The National Association of Managing Agents (NAMA), whose mission is to promote and advance the interests of community scheme management, plays a key role in this regard and holds a number of events throughout the year to educate trustees of Sectional Title developments and directors of Home Owners Associations (HOAs) as to their rights and duties.

It all comes down to knowing the law: in the case of trustees, the Sectional Titles Schemes Management Act (2011) and Prescribed Management Rules, and in the case of directors of HOAs, the Companies Act (2008), and for both, the CSOS Act (2011), which came into operation in 2016.

The latter Act actually stipulates that scheme executives are required to make themselves knowledgeable about the governance documents of their schemes.  However, it is widely acknowledged that many trustees and directors stand for election with no knowledge of the responsibilities – and risks – that come with that office, which is a major reason for the conflicts that arise in community schemes.

This was again highlighted at the NAMA Gauteng East Flagship Seminar held in Bedfordview in October.

Owners flexing their muscles

If many trustees and directors are out of touch with their responsibilities in terms of the law, there is also a definite trend towards owners flexing their muscles in terms of their rights, with the CSOS recording over 3000 new complaints in the past six months.

Marina Constas, a director of BBM Attorneys and CSOS board member, said: “The CSOS Act must be welcomed for its role in providing cheaper access to justice for owners who are faced with unreasonable rules and actions on the part of trustees and directors,” she said, adding that there are plenty of examples where this occurs.

However, she said there is also an emerging trend where owners make a point of making the lives of scheme executives extremely difficult and are hauling them to the CSOS at every opportunity, citing one example where an owner took his trustees to the CSOS no less than 14 times in two months.

Given this trend, Constas pointed to the need for scheme executives to familiarise themselves with the duties of owners, which are covered in Section 13 of the Sectional Titles Schemes Management Act, and Management Rule 30. She highlighted the need for delegates to understand these so that they can nip potential conflicts in the bud.

Trustees can be held responsible for financial losses

Failure to understand the risks faced by trustees if they are not conversant with their governance documents was also highlighted by speaker Alan Levy from Alan Levy Attorneys.  He discussed the financial risks of being a trustee, the duties and powers of trustees and prescribed processes for trustee meetings.  Delegates were taken through a step-by-step explanation of the relevant portions of the Act, leaving with a clearer understanding of how to avoid the unhappy situation where they would end up having to pay for mistakes out of their own pocket.

Scheme insurance is everyone’s business

Inasmuch as scheme executives need to familiarise themselves with the law, it is also incumbent upon owners to participate meaningfully in decisions that impact their biggest investment, their home.

This applies to the insurance needs of the scheme as well.  Charlé Halgryn from King Price Insurance told delegates that technology advances are increasingly available that will enable home owners to view data and hence participate in overall, optimal management of the insurance needs of the scheme.

 “Every community scheme is different and faces different risks and care must be taken to ensure that the policy properly matches the individual development’s risks and complies with regulatory requirements,” she said.

“Policies can vary vastly by how much excess the scheme must pay, hence it is important to understand the required cover, as well as the required risk factors and applicable excesses that would influence the cover.”

To stay abreast of trends in scheme management and to ensure that your scheme executives comply with the law, see http://nama.org.za/events/upcoming-events for upcoming training seminars.  NAMA and Enterprises University of Pretoria will in 2019 also launch the first course in Sectional Title Management.

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