By Ané de Klerk, The Advisory

As most of us are aware, the office of trustee is not one to be taken lightly. It comes with a range of duties and responsibilities, is time consuming and requires commitment. While those with any experience in the field of sectional title scheme management will therefore warn anyone interested in being nominated to serve their body corporate as trustee that they should only do so after carefully considering the seriousness of the role, it is ironic that some unit owners are automatically placed in this position – often without even being aware of it.

Let’s take a closer look at two instances in which, often unsuspecting, owners are automatically deemed to be the trustees of their body corporate:

Case 1. Schemes with fewer than 4 members

I know what you are thinking: “It is not that strange that 3 members, each owning a unit in a 3-unit scheme are all automatically deemed trustees” and I agree with you. Equally so, it is unsurprising that the two owners of units in a duet scheme are automatically trustees. What I want to draw your attention to is that this could be the case in a scheme with 10 or even a hundred units and this is when it may catch an unsuspecting new owner by surprise.

As a practical example, let’s say that a rather withdrawn individual buys a small apartment overlooking the ocean to serve as his serene weekend-getaway spot. He purposefully bought into a 20-unit sectional title scheme as he did not want to deal with the workload that goes into maintaining a freestanding home – the budgeting, obtaining quotes, dealing with contractors, etc.

This would be simple, he will pay his monthly levies and, in turn, get to relax with a good book on his sea-facing balcony without a worry in the world. After taking transfer of his apartment however, he is made aware that he is automatically a trustee as it turns out 16 of the units are owed by a property investment company and 3 others are owned by a family trust – making him one of only 3 members of the scheme and a trustee by default.

As it is the number of members, rather than units, that are relevant, it is unlikely that potential buyers will be aware of a situation like this until well after they have become a member of the body corporate. This is one of the reasons why it is important for potential buyers to ask sellers and/or estate agents how many members a scheme has. Do not assume that a large scheme has many members.

Case 2. The period between the establishment of the body corporate and the end of the first general meeting

The second situation in which people are trustees without necessarily being aware of it is far more common. From the date on which the developer of a new sectional title scheme transfers the first unit to anyone else until after the first general meeting has been finalised, all owners are trustees. While the Sectional Titles Schemes Management Act (“the Act”) requires that this inaugural meeting be convened within 60 days of said first transfer, in practice this interim period between establishment of the body corporate and ending the first general meeting is often as long as a year. For this entire period, those owners are deemed the body corporate’s trustees, carrying all the responsibilities and required to fulfill all the duties set out in the Act and the prescribed rules thereto.

This is one of the reasons why it is important that new owners put pressure on any developer who delays calling the inaugural meeting to do so and why they should not hesitate to call the meeting themselves if the developer fails to do so within the allotted 60 days.

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