How to Take Trustee Decisions via Email
By Jennifer Paddock
Trustee decisions can be taken in one of two ways:
1) At a meeting of trustees, by majority vote.
2) By round robin resolution – a written document signed by all the trustees in South Africa at the time, but not less than the number required to form a quorum (ie. 50% of all trustees at the time) and not less than 2.
The Sectional Titles Act and prescribed rules do not specifically state that trustee decisions can be taken via email, but in practice this is how many trustees choose to make decisions.
The trap that many trustees fall into is they think that they can take decisions on email by majority vote… WRONG!
Trustee decisions can be taken by majority vote at a meeting of trustees, but a series of separate email exchanges is not considered a meeting in terms of the South African common law, which requires a meeting to be synchronous (existing or occurring at the same time).
Therefore, the only way for trustees to properly take decisions over email is to consider each decision taken this way as a round robin resolution of the trustees.
This means that the requirements for a round robin resolution of the trustees needs to be met:
1) A written document: In terms of section 12 of the Electronic Communications and Transactions Act, a requirement that a document or information be in writing is met if it is in the form of an email. So this requirement is not a problem.
2) Signed: Section 13 of the Electronic Communications and Transactions Act provides that where the signature of a person is required by law, that requirement is met if an advanced electronic signature is used. If the trustees don’t have advanced electronic signatures, a proposed resolution can be emailed to all trustees and they can print, sign by hand and fax/scan and email this back.
3) By ALL the trustees present in the Republic: All trustees present in South Africa must “sign” this “written” document ie. write in their email that they are in favour of a particular decision being taken. This is the problematic requirement because it means that approval by the majority of trustees in the country is not sufficient. ALL the trustees in SA need to agree via email before this requirement is met.
4) Being not less than the number required to form a quorum (ie. 50% of all the trustees at the time) and not less than 2: All the trustees in the country must total at least 50% of the total number of trustees for the time being, and that number must not be less than 2 for this requirement to be met.
So there you have it.
If the trustees of a scheme want to take decisions via email they should ensure that they meet all four of the requirements for a trustee resolution taken by round robin procedure as set out above.
Did you learn something from this post? Do your trustees take decisions via email? Share with us by commenting below.
Image source: http://www.123rf.com
Thinking Inside the Box 
In the case of physically signing, scanning and returning a proposed resolution, should this be done in such a way as to result in one piece of paper with all the trustees’ signatures on it, or can one have several pieces of paper, each with the signature of a single trustee on it?
Also, would there be any possible legal validity to each trustee signing a piece of paper, scanning their own signature, saving it on their computer, and then inserting this at the end of their e-mails?
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If the trustees meeting is held by email, re MA instruction, then the meeting is “secret”:
Trustees only at meetings?
Myburgh Brink replied on Thu, 05 Mar 2015 at 21:24
Owners are entitled to attend trustees’ meetings i.t.o. PMR 15 (5). Unless this rule has been changed by unanimous resolution of the BC, trustees and especially the chairman who should at least know the basics of the legislation, owners cannot be excluded. If the reason is that something of a “confidential” nature is going to be discussed how is he going to get around PMR 34? Is he going to refuse access to minutes? Is he going to fiddle the minutes to supply something he wants the owners to see? What has he got to hide? If your scheme has an MA it would be expected they would inform the chairman of the illegality of his idea, but?..
Thomas Groenewald replied on Thu, 05 Mar 2015 at 22:27
It is important to keep in mind that the trustees are accountable to the body corporate, the collective of owners.
It sound fishy if a chairperson has issues to hide from the members of the body corporate.
SO IF MA AND TRUSTEES REFUSE TO SEND A DETAILED AGENDA OF TRUSTEES MEETING, AND REFUSE TO INFORM THE OWNERS OF WHERE AND WHAT, AND REFUSE TO PROVIDE TRUSTEE MEETINGS MINUTES, AND HOLD SECRET EMAIL MEETINGS, TO QUOTE THOMAS, IT IS FISHY.
SHOCKING THAT MA does not inform trustees of the illegality of such actions. as stated in STO
However, if the request is made in the best interests of the complex, for example, if trustees are perceived to not be doing a good job, an owner finds himself in an embattled position and is not receiving the necessary help from the trustees or there is an important issue facing the complex, then information has to be provided.
