There are so many Community Schemes that suffer from the same problem: Owner apathy. How many Trustees of Sectional Title Schemes complain about the lack of attendance at their annual general meetings or even the lack of response to circulars requesting owner input?
Carl Smit, Managing Director of Sandak-Lewin Trust has been involved in managing community schemes since 1995 and confirms that owners only seem to get involved when Trustees make decisions involving an owner having to contribute a large amount of money to a special levy or if their apartment is affected by some unforeseen tragedy, for example a leak.
However, how can an owner be aware of what decisions are being made by Trustees, what issues are currently under discussion, what the current financial position of the body corporate is, and ensure that if major maintenance is planned the Trustees are forced to call a special general meeting?
According to Smit, “If owners have exercised the rights afforded them in terms of the Sectional Title Schemes Management Act and/or Rules they would be well informed by simply enforcing their rights afforded to them in terms of the legislation.”
These rights include:
All the above means an owner will be aware of what his/her body corporate Trustees are dealing with and ensure their investments are not at risk.
So many owners are quick to accuse the Trustees of mismanagement, yet they have not taken the time to first review the finances and engage with the Trustees to determine the real reasons why a Body Corporate is raising a special levy or delaying maintenance due to very valid reasons. This is not to say that there are instances where Trustees have acted contrary to the legislation or failed to comply with the Directions or Restrictions imposed upon them in terms of Section 7(1) of the Sectional Title Schemes Management Act or worse have not complied with Section 8 of said Act in terms of their Fiduciary responsibility.
Smit feels that owners are always addressing these types of issues after the fact and then it proves to be costly to each member as the scheme then needs to impose exorbitant levy increases or special levies to rectify the decisions taken contrary to the legislation. Many owners will say that where a managing agent is involved this does not happen, but Smit cautions that you cannot put your responsibility on a service provider. He advises that most likely the perception is correct if the managing agent is reputable and has the necessary expertise within the organisation to ensure the Trustees are acting in accordance with the legislation.
However, what if the managing agent does not have the expertise or worse is protecting the Trustees for their own financial gain?
“The only way to ensure you know if your investment is being protected is to keep yourself informed and this does not require a huge effort on the part of owners,” says Smit. He encourages all owners to attend the Annual General Meetings, whether online or in person. Further, Smit stresses that importance of understanding what the Trustees are intending on doing over the next 12 months until the next general meeting and hold them accountable if they don’t comply with the restrictions by replacing them with Trustees who will act in the interests of all owners.
Smit states that there is a law that has been written to prevent body corporates from being badly managed with the necessary checks and balances being the rights of owners. If owners are going to remain apathetic then who should they be blaming for badly managed Sectional Title schemes?