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Today: Dec 14, 2010
| Apointment and Duties of Trustees |
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 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 their 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 the following: (a) to appoint for and on behalf of the body corporate such agents and (1) 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) to delegate to one or more of the trustees such of their powers and (2)  The trustees may not make loans on behalf of the body corporate 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)    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)    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. |


















