Should sectional title trustees be paid?

By Auren Freitas dos Santos

Serving as a trustee in a sectional title scheme is often a thankless task. Many trustees juggle late-night calls about malfunctioning lifts or loud parties, attend after-hours meetings, and sift through endless emails—all while navigating complex legislation that governs their role. Despite the crucial work they do, their efforts frequently go unnoticed and unappreciated.

Given the increasing demands placed on trustees, it’s no surprise that many trustees are asking whether they should be compensated for their time and effort. But is it legally permitted? And if so, how should a body corporate approach trustee remuneration? Let’s break it down.

Who Can Serve as Trustees?

A body corporate’s board of trustees may include both owners and non-owners. According to Prescribed Management Rule (PMR) 6(1), found in Annexure 1 of the Regulations to the Sectional Titles Schemes Management Act (STSMA), a trustee does not need to be a member of the body corporate.

However, certain individuals are disqualified from serving as trustees. Specifically, non-members who are also the managing agent, or an employee of either the managing agent or the body corporate, cannot be appointed as trustees.

Can Trustees Be Paid?

Yes, but with conditions. PMR 8(2) states that trustees who are members of the body corporate may be remunerated, provided that their payment is approved by a special resolution of owners.

How Can the Body Corporate Fund Trustee Remuneration?

If a body corporate decides to compensate its trustees, it must ensure that the funds are raised appropriately. There are two main ways to do this:

1. Incorporating trustee remuneration into the annual budget: The cost can be included in the administrative budget, which is approved at the Annual General Meeting (AGM). This ensures transparency and allows for the expense to be covered in the levies collected from owners. However, since budget approvals only occur at AGMs, this method cannot be implemented mid-year.
2. Raising a special contribution: In certain cases, the trustees may opt to raise a special contribution under Section 3(3) of the STSMA and PMR 21(3)(a) if trustee remuneration is deemed necessary but was not included in the previously approved budget. However, this approach requires careful handling—trustees must first obtain a special resolution from members before implementing the contribution. Without this approval, the expense cannot reasonably be classified as “necessary.”

What About Non-Member Trustees?

If a body corporate wishes to compensate trustees who are not members, the rules differ slightly. According to PMR 8(3), non-owner trustees can only be paid if their remuneration is specifically included in the administrative budget and approved by an ordinary resolution at the AGM. Unlike member trustees, their payment cannot be funded through a special contribution.

The Case for Trustee Compensation

While many trustees serve out of goodwill, the reality is that fewer owners are willing to take on the responsibility. As trustee duties become more complex, bodies corporate may need to consider offering modest remuneration as an incentive. Doing so could reduce reliance on costly executive managing agents, who charge significantly more for carrying out similar functions.

If your body corporate is considering trustee remuneration and needs assistance in drafting the necessary special resolution, contact us at info@theadvisory.co.za for a no-obligation quote.

Specialist Community Scheme Attorney (LLB, LLM), Auren Freitas dos Santos, is a Director of The Advisory, a boutique consultancy specialising exclusively in community schemes law. Reach out to him via email at info@theadvisory.co.za to request an obligation-free quotation if you require assistance with payment of your scheme’s trustees.