Share the load to achieve good governance in sectional title schemes

Achieving good governance is becoming an increasingly complex exercise in sectional title schemes, and trustees are advised to "divide and conquer" to ensure that while the workload is spread, no critical task is missed.  

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That's the word from Andrew Schaefer, MD of leading property management company Trafalgar, who says: "We highly recommend that each trustee should have a clearly defined portfolio of specific responsibilities that are then co-ordinated through the chairman, with the help of an experienced managing agent, to achieve completion of an annual 'masterplan' for their scheme.

"The considerable work and knowledge required to run a sectional title scheme can be divided into categories such as finance, legal, security, maintenance, HR and communication, for example, with each category containing a set list of specific activities for the relevant trustees to undertake and oversee during their tenure."

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This makes it much easier, he says, for the chairman and managing agent to keep track of what is happening in each area of responsibility - and quickly see where assistance or joint actions may be required to achieve the overall objective. "What is more, we have found that this approach really improves the efficiency and the effectiveness of the trustees as a group.

"Meetings are shorter, segmented communications are more direct and specific, and trustees are generally happier too, because they don't feel overwhelmed by a huge amount of information they need to take in, or individually overburdened with things to do."

And this is vital, says Schaefer, because the huge majority of trustees are not professional accountants, lawyers or property managers. They are "willing amateurs" who have volunteered to give up their own time not only to ensure the day-to-day wellbeing of their scheme and their fellow residents, but also to protect and increase the value of the assets in the scheme.

"This is a huge responsibility, and even the most diligent trustees are likely to give up and resign if there is no fair division of work or team effort, and just one or two people end up carrying the whole burden."

It is also very important, he says, that the trustees enlist the help of a professional and knowledgeable managing agent like Trafalgar to help them compile their masterplan and the breakdown of tasks to ensuring that the scheme remains financially and legally compliant.

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In addition, Trafalgar has the resources and expertise to be able to assist the relevant trustees directly with certain "best governance" requirements, including:

1. Registration with SARS of a Public Officer to handle any tax queries and submitting the scheme's tax return after the annual audit is signed;
2. Registration with the Information Regulator of an Information Officer and implementing procedures to ensure the scheme's compliance with POPIA;
3. Sending an engagement letter to the scheme's appointed auditor after each AGM and ensuring that audits are completed by the third month of the new financial year at the latest;
4. Obtaining or renewing the necessary compliance certificates for the fire-fighting equipment, electric fencing and lifts;
5. Ensuring the compilation of a new insurance replacement valuation every three years and adjusting the premium accordingly so that the scheme remains correctly insured;
6. Drawing up the scheme's budget in the 10th month of the financial year and organising the AGM to take place within four months of the end of each financial year; and
7. Interviewing and selecting contractors to undertake any repair work or provide long-term services such as security, and supervising and evaluating work done when necessary.