Trustees vs Directors: What’s the Difference?

In community schemes, the decision-makers are called Scheme Executives – but the title changes depending on whether you live in a Sectional Title Scheme or a Homeowners’ Association (HOA).

Here’s how they compare:

Sectional Title Schemes (Trustees)

• Appointed at the AGM: Trustees are elected by owners each year; they automatically step down at the next AGM but may be re-elected.
• Legislation: Governed by the Sectional Titles Schemes Management Act (STSMA) and Conduct/Management Rules.
• Duties: Maintain common property, enforce rules, oversee finances, approve budgets, and ensure insurance compliance.
• Voting: Owners elect trustees, and trustees vote on operational matters at trustee meetings.

Homeowners’ Associations (Directors)

• Appointment: Directors are appointed according to the HOA’s Memorandum of Incorporation (MOI) if it’s a Non-Profit Company, or the Constitution if it’s a common-law HOA. Terms and appointment rules differ by document.
• Legislation: Governed by the Companies Act (for NPCs) or common-law contract principles (for Constitutions).
• Duties: Act as company’s directors with fiduciary duties – overseeing finances, levy collection, compliance with the MOI/Companies Act, and record-keeping.
• CIPC Requirements: Directors must be formally appointed or resigned through CIPC filings, with strict compliance obligations and personal liability if filings are not updated.

💡 While trustees and directors carry different legal frameworks and compliance requirements, the role they play is the same at its core: ensuring the scheme is well-managed, financially sound, and compliant with its governing rules.

Trustee or Director? Know your duties, avoid the risks. Get expert guidance from ANGOR