Consumer Information

Author: STONEWOOD
16 February 2021

HOW IMPORTANT IS IT FOR TRUSTEES AND MANAGING AGENTS TO UNDERSTAND LEGISLATION AROUND SECTIONAL TITLE LIVING? 

Managing a sectional title scheme is not an easy task; it requires time, knowledge and experience. For this reason, it is important for trustees to understand the legislative principles of sectional title living that governs it.

Choose the right managing agent

Unfortunately, trustees are not required to have a certain level of experience or knowledge and as a result of this, appointing a capable and knowledgeable managing agent is critical to the success of the scheme.

Let’s consider some of the key benefits of understanding sectional title living and the Sectional Titles Schemes Management Act (STSMA).

Saving time and money

Without sufficient knowledge on a subject, incorrect decisions are made which results in wasting time and unnecessary costs. The STSMA is a complicated piece of legislation and even those who work with the Act daily are sometimes uncertain about its interpretation.

Having a proper understanding of the legislation allows trustees, with the support of their managing agent, to make sound and accurate decisions. Where trustees make incorrect decisions that contradicts legislation, they may find themselves facing legal proceedings and incurring unnecessary costs.

Legal proceedings against the scheme and/or trustees

All decisions in a body corporate require specific procedures and to be followed up with resolutions. These decisions include those made by trustees at trustee meetings, and owners at general and special general meetings. When decisions are made randomly or at the inappropriate meetings, owners can challenge the trustees about their decisions and demand to have it reversed.

If trustees refuse to do so, even when they are proven wrong, legal proceedings can be instituted against the trustees. This is a very important aspect to consider as trustees are liable in their personal capacity for any wrongdoing which causes damage to the scheme and its members, be it of a financial or material nature.

In this regard alone it will only benefit trustees to understand the STSMA, and continuously strive to learn and understand any aspect of sectional title living they are not familiar with.

How are the rights of owners affected?

Trustees are appointed to manage the affairs of the body corporate for the benefit of its members. This means that the decisions taken by them must always be unbiased and transparent. Furthermore, they need to always be fair and reasonable, considering all members in the scheme equally.

One example where the rights of members must always be considered is when the scheme’s rules are amended or where rules are added. Trustees are not authorised to make these decisions or implement them without participation by the members; trustees are only allowed to suggest and propose changes or additions to the rules. These changes can only be implemented when the members have approved the changes. This way, all members get the opportunity to consider the effects of the proposed changes on their living environment and then vote according to their convictions.

Conclusion

The STSMA is very clear about the role and responsibility of trustees in the management of the scheme’s affairs. It is inconceivable to think that owners will make themselves available to serve as trustees when they do not understand their role in the body corporate’s structure.

Only continuous learning and training, as well as willingness to understand the legislation that applies to sectional title living will change this for the better.

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