Thinking Inside the Box

A Paddocks Sectional Title Lifestyle Blog

Trustees and their powers

what-power-authority-trustees-have-sectional-title-schemes

By Zerlinda van der Merwe

In our consulting department, we are often told by owners in sectional title schemes, that the reason they cannot do something they would like to do within their unit or the scheme, is because the trustees have refused permission, or have told them that the consent of the other owners in the scheme, or their neighbours is needed. This frequently made statement emphasises the importance for an owner, and the trustees, of a scheme to know the different types of resolutions that exist, and in which circumstances a particular type of resolution is required to be taken.

In this article, we will take a look at some of the powers of the body corporate, as set out in sections 4 and 5 of the Sectional Titles Schemes Management Act, 8 of 2011 (the “STSMA”), that in terms of section 7 of the STSMA, is exercised by the trustees of the body corporate. However, it is important to note that the exercise of most of these powers are limited, in that a resolution or written consent of the members of the body corporate is required in order to authorise it.

The following powers can be exercised by obtaining a trustee resolution only, namely:

  • The appointment of agents and employees;
  • The approval of consolidation or subdivision of sections;
  • The signing of documents binding on the body corporate;
  • Calling general meetings;
  • Making an application to the CSOS for dispute resolution;
  • Joining organisations or subscribing to services (such as Paddocks Club);
  • Consenting to some issues and applications set out in the Prescribed Conduct Rules of the STSMA;
  • The investment of the income of the body corporate.

The following powers can be exercised by the trustees, once authorised by an ordinary resolution of the members of the body corporate:

  • The acquisition of movable property for the enjoyment or protection of the body corporate, subject to budget approval and restrictions;
  • The establishment and maintenance of gardens and recreation facilities on the common property, subject to budget approval and restrictions;
  • And the exercise of any power given to it by an ordinary resolution of the members at an AGM.

The following powers can be exercised by the trustees, once authorised by a special resolution of the members of the body corporate:

  • The acquisition and disposal of units within the scheme;
  • The borrowing of money, subject further to the securing of the money borrowed by it;
  • The entering into of agreements with owners for the provision of services, and agreements to let common property, on a short-term basis;
  • The cancellation of exclusive use rights;
  • The entering into of a servitude agreement;
  • The approval of an extension of a section.

The following powers can be exercised by the trustees, once authorised by an unanimous resolution of the members of the body corporate:

  • The extension of the period of extending the scheme;
  • The delineation and cession of exclusive use rights;
  • Alienating or leasing, on a long-term basis, common property, subject further to the written consent of the holder of a right to extend the scheme.

The following powers can be exercised by the trustees, once authorised by the written consent of all the members of the body corporate:

  • The entering into an agreement to purchase land to extend the common property;
  • Alienating, ceding or exercising a right to extend the scheme, subject further to the written consent of all bondholders.

As you can see from the above, it is important to know and understand what type of resolution can be taken by the trustees, and what types require member engagement, and to what extent.

If you have any queries relating to this article and topic, feel free to contact the writer, Zerlinda van der Merwe, via email at consulting@paddocks.co.za or telephonically on 021 686 3950, for a non-obligation quotation for a consultation.

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