Lake Properties Lake Properties
Here’s an in-depth elaboration on each responsibility trustees have in a South African sectional title scheme, along with key legal obligations and practical insights.
1️⃣ Financial Management
- Budget Preparation: Trustees must prepare a detailed annual budget that covers operational costs, maintenance, insurance, security, staff salaries, and more.
- Levy Collection: They must ensure that levies (monthly payments by owners) are calculated fairly and collected consistently.
- Financial Records: Trustees must maintain accurate accounting records of income, expenditure, assets, and liabilities.
- Audit Requirements: Financials must be audited annually or examined as required by the body corporate rules.
- Reserve Fund: As per the STSMA, trustees must establish and maintain a reserve fund to cover future maintenance costs and unexpected expenses.
2️⃣ Maintenance and Repairs
- Trustees must proactively maintain the common property to ensure safety, functionality, and aesthetic standards.
- Responsible for:
- Day-to-day maintenance (e.g., cleaning, gardening).
- Emergency repairs (e.g., broken gates, water leaks).
- Long-term repairs and upgrades (e.g., repainting, resurfacing roads).
- Implementation of the 10-Year Maintenance, Repair & Replacement Plan (MRRP) is mandatory. This plan forecasts what maintenance will be required and allocates funding accordingly.
3️⃣ Enforcement of Scheme Rules
- Trustees enforce both the conduct rules (behavioral rules for residents) and management rules (rules on administration).
- They must address:
- Noise complaints.
- Parking disputes.
- Pet policies.
- Unauthorized alterations to units.
- Enforcement must be consistent, fair, and legally compliant, including issuing fines where allowed.
4️⃣ Insurance Responsibilities
- The trustees must ensure that the entire building and common property are insured against:
- Fire, storm, flood damage.
- Public liability (claims from injuries on common property).
- Fidelity insurance (protects against fraud by trustees or managing agents handling funds).
- Insurance policies must be reviewed annually for adequacy.
5️⃣ Compliance and Legal Obligations
- Ensure full compliance with:
- Sectional Titles Schemes Management Act (STSMA).
- Community Schemes Ombud Service Act (CSOS).
- The scheme’s own rules.
- Trustees must ensure that annual returns are submitted to the CSOS, including governance documentation and levy schedules.
- They represent the body corporate in legal disputes, often with the help of attorneys or managing agents.
6️⃣ General Administration
- AGMs: Trustees must arrange and run Annual General Meetings where:
- Financial statements are presented.
- Budgets are approved.
- New trustees are elected.
- Special General Meetings: Called for urgent matters that require owners' votes.
- Record Keeping: Trustees must keep:
- Updated contact lists of owners.
- Minutes of all meetings.
- Copies of all correspondence, contracts, and service provider agreements.
- Communication with owners must be transparent, regular, and formalized.
7️⃣ Fiduciary Duty
- Trustees are bound to:
- Act in the best interest of all owners.
- Avoid using their position for personal gain.
- Avoid conflicts of interest and disclose if any arise.
- Act diligently and prudently.
- Breach of this duty can result in trustees being held personally liable for losses suffered by the body corporate.
✅ Summary of Key Laws and Guidelines
- Sectional Titles Schemes Management Act (STSMA)
- Community Schemes Ombud Service (CSOS) Act
- Prescribed Management Rules (PMRs)
- Prescribed Conduct Rules
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