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Trustees – who are they?

The minimum number of Trustees for a Scheme is three with a maximum of seven (Schedule 1 Rules, Section 27(2) (a) (i)) provided that when there are 2 or 3 owners all the owners who are natural persons shall be Trustees.  Ideally a Trustee should possess skills or qualities which will be of benefit to the Scheme.  Accounting or legal knowledge, organizational abilities, knowledge of electrical or mechanical matters, the ability to type and bookkeeping skills are much in demand, and can save the Body Corporate a lot of time, trouble and money.  It is permissible to appoint a Trustee who does not own a unit in the Scheme, although this is not common practice.  At all times, the majority of trustees must be owners, or the spouse of an owner of a unit in the Scheme.  Trustees work on a voluntary, unpaid basis, although in special circumstances the Body Corporate may, by special resolution, agree to remunerate a Trustee.  A Trustee who is not an owner may be paid for acting as a Trustee.  All Trustees are, of course, entitled to be reimbursed for all legitimate costs incurred by them in execution of their duties. 

 2.             Rules – who make them? 

From the date upon which the Body Corporate of a Scheme comes into existence, section 27 of the Act provides that the Scheme must be controlled and managed by that Body Corporate in terms of and by means of Rules.

Different Schemes may require very different Rules and it is important that the Rules of a Scheme are properly suited to the needs of that Scheme.

As their names imply, the management rules control the running or management of the Scheme, while the conduct rules lay down guidelines for the conduct of owners and occupiers and their guests or tenants.

The Rules contain provisions which regulate the operation of the Body Corporate and the behaviour of Trustees.  These provisions are designed to ensure that all members of the Body Corporate are given an opportunity to participate in the control and management of the Scheme in an orderly fashion and that such management and control is properly affected in a manner which protects the interests of all owners.

Because the occupants of sections in a Scheme all live close to one another and share the use and enjoyment of the common property, it is important that each of them is aware and considerate of the rights of the others.  These provisions are not restrictions of individual liberties but are designed to protect the common right of all occupants of sections to peaceful and unobstructed use and enjoyment of their sections and the common property.

               2.1               Can the Rules be changed?

Yes.  The Body Corporate can change or amend the rules, providing that these changes are not against the intentions or spirit of the Sectional Titles Act.  Proposed changes must be put to members of the Body Corporate at a General Meeting, at which members will be able to discuss the proposed changes before being asked to vote for or against the changes.  Amendments to management rules require a Unanimous Resolution, while conduct rules can be changed by a Special Resolution.  Please note that such amendments will not become effective until registered at the Deeds Office.

3.             General Meeting

                The owners of units in a Scheme, gather at a general meeting to discuss and determine the  
                principals according to which the Scheme will operate and to deal with important matters           
                relative to the operation of the Scheme which are beyond the jurisdiction of the Trustees.

At general meetings of owners the individual members of the Body Corporate have an opportunity to satisfy themselves that the Scheme is being managed by the Trustees in accordance with the Act and the Rules and to query any action taken by the Trustees.

All general meetings other than annual general meetings are called special general meetings.  All business transacted at any general meeting is referred to as special business.

Annual general meetings must be held once in each calendar year and not more than 15 months may lapse between the date of one such meeting and that of the next.

Unless all persons entitled to attend agree to a shorter period, at least 14 days written notice must be given of every general meeting, be it a special or an annual general meeting, and such notice must specify the place, the date and the hour of the proposed meeting and set out, the general nature of the business to be transacted at that meeting.

Notice of each general meeting must be given to all owners, to all bondholders in respect of units in the Scheme who have advised the Body Corporate of their interest and to any managing agent employed by the Body Corporate.

 4.             What are managing agents? 

Managing and administering a Scheme, particularly a large Scheme, is complicated and time consuming.  Occasionally, the Body Corporate and Trustees undertake the entire task, but unless the Body Corporate is unusually well endowed with specialized knowledge and talents, this is seldom successful.  Most Bodies Corporate decides to appoint a Managing Agent, usually a company or close corporation which specializes in this aspect of Sectional Title administration.  If the managing agent is an Estate Agent he must be registered with The Estate Agents Board and hold a Fidelity Fund Certificate issued by the Board.  The managing agent sends out monthly statements, collects levies and all other money due by owners to the Body Corporate.  They keep the books, recover unpaid debts, prepare the annual budgets, arrange for quotes for repairs and maintenance, send out notices and generally assist the Trustees with the numerous time-consuming tasks which arise in administering a Scheme.  To protect and guide the Body Corporate, the managing agent must have a sound and comprehensive knowledge of the Sectional Titles Act and Rules.  A good managing agent can save the Body Corporate a lot of time, trouble and expense.

Normally the Managing Agent is appointed for a year at a time and unless the Body Corporate notifies the Managing Agent to the contrary the appointment is automatically renewed from year to year.  If the Managing Agent is in breach of the provisions of his contract with the Body Corporate or if he is guilty of any conduct which at common law would justify the termination of a contract between master and servant the Trustees can cancel the Managing Agent contract.