www.MyPE.co.za: This week, a reader asks our panel of experts to clarify his position as a body corporate trustee for the complex in which he lives.
Having held the position of trustee for a year, the reader applied for the post of general maintenance manager for the complex. He was interviewed and subsequently appointed.
The reader was prepared to resign as trustee but was informed that he could fulfill both roles.
According to him, the constitution for the complex states that “trustees shall be entitled to be repaid all reasonable and bona fide expenses incurred by them respectively in or about the performance of their duties as trustees”.
The trustees are not entitled to any other remuneration fees or salary for performing these duties.
The reader now finds himself in a predicament as to whether he should resign from one or the other position and has asked our panel of experts for guidance.
Jacques Ehlers from Du Toit Strombeck Attorneys in Port Elizabeth says the extract from the constitution corresponds closely to the Management Rules detailed in the annexures to the Sectional Titles Act of 1986.
“These provisions, however, relate to remuneration for any function performed as trustee. It could be argued that our reader is being remunerated, not for any duties he is performing as trustee, but in his position as manager of the complex.”
On the other hand, says Ehlers, the act also states that each trustee shall stand in a fiduciary relationship to the body corporate.
“As such, each trustee should act honestly and in good faith towards the body corporate. He must avoid any conflict between his own interests and those of the body corporate.”
But, says Charlotte Vermaak from Chas Everitt Port Elizabeth, the rules that apply to a sectional title scheme can be amended or repealed by a unanimous or special resolution of the body corporate.
“If everyone is of the opinion that the function of a general maintenance manager is necessary, there is no conflict of interest between the functions of trustee and manager. This may be reason enough to amend the rules, allowing the reader to maintain both positions.”
Vermaak says the fact that the position was advertised, and that the reader was interviewed before being appointed, is significant. “If he is the most qualified person for the job, there should be no reason why he cannot remain in his position as manager of the complex.”
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I have had a similar experience in our complex. It came to light that a trustee is not allowed to be “employed ” by the body corporate. The body Corporate is not a registered busines and paye issues and uif become a problem. There are issues like the body corporate members changes every year and this leads to all kinds of problems. It ends up where each trustee/home owner could become liable for legal costs etc when a dispute arises. It is much better and cleaner to appoint a sub contractor who lives out side the complex to maintain the complex and one of the trustees to supervise any major repairs or maintanance to be done.And this subcontractor contract would be reviewed annually.