bills are paid.

Here are some of the other duties of trustees:

Ensuring the cleaning, maintenance and security of the sectional title scheme

Insurance against natural disasters

Maintenance, management and improvement of communal areas/facilities

Establish a fund for repair and management of common property

Drafting a ten-year maintenance plan for the scheme

Preparation and presentation of financial statements and reports at the AGM (Annual General Meeting)

The importance of the Annual General Meeting

The AGM plays an important role in the smooth running of the sectional title scheme. It ensures that all owners and trustees have the opportunity to discuss important issues that relate to the effective management of the scheme. It is also about protecting the investment of all the shareholders, ensuring their property value continues to grow.

It’s also where they decide on what to allocate available funds to, such as property upgrades or maintenance. In an AGM, trustees and owners will decide whether to use services like Debtor Finance and Project Loans from companies like Propell to expedite larger projects and make available necessary funds to secure much-needed maintenance.

If you are a trustee or an owner of a sectional title scheme and you’d like to know more about Propell’s Debtor Finance and Project Loans, please contact Propell for more information.

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