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Role of a trustee in a body corporate

A trustee is a person who has been elected to represent the other owners of a body corporate (of a sectional title scheme).

Trustees are elected from one annual general meeting (AGM) to the next.

They are the people who act on behalf of all the other owners when dealing, on behalf of the body corporate, with outside people and other owners.

For example, the trustees’ duties include setting the levy, enforcing the rules of the body corporate and approving payments of accounts, almost all of which is actually done by your managing agent with the trustees’ direct or indirect approval.

No matter the size of a building, there must be a minimum of two trustees and while there is no maximum number, it is seldom that more than five trustees are elected.

At least 50 percent of trustees must be owners of units or their spouses.

Trustees are not paid for the work that they do, though they should be recompensed for the costs that they incur, such as actual phone call costs.

In special cases, trustees can be paid for their special skills – for example, an outside trustee at a golf course who is elected because of his specialised golf course skills.

This must be approved each year at the AGM.

The trustees elect a chairperson between themselves and this is the person that the managing agents report to on a day-to-day basis.

Trustees hold their own meetings.

While some meetings of trustees are fairly informal, proper trustees meetings should be held with proper notice and include the managing agents.

These are official meetings and should be recorded like any other meeting.

In body corporates that have managing agents, these formal trustees meetings take place one or two times a year as necessary.

Trustees are in a fiduciary relationship with the body corporate and other members.

Put simply, this means that they must run the building in the most ethical way and not to their own benefit.

In terms of the sectional title management act, trustees are not even allowed to be present when items are discussed that affect them directly and may not, for example, give quotations to do work for the body corporate themselves or through their companies.

A good trustee is one that wants to be a trustee for the right reasons.

They are not there to enforce rules like an army major but rather to run the building like a good director of a company – that is to oversee the day-to-day running of the building, to make sure that things are done correctly at the right time and to make decisions that are beneficial to the building and not necessarily for themselves.

  • Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant.

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