While being elected a trustee of a sectional title scheme is often seen as an onerous and time consuming job, those who do take up these positions should be commended as they are taking on the management of something that could be seen as a multi-million rand business, says Johann le Roux, executive director of Propell.
“The members of the body corporate would have confidence in the trustees integrity and ability to manage their scheme to have elected them into the position of trustees but a point to remember is that the members have voted for you and can also dismiss you if the job is not done properly,” says le Roux.
All actions of trustees in sectional title schemes are governed by the Sectional Titles Act and the Prescribed Management Rules. Trustees must familiarize themselves with these and maintain their position of trust, he said.
“To help those who are new to their positions as trustees, here is a simple list.”
Do budget correctly – correct budgeting is an important aspect of financial management and the scheme’s ability to pay all of its accounts every month. If this is done correctly there should be no need to raise special levies for unforeseen projects, as their will be a healthy and positive cash flow and perhaps even a reserve fund, he said.
Do play an active role in the running of the scheme. It is very important to know what is happening within the scheme and what maintenance or repairs are being undertaken, as well as by whom. Those who do not take an interest and ask questions cannot complain later if things do go wrong, le Roux warns.
Do appoint the right people to help in the management of the scheme. “Competent people will do the job correctly first time around, and should not have to be micro-managed,” he said.
Don’t neglect to increase the monthly levies if the financials show that this is necessary. Keeping members happy by keeping the levies low does not do anyone any favours, says le Roux. Low levies often lead to certain maintenance or repairs being neglected through lack of funds, or special levies having to be raised to cover large unforeseen bills.
“It is good financial practice to adjust the levies as soon as it is seen that the amounts coming in each month need to be increased in line with inflation or any cost increases.”
Don’t pay any contractors without first checking their invoices and the actual work completed. Know what the job at hand was and what is being paid for, says le Roux.
“Check that the standard of the work is what is required as it is no good paying for shoddy work and then, when problems crop up later, having to pay again to get the job done properly,” he says.
Don’t neglect regular maintenance to the buildings, grounds or equipment. Neglecting maintenance can very quickly lead to deterioration which then leads to the value of the scheme and the properties within it decreasing, says le Roux.
“Your role as a trustee is a very important one and is vital to the effective running of the scheme as a whole. A good board of trustees, working together, will make sure that the scheme’s financials are good and that the management is effective and smooth. All the owners, in turn, will remain happy and your job should be less stressful overall.”