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|Apointment and Duties of Trustees|
Â Trustees are elected by the body corporate at its first meeting
and at every subsequent AGM. The rules prescribe a minimum of two
trustees, but do not prescribe a maximum number. Bodies corporate
should avoid the temptation to appoint too many trustees, as most
sectional schemes work best with a smaller number of active trustees.
Management rule 9 permits the trustees to appoint an alternate trustee
to replace a trustee who may be temporarily unavailable for any reason.
The term of duty of trustees is from one AGM to the next, but they are
eligible for re-election, if nominated. Their re-nomination is not
automatic. At all times, the majority of trustees must be owners or
the spouse of an owner.
Neither the managing agent nor any member of his or her staff or an
employee of the body corporate may be a trustee. Clearly, this
prevents a caretaker or supervisor from being appointed as a trustee.
Management rules 4-28 comprehensively deal with the trustees and thei
r role in Sectional Title.
Section 36(5) of the Sectional Titles Act excludes a body corporate
from the provisions of the Companies Act. It must be emphasised that
although the role of trustees is a very responsible one, they are not
a board of directors. Their powers are given to them by certain sections
of the Act and rules and are inherited from the body corporate in terms
of section 39. As previously stated, their powers are subject to the body
corporate's direction and restriction. For ease of reference, management
rules 26 and 28 are reproduced below:
26. (1) Subject to any restriction imposed or direction given at a general
meeting of the body corporate, the powers of the trustees shall include
(a)Â to appoint for and on behalf of the body corporate such agents and
employees as they deem fit in connection with-
(1)Â the control, management and administration of the common
(ii) the exercise and performance of any or all of the powers and duties
of the body corporate;
(b)Â to delegate to one or more of the trustees such of their powers and
duties as they deem fit, and at any time to revoke such delegation.
(2)Â Â The trustees may not make loans on behalf of the body corporate
to owners of units or to themselves.
28. (1) Without detracting from the scope of the additional duties specified
in rules 29 to 45, inclusive, and subject to the provisions of such rules,
the trustees shall perform the functions entrusted to them by sections 37
and 39 of the Act.
(2)Â Â Â Â The trustees shall do all things reasonably necessary for the
control, management and administration of the common property in terms of
the powers conferred upon the body corporate by section 38 of the Act.
(3)Â Â Â Â The trustees shall do all things reasonably necessary for the
enforcement of the rules in force.
Management rule 12 states that trustees who act in good faith are indemnified
by the body corporate for any actions undertaken by them on behalf of the
body corporate. Trustees who are grossly negligent or act with mala fide
(bad faith) forfeit that indemnity and can be held personally liable for
their actions. It is worth repeating that trustees need not be owners of
units within the scheme, providing that the majority of trustees are either
owners or the spouse of an owner. However, a paid employee of a body
corporate, such as a caretaker or supervisor, may not be a trustee.
Trustees are required to meet regularly to discuss the affairs of the body
corporate and to make decisions affecting the scheme. At their first meeting
after being elected, the trustees must appoint a chairman.
It is important to note that the chairman is appointed by the other trustees
and not by the body corporate. The trustees at a trustee meeting or the body
corporate at a general meeting may remove the chairman from office, providing
that notice of such intention has been given.
Trustee decisions are reached by a simple majority vote of trustees present
at the meeting. If the trustees are evenly split in a vote, the chairman has
a casting vote. In such cases, a prudent chairman will exercise caution in
casting a deciding vote and will elect to vote against changing an existing
situation until the matter can be referred to the body corporate for decision.
The body corporate can stop any course of action embarked upon by the trustees
and as previously stated can impose restrictions on them.
Any trustee can convene a trustee meeting by giving the other trustees seven
days written notice of the meeting and the business to be discussed at the
meeting. The quorum for a trustee meeting is fifty percent, with a minimum
of two trustees present at the meeting. Trustees must be present in person
at a trustee meeting and not by a proxy.
Management rule 15 empowers any owner to attend any meeting of the trustees
and to speak but not vote at that meeting. It must be emphasised that
attendance is a right, and does not require any form of consent.