Real Estate Investor Magazine South Africa July 2014 | Page 34

MANAGING

BY MICHAEL BAUER

Protect Your Investment
Sectional Title Trustee Elections

V

ery good and very bad sectional title schemes
tend to have one thing in common: the owners,
who are automatically members of the body
corporate, do not see any need to be involved. In a
badly managed scheme, this can be disastrous.
It is irresponsible and very short-sighted for owners
in sectional title schemes to hand over what could be
seen as a multi-million rand investment to someone
else and not take an interest in the way it is run. A
poorly run section title scheme can result in poor
maintenance of the complex, which will make it
increasingly difficult to find and keep tenants at a
profitable rental, and could also lead to crippling levies
and special levies in the long run.

The buck stops here...
Owners in sectional title schemes are all responsible for
ensuring that their scheme is legally compliant and that
the finances are being managed properly. As members
of bodies corporate, owners must get involved, take an
interest in their schemes and point out to the managing
agent or a trustee any matters requiring attention. They
must also attend the scheme’s meetings.
Allowing yourself to be nominated and elected as a
trustee is one way of helping maintain the standards of
the management and financial control and getting the
necessary work done, thereby protecting your investment.
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July 2014 SA Real Estate Investor

Simple process
The nomination and election process is not complicated
if the rules are followed. Prescribed Management
Rule (PMR) 7 stipulates that owners must put their
nominations in writing and this, with the written
consent of the nominee, must be handed in at least 48
hours before the AGM or any other general meeting.
If there aren’t enough nominations, f ur ther
nominations can be taken from the floor at the meeting,
but this, too, must be with the nominee’s consent. PMR
5 requires that the majority of trustees must be owners
or spouses of owners, and if the nominations received
are more non-owners than owners, then further
nominations might have to be called for at the AGM,
in order to comply with this rule.
Once all the nominations have been received, voting
will take place and the votes tallied. The chairperson
will then check how many candidates are owners as
opposed to non-owners. If the number of non-owners
outweighs the number of owners, then the nonowner trustee with the least amount of votes must be
eliminated and the voting process is repeated until the
correct owner ratio of trustees is reached.

A few challenges
There cannot be fewer than two trustees, but the number
of trustees is only decided at the AGM and it is usually
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