Written for Property Poser
A reader has approached the Property Poser experts about dubious behaviour by the chairperson of his sectional title complex.
Although she does not own a unit in the complex, she has nevertheless held the position for a number of years.
Furthermore, when it comes to decisions regarding the appointment of contractors and service providers, the reader says these people often turn out to be friends and acquaintances of hers.
The reader would like to know whether someone who is not a unit owner could be chair and whether the length of time the chairperson has been in her role is improper at all.
A sectional title scheme is controlled and managed by a body corporate, says Susan Chapman from Rawson Properties Port Elizabeth Platinum.
“As such it is responsible for the control, administration and management of the common property for the benefit of all owners.”
Chapman says the trustees look after the finances and running of the complex on behalf of the body corporate and are appointed by the owners at the annual general meeting.
“Anyone who is legally nominated and elected can be a trustee. This means that it can be a registered owner, relative or spouse of an owner, or tenant.”
As long as the majority of the trustees are owners or spouses of owners, there is a valid board of trustees, says Chapman.
“The trustees, in turn, will appoint a chairperson at their first meeting after the AGM. This means that a chairperson is, ultimately, merely a trustee and as such is trusted to act honestly and in the interests of the body corporate.”
Chapman says each trustee, and therefore the chairperson, stands in a fiduciary relationship to the body corporate.
“In terms of the Act, this relationship demands that a trustee act honestly and in good faith towards the body corporate, and must not exceed the powers granted to him or her by the Act, the management rules or the owners at a general meeting.”
In addition, Chapman says he or she must exercise these powers in the interest and for the benefit of the body corporate.
The mere fact that the chairperson knows the contractors is not sufficient to show that she did not act in good faith, says Stiaan Jonker of Smith Tabata Attorneys in PE.
“The decision to appoint a contractor is made jointly by the trustees by means of a majority vote.”
Jonker says a trustee must also avoid any material conflict between his or her own interests and those of the body corporate.
“A trustee, for instance, must not derive any personal benefit to which he or she is not entitled from the body corporate or any other person, where obtaining that benefit is in conflict with the interests of the body corporate.”
Such a person is furthermore obliged to notify all other trustees of the nature and extent of any direct or indirect material interest he or she may have in any contract entered into by the body corporate, says Jonker.
“If trustees are unhappy with the actions of the chairperson, there are some steps they can take.”
Jonker says the rules under the Sectional Titles Act provide that a chairperson will stay in office for a period of one year.
“A chairperson may be removed in one of two ways: either the trustees can remove that person by majority vote at a trustees’ meeting, or the body corporate can remove them by majority vote at a special general meeting.”
In both cases, the notice calling the meeting must disclose the intended removal of the chairperson from his or her office, says Jonker.
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