Extract from Costas on www”
Constas uses a complex in Pretoria that has been built on dolomite and was sinking into the ground as an example of this. “It turned out that the trustees were trying to hide this from the owners. When an owner asked the managing agent for the owners’ details so that he could inform them, his request was denied.”
Other grey areas which are open to interpretation include ‘fiduciary duties’, the ‘master servant relationship’ and more. She cautions that those processing personal details need to distinguish between public and private information. Information held at the Deeds Office is publicly available, and falls under the Deeds Registry Act. This is not protected using the POPI Act.
Constas says she envisages that the interpretation of the POPI Act will lead to a number of disputes within the sectional title industry. However, expecting to have 100 percent agreement at all times in sectional title is simply not realistic, she says. Disagreements are likely to arise either because of inadequate knowledge about POPI or the responsibilities that it entails, or because of misuse, she says. All parties need to keep in mind that there are avenues for resolving disputes, especially mediation: from STO
The legislation governing sectional title schemes not only does not make provision for informal meetings of any kind, but prescribes certain formalities applicable to ALL meetings (due notice, quorum, minutes). Convening informal meetings of the kind you describe also infringes the rights of ALL members of the BC, any or all of whom is/are entitled (in terms of PMRs 15[5] and 34[3]) to attend and inspect the minutes of any and every meeting of the trustees if they so wish – and also have the right to expect the trustees to comply with the Rules (e.g. PMR 34[1]) in inter alia this regard.
Trustees are obliged to give sectional title owners access to minutes of meetings and to allow owners to attend trustee meetings
Although many owners of sectional title units take minimal interest in the actions and decisions of their bodies corporate – at least until things are clearly going very wrong – there will always be some who will resent not being informed. In these circumstances suspicions and allegations, true or false, tend to proliferate.
There is a simple solution to this situation: owners should ask the trustees for copies of their minutes.
“In terms of the legally binding prescribed management rule No 34 trustees have to make the minutes of their proceedings and of the body corporate available to any of their owners or mortgagees,”
“Prescribed management rule 15 (5) stipulates that owners are also entitled to attend any trustee meetings and to ask questions – although they are not allowed to vote.”
Owners sometimes discover that the trustees’ meetings are not being held as regularly as specified – or even that minutes are not being kept. It may transpire that issues pertaining to the scheme are not being tracked and monitored by the trustees and that the managing agents are not fulfilling their duties or that they are not receiving full co-operation from the trustees.
“Trustees are required by law to keep minutes of their proceedings, recording all special resolutions and resolutions taken by the body corporate,”
Conflict can and does occur in sectional title. The statutory context is far from perfect. Trustees get elected democratically to serve all of the owners. They remain accountable to these owners. Also do sub-groupings occur. These are the reasons why it is necessary to give proper notice of all meetings. The meetings must allow for opposing viewpoints and voting if necessary. Minutes are necessary because of the accountability. Any other situation is unacceptable and the acts of the four trustees suspicious.
How are the rights of owners, to attend and speak at trustee meetings (PMR 15 (5)), catered for if there are informal meetings where no due notice is given?
is this still applicable under the new Sectional Titles Act
A private meeting of persons that happen to be trustees is not a valid meeting. Refer to PMR 15 (prescribed management rules: all trustees are entiled to be notified; any owner is entiled to attend and speak. Refer to PMR 34: minutes shall be kept.
In my opinion a private session, of which no decisions taken were simply an informal discussion.
There is no such thing as an informal meeting. It is either a properly convened meeting which complies with the requirements for the type of meeting concerned, i.e. proper notice sent out to ALL those entitled to attend within the time frame required, agenda, quorum and minutes taken; otherwise it is just a social get together.
Trustee meetings are covered by PMR’s 15 to 24 and owners’ meetings by PMR’s 50 to 67.
The legislation governing sectional title schemes not only does not make provision for informal meetings of any kind, but prescribes certain formalities applicable to ALL meetings (due notice, quorum, minutes). Convening informal meetings of the kind you describe also infringes the rights of ALL members of the BC, any or all of whom is/are entitled (in terms of PMRs 15[5] and 34[3]) to attend and inspect the minutes of any and every meeting of the trustees if they so wish – and also have the right to expect the trustees to comply with the Rules (e.g. PMR 34[1]) in inter alia this regard.
