By Ané de Klerk
The following question was raised by one of our UCT Sectional Titles Schemes Management students last week and, as I believe it is one that pops up in bodies corporate from time to time I thought it would be a good idea for us to take a closer look at it together:
Question: “If I’m a sectional title trustee and I am temporarily unavailable because I am ill – can I nominate a fellow trustee to attend to my duties as a replacement trustee?”
An important element of this question is the use of the phrase “temporarily unavailable”. This is because the legal requirements for electing a temporary and permanent replacement trustee are different.
When a trustee is only temporarily absent or otherwise unable to perform their duties for a specific period of time, it is the remaining trustees that may, by trustee resolution, appoint someone suitably qualified to serve as a replacement trustee for the specified period. This would be the case if, for example, a trustee needs to have major surgery and would be unable to fulfil their duties for a limited time, but would be able to resume their role after their recovery.
So while the trustee that will be temporarily unavailable may not unilaterally appoint their replacement, the board of trustees have the authority to do so by majority vote.
If a trustee stops holding office permanently, a replacement trustee may be appointed by either:
- the remaining trustees by passing a trustee resolution; or
- the members present or represented at a general meeting by passing an ordinary resolution.
This would be the case if someone wishes to stop serving as trustee before the end of their tenure and they resign from their position by giving written notice to the body corporate or if the members remove a trustee from the board before their term has expired, authorising said removal by passing an ordinary resolution to that effect at a general meeting.
It also applies to those situations where a trustee has been disqualified from serving on the board for one or more of the following reasons:
- they have been declared by a court to be of unsound mind;
- they are insolvent and their insolvency results or resulted in the sequestration of their estate;
- they are or have been convicted of theft, fraud, forgery, perjury or any other offence involving dishonesty;
- they have been sentenced to imprisonment without the option of paying a fine;
- they have been removed from an office of trust as a result of misconduct relating to fraud or the misappropriation of money;
- they are or become disqualified to hold office as a director of a company in terms of the Companies Act;
- they fail and/or refuse to pay the body corporate money due to it after a court or adjudicator has issued judgment or an order for payment of the money;
- they are employees of the body corporate (unless they own a unit in the scheme);
- they have been appointed as the body corporate’s managing agent (unless they own a unit in the scheme); and/or
- they are employed by the body corporate’s managing agent (unless they own a unit in the scheme.).
So, when a trustee is permanently removed from office, they also do not have the power to appoint their replacement unilaterally, but in such instances the board and the members both hold the power to appoint the replacement trustee.
Take note that, in both of these scenarios, it is not one of the existing trustees that are given the responsibility to fulfil the absent trustee’s duties, but a third party (not already serving on the board) that is appointed as either a temporary or permanent replacement trustee, holding all the powers, responsibilities and duties of other trustees, including all fiduciary duties and obligations, for the period they serve as replacement trustee.
In closing, it is important to note that there is no legal requirement, not when a trustee is temporarily unavailable nor when they are permanently removed from the board, for a replacement trustee to be appointed by either the remaining trustees or the members. If it is practical for the remaining trustees to fulfil the board’s powers and functions and they are willing to do so with one man or woman down, they can do so. The option to appoint a replacement is just that – an option, not an obligation.
Specialist Community Scheme Attorney (BA, LLB), Ané de Klerk, is a Director of The Advisory, a boutique consultancy specialising exclusively in community schemes law. Her focus is legal education, which includes presenting seminars and running online and in-person training programs and courses. You can reach out to her via email at info@theadvisory.co.za to request an obligation-free quotation for assistance with queries regarding your board of trustees or other sectional title or HOA queries.
