It gives us great pride to celebrate our fifteenth episode of the PodAcademy Podcast (and of course here too on our blog for the avid readers among you!). This is a proud space for us at Reeflords. We get to create the forum for information-sharing on many aspects of what goes into the process of searching for and finding your dream home, and the next steps of making this an achievable goal.
From finance to municipal tips, estate (development’s) rules and regulations — and so much more — August’s Podcast and this blog cover “restrictions on trustees”. This topic came from a great question submitted as a topic-discussion request, asking us to explore what controls or restrictions an owner can place on the board of trustees (in the context of a complex), so that there is a consistent, transparent measurement of their activities too.
Grab a cup of your favourite refreshment and click here to play the podcast, and for those of you who prefer the written format, let’s get straight into it!
The Trustees in a Body Corporate are the appointed persons by all the owners of a Sectional Title Scheme, to make day-to-day decisions on behalf of the Body Corporate, that represent the best interests of the owners as a collective.
- manage the scheme,
- make many financial decisions (deciding on what to pay and what not to pay,
- manage maintenance plans, and
- review or change the rules of the complex.
What if they aren’t acting in the best interests of the owners? What if they fall behind with their responsibilities? What if they’ve gone rogue? With power comes great responsibility. Ergo, trustees must act in the best interests of the Body Corporate which is why there needs to be certain limitations on the Trustees.
Let’s look at the management of funds, where they are paid to, and how are they being used?
As a homeowner, you pay a lot of money into levvies, and will want to know that it is being spent responsibly. It is wise to use the Annual General Meeting (AGM) to specify and mandate a limit that can be spent on the funds. For example, your complex might need additional security ie. surveillance cameras. If during your AGM meeting you stipulated that a cap of R30,000* that can be used for security reinforcements, the Trustees are then:
- prompted to source transparent quotes based on a budget they have to spend, and
- cannot allocate more than the agreed amount on this particular exercise.
* This is not a guideline but simply a made-up figure for the purpose of this example.
Let’s look at the transparency with which the Trustees need to source and award jobs to suppliers.
Restrictions are required to make sure that the process of awarding and managing maintenance contracts is transparent. A common mandate is that no friends or family should be awarded jobs — just to minimise the risk of temptation or misinterpretation. It helps avoid a conflict-of-interest situation where corrupt processes such as kick-backs can (may) occur.
This isn’t to say that your cousin doesn’t run a very respectable waterproofing company, but rather to avoid any accusations that favours were done, and financial rewards were in place. If everyone commits to using unrelated, third-party suppliers, it helps to reinforce a far more transparent, fair and honest process all round.
Your managing agents will have a contacts book of reputable service providers that you can leverage on to get the best service at the most competitive rates.
Complex Rules and Regulations.
Let’s look at what happens when you feel that the day-to-day rules within the complex seem out of place and/or unfair.
Remember that the Body Corporate acts for the collective interest on behalf of all owners. That means that changes have to be agreed upon unanimously and can’t be changed by an individual who simply disagrees with them. This doesn’t mean however that you as an individual don’t have recourse to table your concerns as/when you have them.
You would be well advised to have a few conversations in and around the complex to find out how many other people might feel the way you do, thereby collecting consensus by more and more people, thus declaring that the relevant issue is one worthy of being reviewed by the Body Corporate / Trustees; this would then be tabled on the agenda for the next AGM. If that meeting is only many months in the future and you feel your issue is too urgent to wait, you might want to call a Special General Meeting (SGM) — and that would be set up with your managing agency.
Let’s look at how you would go about wanting a Trustee(s) removed.
Should you feel that the representatives chosen are not delivering as required, it is possible to have them removed — albeit by following the proper process. You would start by getting general consent from the other owners, followed by tabling a re-election (most commonly for the next AGM or SGM).
Pick your battles wisely
Your issues are important, because this is after all where you live. You should be happy as best as possible, but it’s also important to pick your battles. Remember that if you bought into a complex that is painted in Kalahari Beige (for example), it wouldn’t be a productive use of your time and efforts to say you don’t like that colour and would rather have them repaint the complex green. Certain aspects are a part of the predetermined design cues that were strategized and approved long before the foundation was even dug. And… have you considered all the options? What if you got your way and the decision was made to repaint the complex green; would you be happy when the bill arrived for a massive increase in the levy?
It is important to focus your efforts on what’s best for you and all the owners as a collective. So should you feel that Joe Soap isn’t doing what he signed up to do as a member of the Body Corporate and Trustees committee for example — and that that is letting several people down as well as perhaps even the value of your investment — then that’s a very worthy issue to have addressed at a regular Body Corporate meeting for the next AGM (or SGM where necessary).
We at Reeflords Property Development are excited for the journey you will go on when it comes to buying a home, and therefore want to help create a forum that gives you as much advice about the before-buying as it does for after-buying. It’s really about what to expect when it comes to all aspects of owning a home, so that there aren’t any last minute, nasty surprises.
If you have any questions related to this topic or anything within the realm of property (as a homeowner or investor), feel free to drop us an email on email@example.com or post them to our Facebook page.
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