Conflict can and does occur in sectional title. The statutory context is far from perfect. Trustees get elected democratically to serve all of the owners. They remain accountable to these owners. Also do sub-groupings occur. These are the reasons why it is necessary to give proper notice of all meetings. The meetings need not be 100% formal, but must allow for opposing viewpoints and voting if necessary. Minutes are necessary because of the accountability. Such an informal situation is unacceptable and the acts of the trustees suspicious.”
Summary from STO – please comment:
At our recent AGM, the owners voted against a Special Resolution to allow the trustees to hold meetings via Skype. Our MA (of our complex) , has now advised that trustees will be allowed to partake in meetings via Skype or telephone, as per PMR 15 (1).
Reply- When was PMR 15(1) updated. I have a copy of the Rules and it does not say anything about partaking in a meeting via Skype or telephone.
Reply – To start with, you would have needed an unanimous resolution allowing trustees to hold meetings via Skype, as it would have been an amendment to the Management Rules. (Explain to ) Trustees – with concrete examples, citing the relevant sections of the Act or Management Rules.A good example would be: any decisions taken by the Trustees at a Skype meeting will be invalid.
Reply- This question about a skype meeting has set me thinking. If you have 5 Trustees all at different locations I think the meeting would be invalid – but what about having a quorum all in the same room, and then other Trustees giving their input via skype? When it comes to taking a vote, only the Trustees in the main room would be counted. To me that would be perfectly legal and binding.
SPECIFICALLY PLEASE COMMENT ON “UNANIMOUS RESOLUTION TO CHANGE management RULES TO ALLOW SKYPE.”
ALSO PLEASE COMMENT ON POSSIBILITY THAT 2 trustees be in same room.
Hi Antoinette, if you would like our formal legal opinion on this matter please contact consulting@paddocks.co.za. Thank you
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Good day Jennifer,
We live in a small building run by a “Dictator”. We have questioned numerous dubious decisions (legal and financial) made and asked for the Resolutions/Minutes of meetings in this regard but nothing has been forthcoming. If no such documentation is on file, does this mean that the decisions made are not valid?
Evening Amanda, I’m not Jennifer. We live in a 12-unit complex where the “Chairman” (a real misnomer) is actually the Managing Trustee. Get your trustees together and vote him out. No scheme needs or wants a small man with a dictatorship, autocratic-style of running a scheme. Schemes should be democratic with democratic rules, however that does not often happen. The PMRs are your guidelines. It is your legal right as a member of the Body Corporate or as a Trustee to have sight of those Resolutions and Minutes of Meetings, as well as all financial documents. Should he not comply, choose another managing trustee and fire that “dictator”.
Thanks Ian. That’s what we are working towards but wanted to be sure of our facts first. We also have the problem of apathetic non resident owners who are sick and tired of this man but prefer to take a back seat and only step forward when a problem concerns them directly.
Amanda, non-resident Trustees are always a pain! They have a financial interest in the complex and little more. Get the Trustees together and select a new Managing Trustee. Majority vote can overrule current “dictator” who is then told to resign and leave the new board alone.
The previous Trustees – myself included – resigned on account of him and another member so it’s a matter of getting the Owners on board again. A daunting task but for the sake of our building, we have to do it….
Good Day ! Based on my experiences as a previous Chairperson of a BoT in a high density multiflat environment in a not so nice area of Pretoria, namely Sunnyside, I want to comment the following. In my environment it was already difficult to get Trustees to make any decision without debating even the smallest issue, sometimes for hours.It is probably the African way to do so and I don’t mean it negative. I tried to get decisions in preparing documentation with options [ decision briefs ] where the trustees had only to say yes / no / or other options. Specific when urgent decisions were required, sometimes on relative small issues. I distributed the proposals by hand .To no avail . We ended up with endless discussion again at the next meeting. I generally feel that many trustees are rectulant to make any decision and put their head on the block, as they should. So maybe the e-mail round robin resolution procedure may work in an more sophisticated environment where Trustees are used within their working situations to use e-mail based procedures.
The sooner the act is updated to except email as a way to make decisions and even hold meetings the better IMO
Couldn’t agree more Mike!
