Trusteeship in the Sectional Title environment

At every annual general meeting of a sectional title scheme a board of trustees is elected. This process is done by means of nomination. Contrary to popular belief trustees do not need to be owners in the scheme, however the nominator must be an owner. The Sectional Titles Act (ACT) though does prescribe certain conditions wrt trustees, most notably that a person cannot be nominated to act as a trustee if indebted to the body corporate. 

The trustee's role is principally to perform and exercise the functions and powers of the body corporate, subject to the provisions of the Act and any restriction and or directive imposed at an applicable AGM. This role however is broad and includes a myriad of functions, not the least of which are finance and levies, repairs and maintenance, enforcing the rules of the scheme and ensuring that adequate insurance is in place. 

Although managing agents may be employed to assist the trustees, and that certain duties may be delegated to them, the trustees are still ultimately responsible for the control and management of the body corporate, so any person considering accepting a nomination to act as a trustee should make themselves au fait with the basic provisions of the Act and be aware of what is expected of them. 

Having said that the Act does acknowledge that trustees are not necessarily professionals in this regard and therefore the Act indemnifies (refer Prescribed Management Rule12) the trustees against costs, losses, expenses and claims that may arise as a result of a trustee's actions, provided such action is both taken in good faith and does not constitute gross negligence. 

There are also several circumstances which could lead to the removal from office of a trustee, and these are more fully explained in Prescribed Management Rule 13 (Annexure 8 of the Act). 

The trustees should meet on a regular basis, quarterly meetings are often applied, to discuss the management accounts - particularly debtors, creditors, cash flow and performance to the approved budget. Other day to day issues such as repairs and maintenance and the enforcement of rules can be dealt with between the trustees and the managing agent, mostly by email, and ratified and recorded at the trustees' meetings thereafter.