Who does what? The roles and responsibilities of the Trustees, Managing Agents and CSOS.
Trustees:
Trustees are in essence, the decision makers.
Quite peculiarly, the relevant legislation does not provide a definition for a trustee however the Oxford Dictionary states: “an individual person or member of a board given control or powers of administration of property in trust with a legal obligation to administer it solely for the purposes specified.”
Any person can be nominated as a trustee by a member of the body corporate. A nomination must be in writing and must be consented by the nominated person. Trustees must be elected at an Annual General Meeting and at every subsequent AGM, thereafter.
Trustees stand in a fiduciary relationship with the body corporate and must comply with certain fiduciary duties, like those of the directors of a company.
Fiduciary (from the Latin fiducia) meaning “trust,” a person who has the power and obligation to act for another under circumstances which require total trust, good faith, and honesty (The Free Dictionary)
A trustee in a sectional title community scheme is an individual, who manages the scheme in accordance with the terms and conditions of the Sectional Titles Schemes Management Act, Sectional Titles Act and the Prescribed Management Rules of the Sectional Titles Schemes Management Act and this individual must ALWAYS act in the best interests of the scheme.
Trustees must act honestly and in good faith, and for the benefit, of the body corporate, within the scope of their powers and avoid material conflicts of interest.
Managing Agents:
Managing agents are not decision makers and do not carry a fiduciary responsibility to a community scheme.
Managing Agents may be appointed to assist the trustees and body corporate in the daily administration of the scheme.
A managing agent can be defined as a party (individual or organization) who provides management services to a scheme and is compensated for these services.
The role of the Managing Agent is mainly administrative and financial in nature and the duties are set out in a service level agreement (sla) entered between the scheme and the managing agent.
A Managing Agent may also deal with day-to-day maintenance checks, inspections and repairs of the scheme; however, this would fall under an “Estate Management” function and a sla that clearly defines this function (often for additional remuneration).
Very often, managing agents find themselves acting as the ‘intermediary” between members and/or residents of the scheme and the trustees, particularly when conflict issues arise between these parties and when a managing agent is in place,
instead of the members and trustees dealing with each other directly, issues are dealt with through the managing agent. Trustees are ultimately giving up their time voluntarily whereas Managing Agents are compensated for their time.
Community Schemes Ombud Services:
An ombud is a neutral or impartial party who helps resolve conflicts or concerns between individuals and organisations. An ombud may be appointed by the government or parliament but usually has a significant degree of independence.
An ombud investigates complaints and tries to find solutions through recommendations or mediation.
The Community Schemes Ombud Services (CSOS) may make binding decisions on behalf of a community schemes.
The service is there to regulate, monitor and control the quality of all community scheme governance documentation and provide dispute resolution.
The Ombud has jurisdiction to deal with any disputes in community schemes for instance : Financial, behavioural and scheme governance issues.
An application for dispute resolution to be lodged with an Ombud must be made. Section 38 (1) of the Act provides for locus standi (legal standing) with regards to parties who may approach the Service.
It indicates that any person who is a party to or affected materially by a dispute may make an application for adjudication of a dispute.
This means that the party making the application must have an adequate material interest in the issue to proceed.
Aside from dispute resolutions, the Ombud Service also exists to provide training for its conciliator and adjudicators and regulate, monitor and control the quality of all scheme governance documentation.