Trustees are referred to as ‘Scheme Executives’ (in terms of the Community Schemes Ombud Service Act No 9 of 2011). Scheme Executives can be sued in their personal capacity should they fail to comply with their fiduciary duties. Most importantly, Scheme Executives must ensure compliance with the Law.
In the interest of promoting good governance, Regulation 14 of the Community Schemes Ombud Service Regulations obligates a Scheme Executive to take reasonable steps to educate and inform himself/herself about the activities and affairs of the Scheme and the legislation in terms of which the Scheme operates, and to take reasonable steps to obtain sufficient advice and information about all matters to be decided upon.
The Sectional Title Schemes Management Act describes the various functions and powers of The Body Corporate, which powers and functions are performed and exercised by the Trustees.
Each Scheme Executive of the Body Corporate stands in a fiduciary duty to the Body Corporate and must at all times exercise his or her powers for the interest of the benefit of the Body Corporate and may not exceed or act without such powers.
Scheme Executives have an obligation to ensure that the appointed Managing Agent complies with its duties and obligations in terms of the Managing Agency Contract entered into, as well as complies with the relevant legal provisions.
Considering the above, the role of Scheme Executive is an exceptionally important one, and to be regarded with the utmost seriousness by the nominated/elected Scheme Executives as well as the owners’ whom the Scheme Executives will represent. Owners need to ensure that they are placing their properties in the hands of Scheme Executives who will ensure compliance with the Law and ensure that their properties are well looked after and protected.
Suggestions when nominating/electing Trustees:
- At the time of nominations/voting for Scheme Executives, nominees sign ‘Acceptance of Trust’ declarations acknowledging fiduciary duties, confirming familiarity with the Act & scheme’s rules, & roles/responsibilities as Scheme Executive. Too often this role is met with either complacency or lack of understanding of the Act, fiduciary duties & roles & responsibilities, which could have detrimental effects for members’ properties & ownership rights due to incorrect decisions made & actions taken by Scheme Executives.
- Elect an odd number of Trustees – this enables a definite outcome when voting on matters & avoids equal votes in favour of or against a proposed motion.
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