A reader has asked the Property Poser experts to clarify the rules regarding the appointment of trustees in a sectional title complex.
Firstly, he would like to know whether more than one trustee may be appointed from a single unit, as in the case of a husband and wife, and, secondly, whether they would be allowed to nominate each other for the position.
According to Stiaan Jonker of Smith Tabata Attorneys in Port Elizabeth, the fiduciary relationship between the trustee and body corporate has been set out in the provisions of the Sectional Titles Act and its regulations.
“These provisions have been adopted by the Sectional Titles Schemes Management Act, which has been signed into law but is still to be proclaimed effective.”
Jonker says the Management Rules, which regulate the appointment of trustees, stipulate that he or she is not required to be an owner or the nominee of a juristic owner to qualify for office.
“The only proviso is that the majority of trustees must be owners or spouses of owners, and the managing agent or an employee of the managing agent may not be a trustee unless he or she is an owner.”
Subject to formal appointment by the general meeting, Jonker says it is unlikely that the selection of two trustees from a single unit would be challenged.
“Likewise, the cross-nominations, while a little unusual, are fine as the appointment of either or both is still subject to formal approval by the general meeting.”
With regard to the election of a trustee who is not resident in the complex, Jonker says it is possible as long as the majority of trustees are owners.
Susan Chapman from Rawson Properties PE Platinum says the general meeting will presumably elect those candidates most suitable for the scheme’s requirements.
“From a legal standpoint, it is more important that, once elected, the trustee understands his or her responsibilities and duties as a trustee, and abides by the provisions applicable to the office.”
Of utmost significance is the fiduciary relationship between the trustee and the body corporate, says Chapman.
“A fiduciary relationship exists between two people, where one person owes a duty of honesty, good faith and care for the other person.”
Chapman says the Act thus provides that a trustee must exercise his powers for the good of the body corporate and not exceed these powers.
“He or she must also not gain any personal benefit from exercising these powers. A trustee can be held responsible to the body corporate for any losses suffered or any personal gains made while breaching the fiduciary relationship.”
It would therefore appear that the position of trustee is reasonably accessible with few requirements, says Chapman.
“This is presumably to allow a larger pool of candidates from which to draw and make an election.”
However, says Chapman, actually carrying the mantle of trusteeship and carrying out the associated duties may be quite onerous.
“Should a trustee not perform, the removal is not particularly difficult and may be done by the owners at a general meeting.”