^^ ACCEPT ^^
Good news, will save a lot of time on urgent situations.
Sorry, I meant SA Tech Law. Not American.
Hello Ms Paddock
I agree with your opinion, save for your view that an e-mail signature constitutes an advanced electronic signature. In presume in this regard that what you mean by an e-mail signature is simply a name at the end of an e-mail.
Section 13(1) of the Electronic Communications and Transactions Act provides as follows:
“Where the signature of a person is required by law and such law does not specify the type of signature, that requirement in relation to a data message is met only if an advanced electronic signature is used.”
Section 1 of act defines an “advanced electronic signature” as “an electronic signature which results from a process which has been accredited by the Authority as provided for in section 37”.
Section 37 provides as follows:
“Accreditation of authentication products and services.—
(1) The Accreditation Authority may accredit authentication products and services in support of advanced electronic signatures.
[…]”.
Accordingly, in my view, a simple e-mail signature is not an advanced electronic signature.
In the circumstances, in my view, unless the managment rules expressly provide that a name at the end e-mail consitutes a siganture, every trustee required to sign a written resolution has to have an advanced electronic signnature in order to sign a writen resolution in an e-mail.
Thank you Bruce. On reading your summary I agree and have updated my blog post accordingly to take this into account. Thanks again!
Thanks Rod, I would like to hear the reply wrt the “advanced” electronic signature.
Johan
Hi,
An advanced electronic signature is email SSL certificate that identifies the identity of the individual and encrypts the email. An email SSL certificate allows you to sign the email that you are sending and bind your identity to the email..
Your identify is included in the email certificate, so that the recipient of your email can attest that the email was sent from the recipient.
An email certificate can be obtained from any commercial Certificate Authority (CA). The most well known CA in South Africa is Thawte (founded by Mark Shuttleworth). However, to order an email certificate, also known as a digital ID, look under Symantec, Globalsign or Comodo.
When ordering an email SSL certificate, it is important that you chose a product that provides you with an option to assert your name in the email certificate. The certificate authority is likely to ask you for a certified copy of your ID, Passport that assert the name and surname that you want in the email certificate.
Once your receive your email SSL certificate you will need to install it in your email client and when you send your email you will have an option to sign it at the time that you send it.
The act of binding your identity to an email certificate and binding the email certificate to the email you send out asserts your identity to the recipient and meets the requirements of the Electronics Communication Act.
I hope that helps. I am a senior product manager at Symantec and specialise in digital encryption and identity assertion.
Thanks
Kevin
So Whoopee! We have 3 trustees that exceeds the 50% quorum requirement. We have 4 trustees online and one computer illiterate so everything is printed. We all sign printed documents with a black pen and keep resolutions in the minutes book, stapled in.
in todays busy world of trustees or executives or owners it has become popular to converse, debate or come to agreement per email. in a homeowners situation where owners are spread throughout RSA, or likewise with owners of sectional title flats, a better response in numbers if not full 100% is obtained. a lot more thought is transferred on decisions and this enables the chairperson to collate and compare on input and ultimate decision made. however the only problem I experience is the Section 13 of the Electronic Communications and Transactions Act provides that where the signature of a person is required by law, that requirement is met if an advanced electronic signature (ie. email signature) is used. the emails I receive lack on this. unless I misunderstand this concept !?
Rod (now this is not electronic signature)
Hi Marieta. I’m glad you find the info useful. I’m not sure how to make the blog post more print friendly but I suggest you simply copy and paste the text into a word document and print from there without any images. I just tried it and it’s very print friendly. Good luck.
I agree that the info is very usefull. Marieta this is what I do, copy and past in a word document and delete/adjust then when you print, go to print options and select to print both sides of page. You can also select fast draft to save ink.
Depends largely too on which printer one has. On the Canon, I have “Fit to Page” option, so copy & paste is totally unnecessary. But as I said, it depends on your printer driver. Carefully check the “Properties” settings and options prior to wasting paper.
Good day, Thank you for very useful info – but I have only one problem:- Will you please consider a more print – friendly version with lighter colour OR give us the choice to delete the images which is 80% all black ? For the record, I have to print and keep for later reference – but my print cartridges can not keep up with ink!