27 Oct Why you should volunteer to be a trustee
The role of a trustee can be quite challenging.
Dealing with financial issues, maintenance issues, conflict between owners, tenants or trustees may put owners off from being trustees. Add to that the fact that trustees typically do not get paid for the time they invest in the scheme and you understand why some schemes struggle to find owners to volunteer as trustees.
The benefit of having productive and engaging trustees
Trustees are elected to represent all the owners in the scheme and manage its affairs thereof. For this reason, it is important that the correct people are appointed and that the chosen few take their role seriously.
Some schemes find themselves appointing the same trustees year after year; this is not always a benefit as those trustees may be reluctant to start off with.
Appointing trustees with knowledge of sectional title laws or with experience in financial management, the law or property maintenance will ensure that the tasks are competently performed. Experienced and dedicated trustees will address the issues in the scheme timeously and keep the members informed of all developments.
How many trustees must be appointed?
Unfortunately, the relevant legislation does not provide sufficient guidance to this common question, often raised at AGMs, except that there cannot be less than two trustees.
The general rule is that the bigger the scheme, the more trustees will be required. This does not mean more trustees will make the management of the scheme easier as too many trustees can be counterproductive, leaving trustees unable to perform their duties effectively.
As trustee decisions are based on a majority vote, taken at trustee meetings, it makes sense to always appoint an uneven number of trustees. This will remove the obstacle of an even vote where the chairperson is forced to decide the outcome with his or her vote.
Read more about this topic here.
The duties and obligations of trustees
Trusteeship requires daily activities such as interaction with the managing agent, meeting contractors to perform maintenance work and dealing with owners. Furthermore, they are required to attend trustee meetings and arrange the annual general meeting (AGM) or any special general meetings that may be required.
Trustees have a fiduciary responsibility to the body corporate and its members. This means that the trustees must exercise their authority in good faith and in the best interest of the scheme, and not for their own gain. One of the most important fiduciary responsibilities of trustees is to ensure that the scheme is adequately insured for replacement costs. An adjustment must be decided upon annually and every three years a valuation should be obtained to assist them in adjusting the scheme’s insurance correctly in line with the latest replacement cost.
Trustees are responsible for the maintenance and upkeep of the common property. It is their job to ensure that daily maintenance gets done timeously and long-term maintenance is properly planned for with a comprehensive 10-year maintenance plan.
Their responsibilities include managing the financial affairs of the scheme which entails ensuring that all members pay their levies and that all expenses are paid in time. When owners default on their levy payments, trustees must act accordingly by either approaching the Community Schemes Ombud Service (CSOS) or appointing an attorney to collect the arrear levies.
Can trustees be remunerated for their time and efforts?
Being a trustee can be a very thankless job as they spend hours of their personal time and typically, do not receive any payment. If a body corporate should choose to, they can elect to pay their trustees as long as this has been approved by the members at a special general meeting.
The Sectional Titles Schemes Management Act (STSMA) allows for the appointment of trustees who are not owners in the scheme. These persons can be from any walk of life but generally, they are appointed because they are experienced in managing sectional title schemes. Professional trustees can be appointed and remunerated if the members have approved such an appointment as well as the fees at a special general meeting. These professionals have the same authority as a trustee who is an owner but is indemnified against any costs, losses and expenses arising from any acts, provided it is not in breach of the trustees` fiduciary obligations.
Read more about trustees remuneration here.
Why owners should volunteer to be trustees
Schemes regularly find themselves appointing the same trustees every year because there is no interest from the other members. Although this may sound like a good idea it sometimes works against the best interests of the scheme.
Some trustees may take the role too seriously. If they are continuously elected, and given the powers and authority that comes with the role, some trustees may become authoritarian and draconian in their management style. This, inevitably, creates for a very unpleasant living environment.
All sectional title owners should make themselves available as a trustee for at least one term. This will help them to understand how a body corporate operates and what is required to manage the affairs of the scheme. It also allows for fresh ideas, different styles of management and a growing overall knowledge and understanding amongst members of what is required to make their body corporate successful.
Conclusion
While being a trustee can be hard at times, it can also be incredibly rewarding to see the scheme improve and to live in a scheme that functions well.
The way to alleviate the negative connotation with being a trustee, is to actually put yourself in that position so you can learn more about the operations of the scheme. If more people volunteered to be trustees and experienced the role for themselves, they will gain insight into the effort it takes to run a scheme. This will lead to a higher level of respect and trust in the people who are prepared to invest their time to help create a better living environment for all.