Who is responsible to ensure body corporate compliance with relevant legislation?
When engaging with the students on our Paddocks UCT Scheme Manager – Sectional Title short course online forum recently, I noted the telltale signs of widespread panic among those who work as managing agents. The root cause of the distress appeared to be the fast-approaching deadline for schemes to become compliant with the POPI Act. It was apparent that the students were experiencing a great amount of pressure from their clients to draft legal documentation and ensure legal compliance without delay… but is this a fair expectation?
If you were hoping to turn to the Sectional Titles Schemes Management Act and the regulations thereto to ascertain whether legal compliance is one of the tasks allocated to managing agents you would note that there is in fact no list of managing agents’ duties in the act or the accompanying rules. In fact, while duties of the owners and trustees are clearly set out, legislation is silent on the managing agent’s duties, save to say that a managing agent may be appointed to:
“perform specified financial, secretarial, administrative or other management services under the supervision of the trustees.”
So the relevant legislation says nothing about the managing agent being responsible for drafting legal documentation or ensuring legal compliance of any sort. In fact, we know that section 7(1) of the Act places the obligation of performing the body corporate’s powers and functions squarely on the trustees’ shoulders. Therefore, when the body corporate has an obligation in terms of a piece of legislation, it is the trustees’ responsibility to ensure compliance.
Is there an exception to this rule?
The managing agent will only be responsible for ensuring legal compliance if this is in fact one of the administrative and/or management services specified in writing in its management agreement with the body corporate – and even then it must be done under the supervision of the trustees.
So who should ensure compliance?
As the trustees are responsible for ensuring that the body corporate is compliant, but are often unsure of how to achieve said compliance, my advice is to engage with and/or appoint a suitably qualified attorney with experience in the relevant field to guide the trustees and/or draft the relevant documentation to ensure compliance. As alluded to above, right now the popular topic is the POPI Act, but this applies to any piece of legislation.
Managing agents without suitable legal qualifications and experience in drafting legal documents should not be expected to do this, nor are they authorised to do so unless the task has specifically been delegated to them in writing. Without such written delegation of the body corporate’s responsibilities, performing such acts would be beyond the scope of the managing agent’s appointment.
Trustees should do the right thing and engage with and/or appoint the correct, suitably qualified professional(s) to ensure that the body corporate ticks all the relevant boxes.
If you would like a consultation to discuss these practical steps, you are most welcome to contact us at email@example.com for a no-obligation quotation for such consultation.
Author: Ané de Klerk – Senior Associate at The Advisory
Article Date: 25 May 2021
Article Reference: Paddocks Press: Volume 16, Issue 5.
Specialist Community Scheme Attorney (BA (Law) LLB), Ané de Klerk, is a senior associate at The Advisory, a boutique law firm specialising exclusively in community scheme law. Get in touch with her at www.theadvisory.co.za.
This article is published under the Creative Commons Attribution license.