Managing a Sectional Title Scheme in South Africa is no small task. Scheme executives, also known as trustees, are responsible for ensuring their community runs smoothly, remains financially stable, and adheres to legal requirements. However, many trustees step into their roles without the necessary knowledge or training, leading to significant challenges. Without the right expertise, trustees can struggle with financial management, conflict resolution, and legal compliance—three of the biggest hurdles they face.
Financial Management – The pressure of balancing the books
One of the most daunting tasks for trustees is ensuring the scheme’s financial stability. From budgeting and levy collection to managing reserve funds, there is a lot to keep track of. Many trustees quickly realise that creating a realistic budget isn’t as simple as it seems. Inflation, unexpected maintenance costs, and unpaid levies can throw finances off balance, making it difficult to keep the scheme running smoothly.
In many cases, trustees also find it challenging to enforce levy collections while maintaining good relationships with owners. No one enjoys chasing payments, and when levy arrears start piling up, the financial strain can lead to difficult decisions, such as introducing special levies. Understanding financial reports and making informed financial decisions also becomes overwhelming without the right knowledge and expertise.
In Johannesburg, a sectional title scheme recently faced financial distress due to poor budgeting. Trustees underestimated costs, and when reserves ran dry, they had no choice but to impose a special levy. Owners, unprepared for the sudden financial burden, pushed back, causing tension within the community. Had the trustees been equipped with proper financial management skills, they could have planned ahead and avoided this crisis.
Conflict Resolution – Navigating disputes among owners and trustees
Living in a community means different personalities, expectations, and opinions are bound to clash. Trustees often find themselves caught in the middle of disputes between owners, whether it’s about noise complaints, maintenance responsibilities, or disagreements over levies. Conflict resolution is a crucial part of the trustee role, yet many struggle to handle disputes effectively.
Poor communication often lies at the heart of these disagreements. When trustees fail to keep owners informed about decisions or policies, misunderstandings arise, leading to frustration and tension. Without a clear process in place for resolving disputes, conflicts can escalate, sometimes even ending up at the Community Schemes Ombud Service (CSOS), which adds further complexity and costs to the situation.
In a Cape Town complex, a trustee had to mediate a dispute between two owners arguing over shared parking spaces. The rules weren’t clearly communicated, and neither owner wanted to back down. The situation quickly escalated, involving legal threats and creating a hostile environment within the scheme. If the trustee had been trained in effective communication and conflict resolution strategies, they could have addressed the issue before it became a major problem.
Legal Responsibilities and Personal Risks – understanding the fine print
Many trustees underestimate the legal responsibilities and personal risks that come with the role. They have fiduciary duties, which means they must always act in the best interest of the scheme. If they fail to do so, they could face serious consequences, including personal liability. Without a clear understanding of the laws governing sectional title schemes, trustees can unknowingly make decisions that violate regulations, putting themselves and the scheme at risk.
Legal challenges often arise when trustees sign off on contracts or enforce rules without fully understanding their obligations. In Pretoria, for example, a trustee approved a maintenance contract without following proper procurement procedures. When owners started questioning the legitimacy of the contract, the situation turned into a legal dispute. The trustee, unaware of the correct procedures, found themselves in a difficult position that could have been avoided with the right knowledge.
The Solution: Trustee training is essential
With so many responsibilities and potential risks, it’s clear that trustees need proper guidance and training to manage Sectional Title Schemes effectively. Without the right knowledge, trustees can find themselves overwhelmed, leading to financial mismanagement, unresolved disputes, and legal complications.
The good news is that these challenges are not insurmountable. With the right training, trustees can gain the confidence and expertise they need to handle their responsibilities effectively. Fitzanne Estates offers trustee training courses designed to equip scheme executives with the skills to manage finances, resolve conflicts, and navigate legal requirements. By investing in training, trustees can ensure that their schemes remain financially sound, well-managed, and legally compliant.
If you’re a trustee looking to take control of your Sectional Title Scheme, start by downloading our free Trustee Training eBook for essential insights.
To learn more about how our trustee training courses can help you, visit Fitzanne Estates Trustee Training. A well-managed community starts with well-trained trustees, and with the right knowledge, you can make a real difference.
