05 May The function and powers of sectional title trustees

Prescribed management rule (“PMR”) 7 requires owners who want to nominate trustees to do so in writing accompanied by written consent from the nominated person at least 48 hours before the annual general meeting (AGM). If the number of nominations received before the AGM equals the number of trustees decided upon at the AGM, there will be no need for a vote at the meeting as the duly nominated persons will simply fill these positions.

It is only at the actual AGM that the number of trustees for the ensuing year is decided upon and therefore it will not be clear whether or not the nominations received before the meeting are sufficient to fill the number of trustee positions until this decision has been made.

However, PMR 5 requires that the majority of trustees be owners (or spouses of owners). If there are more non-owners than owners (or spouses of owners) amongst the nominations, further nominations may need to be called for at the meeting to comply with this requirement.

Once all the nominations have been handed in, the attendees at the meeting must vote. Once the votes have been tallied, the chairperson must check how many of the trustee candidates are owners (or spouses of owners) and how many are non-owners. If the number of non-owners outweighs the number of owners (or spouses of owners), the non-owner trustee candidate with the lowest number or least value of votes must be eliminated.

This process is repeated until the correct number of trustees is achieved with the majority being owners or their spouses.

Once the trustees are elected, they will hold office until the next AGM. There is no other forum where the appointment of trustees can be made.

The powers of the trustees are set out in the Sectional Titles Schemes Management Act 8 of 2011 (“the STSM Act”) and the Prescribed Management Rules (“PMRs”).

Section 4 of the STSM Act gives the trustees the power to:

1. Appoint agents and employees for the body corporate.
2. Purchase, acquire, take transfer of, mortgage, sell, give transfer of, or hire or let units.
3. Purchase, hire or otherwise acquire movable property.
4. Establish and maintain suitable lawns, gardens, and recreation facilities on the common property.
5. Borrow money.
6. Secure the repayment of money borrowed and the payment of interest thereon.
7. Invest any moneys in the reserve fund.
8. Enter into an agreement with any owner or occupier for the provision of amenities or services by the body corporate, including the right to let a portion of the common property to any owner or occupier by means of a short-term lease.
9. Do all things reasonably necessary for the enforcement of the rules and for the management and administration of the common property.

Section 5 of the STSM Act gives the trustees the power to:

1. Alienate common property or any part thereof or let the common property or any part thereof under a lease.
2. Alienate or cede a right of extension of the scheme by the addition of sections;
3. enter into a notarial agreement to extend the period stipulated in the future development right of the scheme.
4. Purchase land to extend the common property.
5. Request the delineation and cession of registered exclusive use rights to particular owners.
6. Enter into a notarial deed of cancellation of a registered exclusive use right.
7. Execute on behalf of the owners a servitude or a restrictive agreement burdening the land shown on the relevant sectional plan and may accept on their behalf a servitude or restrictive agreement benefiting such land.
8. Approve the extension of boundaries or floor area of a section.

It is also important to note that all the functions and powers of the trustees are subject to any restriction imposed or direction given at a general meeting of the owners in terms of section 7(1) of the STSM Act and PMR 9(b).

The trustee’s ability to exercise any powers will always be subject to the approved budget of the body corporate. PMR 9(c) compels the trustees to apply the body corporate’s funds in accordance with budgets approved by members in the general meeting.

When nominating and voting for a trustee, it is important to choose an individual who you trust will act in good faith, with integrity, and in the best interest of members and not in their own personal interests.

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