Sectional Title - Who may serve as chairperson of the body corporate’s board of trustees?
“Surely this person cannot be our chairperson?” – a question I often get asked by students and clients alike. With so much misinformation out there, I thought it would be helpful for us to take a closer look at the facts.
Ane de Klerk from The Advisory
While the chairperson must tick some boxes (which we will look at later), it is useful to first pay attention to the boxes a chairperson does NOT have to tick:
1. The chairperson does NOT have to reside in the scheme.
Contrary to popular belief, there is no legal requirement that the chairperson reside in a section located within the scheme. In fact, while it is certainly not ideal, it is not a legal requirement for the chairperson to ever have set foot in the scheme.
2. The chairperson does NOT have to own a unit in the scheme.
This is another popular myth. Legislation does not require that the chairperson own any property in the scheme. In other words, the chairperson of the board of trustees does not need to be a member of the body corporate.
3. The chairperson does NOT have to be a South African citizen and/or resident.
It is entirely possible for a non-citizen to serve as chairperson. For example, an attorney specialising in sectional title law who recently became an Australian citizen and now resides in Sydney may well serve as chairperson for a scheme situated in Sea Point. While this may, of course, pose some difficulties in practice, it is entirely possible and legal.
4. The chairperson does NOT have to have any particular qualifications.
While the regulations to the CSOS Act require that chairpersons take reasonable steps to educate themselves about the body corporates they serve and the legislation and governance documentation in terms of which they operate, a chairperson is not legally required to hold any particular degree or diploma (while I would naturally argue that holding a Paddocks/UCT Scheme Manager Sectional Title certificate can only be helpful). The chairperson does not have to have any particular career. While certain skills would undeniably be useful, a homemaker or gardener has just as much right to hold the position as a CEO or auditor.
Now that we know what the chairperson does not have to do or be, let’s take a look at who would in fact be ineligible to hold the position:
1. The chairperson may not be the scheme’s managing agent, unless they are also a member of the body corporate.
As a managing agent who does not own a unit in the scheme may not serve as trustee, they will also not be able to be appointed as chairperson.
2. The chairperson may not be an employee of the scheme’s managing agent.
As non-member employees of the managing agency appointed by the body corporate may not serve as trustee, they also cannot be appointed as chairperson of that body corporate. For example, a bookkeeper employed by the particular managing agency who does not own a unit in the scheme may not serve as chairperson of the body corporate, regardless of whether they work on that body corporate’s books of account or not.
3. The chairperson may not be of unsound mind.
Anyone declared by the court to be of unsound mind may not serve as a trustee and therefore cannot be appointed as chairperson.
4. The chairperson may not be someone who has been or is being sequestrated.
Anyone who is or becomes insolvent and such insolvency results in the sequestration of their estate may not be a trustee and therefore cannot be the body corporate’s chairperson.
5. The chairperson may not have been convicted of any offense involving dishonesty.
Anyone who is or has been convicted of an act of dishonesty such as fraud, forgery, perjury, theft or the like in South Africa or anywhere else in the world may not serve as trustee and therefore cannot be appointed as chairperson.
6. The chairperson cannot have been removed from an office of trust as result of misconduct relating to fraud or the misappropriation of money.
For example, someone who has been removed from a board of trustees after it came to light that they were falsifying invoices submitted to that organization for payment may not serve as trustee and therefore cannot be appointed as the body corporate’s chairperson.
7. The chairperson cannot be disqualified from serving as director in terms of the Companies Act.
While the Companies Act, 2008 does not regulate sectional title schemes and/or its management, someone who has been disqualified from holding office as director in terms of this act, may not be appointed as trustee of a body corporate and therefore cannot be its chairperson.
8. The chairperson may not be a member that owes the body corporate money despite a court or adjudication order having been obtained for the payment thereof.
For example, an owner who owes the body corporate R5 000.00 in arrear levies and has failed to settle the arrears despite a CSOS adjudication order having been issued, granting the body corporate’s application for an order in terms of section 39(1)(e) of the CSOS Act, may not serve as trustee of said body corporate and therefore cannot be appointed as its chairperson.
9. The chairperson cannot be a prisoner.
As anyone sentenced to imprisonment may not serve as trustee, they also cannot be the chairperson.
Learned something new about who may and may not serve as chairman of a body corporate and interested in broadening your knowledge even further? Read more about the Paddocks UCT Scheme Manager – Sectional Title online course, presented by Ané, here.
Article reference: Paddocks Press: Volume 17, Issue 7.
Specialist Community Scheme Attorney (BA (Law) LLB), Ané de Klerk, is a Director at The Advisory, a boutique law firm specialising exclusively in community scheme law.