ST trustees and their fiduciary duties – Johann Le Roux

While many duties in sectional title schemes can be delegated to a managing agent to handle, the trustees still remain responsible for the maintenance of the property and the financial wellbeing of the body corporate, says Johann Le Roux of Propell.

The word ‘fiduciary’ refers to a very simple concept – a trust relationship between the owners and the trustees, and there has to be a clear understanding that the trustee should have a vested personal interest in the success of the scheme as this will increase the value of that trustee’s investment, as well as that of the other owners, explains Le Roux.

“If you act on behalf of another you have a duty to act with care and in the other’s best interests and if you do not do this, you can incur liability for your misconduct.”

Le Roux says the duty of trust or fiduciary duty really means that the person responsible will exercise his powers in good faith and he will not act in his own interest or for another’s gain, but for the people (the owners of the sectional title units) he represents.

The trustees must, therefore display reasonable care and skill in handling the management and financial wellbeing of the scheme that they represent and work for.

He says trustees can contribute to change for the better in their scheme, and are personally able to influence the way in which the scheme is operated and its level of success, for example, they are accountable, in part, for the success or failure of that scheme, adds Le Roux.

This entry was posted in Latest News. Bookmark the permalink.

Comments are closed.