The body corporate committee has a vitally important role to play in that they are responsible for the day to day administration and control of the body corporate. There may be times where this importance is questioned, but this committee will make and implement decisions on behalf of the body corporate and these decisions, if not the right ones, can have serious repercussions financially and legally for the whole scheme.
It is important therefore for the committee to understand their roles and have all the basic tools and information necessary to do their jobs efficiently, says Mandi Hanekom, operations manager for Propell.
The committee is made up of the trustees and a chairperson and they get appointed at the Annual General Meeting. They will keep this position for twelve months and with every AGM this committee is be eligible for re-election if they are nominated.
The basic tools for trustees to carry out their required jobs are:
- · A copy of the Registered Management Rules
- · A copy of the Conduct Rules or House Rules
- · A copy of the Sectional Titles Act
- · A copy of the Sectional Plan of the scheme; and
“If your body corporate does not have copies of these documents on file, your first action would be to get your hands on them, as they are vital in the day to day running of a sectional title scheme,” she said.
The Act requires that all executive functions and powers of a body corporate are performed by the trustees but this does not mean they are the highest authority. They are elected by the owners and may be dismissed by the owners. They must heed the instructions and limitations imposed by owners and all their actions are subject to the Act and the rules.
Trustees of a body corporate act voluntarily and without compensation and they are only liable for losses or damages incurred by the body corporate if they act in a manner that can be described as grossly negligent or fraudulent. After the trustees’ election at the AGM, the trustees need to hold their own trustee meeting where one of their first points of business will be to approve a resolution determining the levies (approved by the owners at the AGM) for the next year. If there is no trustees’ resolution, it means that no levies have been determined and payment cannot be enforced in a court of law.
Trustees have basic functions to perform to ensure that their scheme is managed well. These are:
- Determining, collecting and administrating levies in respect of sections and exclusive use areas;
- Opening and maintaining a bank account;
- Insuring all building improvements including sections (but not their contents);
- Maintaining common property (including exclusive use areas);
- Keeping minutes;
- Keeping and administrating all records, including financial records of all body corporate transactions;
- Keeping a record of the current rules;
- Arranging and conducting the AGM and, when necessary, special general meetings;
- Preparing the documentation to be presented at each AGM, including the budget and audited financial statements;
- Trustees must keep proper books of account for the scheme. All monies received or spent by them must be recorded. Proper financial statements must be prepared and audited by a professional firm. It is of utmost importance that these documents be signed by the trustees and auditor.
In order to perform their functions or duties trustees are endowed with certain powers, said Hanekom.
Very briefly, trustees are given the power to:
- Appoint agents and employees, including a managing agent;
- Borrow funds for the performance of their functions and give security for such loans, including the cession of levies;
- Purchase or rent items such as lawnmowers, tools, etc needed for the body corporate;
- Establish recreation facilities, gardens and lawns on the common property where practical;
- Invest funds not immediately required;
- Obtain services by contracting with various service providers;
- Provide services by contracting with owners and occupiers;
- Let (for the benefit of the Body Corporate) parts of the common property to owners and occupiers;
- Gain access to sections and exclusive use areas for maintenance purposes; and
- Delegate powers and duties to individual trustees.
A good committee will be able to ensure that the scheme yields positive financials while running efficiently and, therefore, keeping tenants and owners happy, said Hanekom.
This information is published for general information purposes and is not intended to constitute legal advice. Specialist legal advice should always be sought in relation to any particular situation. Property Wheel will accept no responsibility for any actions taken or not taken on the basis of this publication.