A reader believes the body corporate of the sectional title complex in which she lives is administering it for its own benefit and wants to know what can be done.
A self-appointed husband and wife team run the body corporate, together with two trustees.
She says the body corporate has not increased the levies for two years and there has been no communication in this regard from it during this time.
The body corporate, she adds, seems to make decisions and administer the scheme in such a way that it serves the trustees’ personal needs.
See the reader’s question here.
The purpose of a body corporate is described in the Sectional Titles Schemes Management Act.
The body corporate is responsible for the enforcement of the rules and for the control, administration and management of the common property for the benefit of all owners.
The act sets out a list of the functions of a body corporate.
These include establishing and maintaining both administrative and reserve funds, raising levies from the owners in the scheme, seeing to insurance of the buildings and maintaining common property.
To carry out the broad functions of a body corporate, the authority granted to it is equally broad.
Certain counterbalances, however, do exist as the body corporate does not have free rein as to how it administers the scheme.
A trustee of a body corporate acts in a fiduciary capacity and the act outlines the responsibilities of the position.
He must act honestly and in good faith and exercise his powers in the best interests of the body corporate, without exceeding those powers.
The trustee must avoid any material conflict between his own interests and those of the body corporate and must not receive any personal economic benefit, directly or indirectly, from the body corporate or any other person.
In addition, he must notify other trustees of the nature and extent of any direct or indirect material interest which he may have in any contract concluded with the body corporate.
There is a key provision in the act which may be important to the reader.
This states that a trustee of a body corporate who acts in breach of his fiduciary relationship is liable for any loss suffered as a result or any economic benefit he may have received.
As the position is fiduciary in nature, it is clear a body corporate is not intended to be self-serving. The benefit of all owners should be the primary consideration in exercising its powers.
The reader’s concern appears to stem from administration taking place in a non-transparent manner.
Her levy is intended to be used for the administration of the scheme and the lack of feedback could have been addressed through one or more meetings during the financial year.
The owner has rights in respect of the calling of a meeting and our reader should engage the body corporate in the appropriate manner to do so.
A special general meeting could be called with the intention of replacing the errant trustees.
While other remedies are available, the various possible prayers for relief under the Community Schemes Ombud Service Act should be considered.
These provide for a broad range of relief which, depending on the specific nature of the issues, may be used to compel or prevent certain acts.
In this way, the body corporate could be forced to carry out the functions inherent to the position of trustee, including meetings.
The relief is sought by way of an application to the ombud, setting out the relief sought and the grounds upon which such relief are applied.
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