A Body Corporate, in terms of Section 36 of the Sectional Titles Act 95 of 1986 (“ST Act”), shall be deemed to be established as soon as any person other than the developer of the scheme becomes an owner of a unit in the scheme. The Body Corporate will accordingly comprise of the developer and such other persons who became owners of units in the scheme.
The developer is compelled to convene a meeting of the members of the Body Corporate within 60 days from date of establishment of the Body Corporate. The agenda of this meeting is prescribed in the Prescribed Management Rules (“PMR”), annexure 8 to the ST Act. A developer who fails to call this meeting shall be guilty of an offence and will be liable upon conviction to a fine or imprisonment for a period not exceeding two years.
An agenda point at the first meeting, as referred to in PMR 50, is the “election of Trustees”. The tasks of the newly elected Trustees are to manage the affairs of the newly established Body Corporate. The role of Trustees in a Body Corporate is very important for the wellbeing of the scheme.
It often happens, especially in smaller sectional title schemes that the Trustees in office resign with the consequence that the Body Corporate is left with no Trustees, alternatively only one Trustee who continues to manage and administrate the Body Corporate.
What remedies are available to owners where the Body Corporate is left without Trustees or asked differently, when it has become dysfunctional? There are two remedies available to the members, namely:
1. Any member of a Body Corporate may request and provide notice, in terms of PMR 53 & 54, to call a special general meeting whereby new Trustees can be elected during the said meeting. There are, however, the following requirements to be complied with for calling a special general meeting:
a. The member calling a special general meeting must, before the meeting is called, obtain the written support of owners who together have 25% of the total of the quotas of all sections;
b. Thereafter, proper notice of the special general meeting must be provided to all owners in the scheme. A minimum of 14 days’ notice will be sufficient to call the special general meeting, however, if special circumstances permit, the notice period may be shortened if all the owners agree thereto.
2. Alternatively, a member or a creditor of the Body Corporate may, in terms of Section 46 of the ST Act, apply to Court for the appointment of an administrator for the Body Corporate. A duly appointed administrator, in terms of Section 46(3) of the ST Act, shall, to the exclusion of the Body Corporate, have the powers and duties of the Body Corporate or such of those powers and duties as the Court may direct.
The first remedy is less expensive than the second, but it will be necessary for an owner to rely upon the second remedy in circumstances where it is not possible for the owner to comply with the aforementioned requirements to call a special general meeting.
Therefore, members of a dysfunctional Body Corporate aren’t left without a remedy and such members will be able to rely upon the mentioned remedies to get the management and administration of the Body Corporate back on track.
Article by Werner Loock – EY Stuart Attorneys