Originally published on Paddocksblog.com
By Ané de Klerk
One of the most challenging aspects of managing sectional title schemes, has to be the widespread lack of engagement by owners. Whilst some schemes are spoilt for choice when it comes to the election of trustees, most struggle to get a third of their members to attend the meeting just so it can reach a quorum. So what do you do when the scheme objectively requires a certain number of trustees, but there quite simply are not enough members who are willing to take up arms and fight the good fight?
Here are 4 possible solutions:
- Elect non-member trustees
Remember that it is not a legal requirement that trustees be members of the body corporate. Some of the best trustees I have worked with have been tenants who care deeply about the schemes they reside in. Tenants who have been renting their apartments for some years, often have a much better understanding of the scheme’s needs than investor-owners sitting on the other side of the globe. If these tenants are willing to give of their free time to better the scheme they call home, why not elect them as trustees? - Appoint professional trustees
Since there is no requirement that trustees must be members, why not look into appointing a knowledgeable third party, such as an attorney or accountant to join the board of trustees? If these outside professionals are only willing to serve as trustees in exchange for payment and the body corporate is willing to foot the bill, remember to pass a special resolution to authorise remunerating such third parties before processing payment to them. - Appoint an executive managing agent
Another option you could consider is appointing an executive managing agent. This type of managing agent will perform the functions and exercise the powers that would normally be performed and exercised by trustees and is obliged to do so with a professional level of skill and care. While you need to authorise the appointment of an executive managing agent by special resolution, it is not necessarily the end of the road if you are unable to obtain such resolution, as you could also apply to the CSOS for the appointment of such agent. - Appoint an administrator
If the scheme is not only struggling to find suitable people to appoint as trustees, but a lack of suitable trustees is also leading to serious financial or administrative mismanagement, the body corporate or any owner could apply to the local Magistrate’s Court for the appointment of an administrator. If the court finds that the body corporate will probably be able to meet its obligations and be properly managed if placed under administration, it will appoint an administrator and assign him/her such powers and duties of the body corporate as it deems fit. The appointed administrator must then exercise those powers and duties in such a way as to fix the body corporate’s management issues without delay.
If you would like to obtain more information about any of these options or wish to talk to an attorney about a related matter, contact us at info@theadvisory.co.za for a no-obligation quote.
