Sectional title living: Are trustees a vanishing breed?

2017-08-10 06:03
Sectional title schemes, propertyFoto:

Sectional title schemes, propertyFoto:

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

It is unfortunate that the increasing popularity of Sectional Title (ST) living in SA over the past 15 to 20 years has not been accompanied by similar growth in the number of ST owners who are qualified or even willing to act as trustees.

Owing to this an increasing number of schemes are now turning to a new and little-known management rule to resolve the problem.

That’s the word from Andrew Schaefer, MD of national property management company Trafalgar, who says the whole ST “system” in SA is designed around the trustees elected by owners to manage the affairs of their ST schemes.

He said that things can quickly start to unravel when there are too few people willing to take on the responsibility.

“Effective trustees are the backbone of ST living and ultimately responsible for protecting home values in ST schemes. Even the ST legislation is written to empower the trustees to do certain things on behalf of the other owners, from collecting levies, setting budgets and enforcing conduct rules to organising the maintenance of the common property, arranging for any repairs necessary and appointing a managing agent.”

However, he notes, acting as a trustee – which is a voluntary, after hours and unpaid position - has become an increasingly complicated, time-consuming and often thankless job, with the result that an increasing number of schemes are now struggling to find enough people willing to take it on.

“And that could become a real problem for the sector, which currently accounts for around 40% of all new residential construction and an estimated R650bn worth of existing homes – unless more schemes start to make use of Prescribed Management Rule (PMR) 28, promulgated in October 2016.”

Schaefer says that under the Sectional Titles Schemes Management Act (STSMA) which came into operation last year, this little-known PMR provides for the owners that make up the body corporate to take a special resolution to appoint an “executive managing agent” to perform the functions and exercise the powers that would otherwise be performed and exercised by the trustees.

“Alternatively, if there are not even enough interested owners to hold a meeting and pass the special resolution, owners who collectively hold 25% of the scheme’s total participation quota can apply to the Community Schemes Ombud Service for the appointment of an executive managing agent.”

In terms of the rule, he says, this executive managing agent is:

. Subject to all the duties and obligations of a trustee under the STSMA and the rules of the scheme;

. Obliged to manage the scheme with the required professional level of skill and care;

. Liable for any loss suffered by the body corporate as a result of not applying such skill and care;

. Obliged to arrange for the inspection of the common property at least every six months; and

. Obliged to report to all the members of the body corporate every 4 months on the decisions taken with regard to the administration of the scheme and its finances, and the balance of its reserve and administrative funds.

“In short, the executive managing agent must be prepared to carry quite a heavy burden. So although the rule does provide a handy solution for bodies corporate that don’t have enough trustees, it is clearly also intended to ensure that they don’t make random appointments, but rather seek professional assistance from a property management company such as Trafalgar, which has all the necessary resources and systems in place to fulfil these obligations.”

Indeed, Shaefer says, the company is already acting as executive managing agent for several ST schemes, and the number of enquiries with regard to this service is increasing monthly.

(-Issued: Trafalgar Property Group)

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.
NEXT ON NEWS24X

Inside News24

 
Watch: Investing in the future through child development

An investment of R32-million into 11 early childhood development centres is changing the future for children in the Northern Cape.

Partner Content
What all investors should know about index investing

Index-linked investments are growing fast in popularity globally, and are growing in size and complexity too.

/World
 

Makeover saves dog’s life

Lucky Charlie got a complete make-over that helped him get adopted.

 
 

Paws

For the love of Corgis!
Can we communicate with our pets?
8 great natural remedies for your pet
Buying a puppy? Don’t get scammed!
Traffic Alerts
Traffic
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.