Carryn Melissa Durham

In this article I will address a topic that, on various occasions, I have dealt with in the Paddocks Club discussion forum and on Facebook as question of the day namely, whether a trustee can also be appointed as a caretaker?

It is important to note that only trustees who are owners can be appointed as caretakers due to the disqualification contained in Prescribed Management Rule (“PMR”) 5(b).

Trustees are empowered to employ a caretaker. In terms of section 38(a) of the Sectional Titles Act 95 of 1986 (“the Act”), the body corporate has the power to appoint such agents and employees as it may deem fit. In terms of PMR 26(1)(a), the trustees have the power to appoint for, and on behalf of the body corporate, such agents and employees as they deem fit in connection with the control, management and administration of the common property; and the exercise and performance of any or all of the powers and duties of the body corporate. This power is subject to any restriction imposed or direction given at a general meeting of the body corporate. Therefore, the body corporate can place a restriction on the trustees that the caretaker employed may not be a trustees. Another consideration is whether the approved budget makes provision for the appointment of a caretaker.

The trustees must take a resolution by majority vote to appoint the caretaker. I must emphasise that the trustee will be disqualified from voting on his own appointment as caretaker by virtue of his interest in the contract in terms of PMR 23. Furthermore, two trustees must sign the contract of appointment in terms of PMR 27.

Difficulties can arise when a trustee is appointed as a caretaker. In terms of PMR 26(1)(b) the trustees have the power to delegate to one or more of the trustees such of their powers and duties as they deem fit, and to revoke the delegation at any time. When a trustee is delegated the maintenance portfolio, the lines between what he is doing as a trustee and what he is doing as an employee become blurred. The duties that the trustee executes as a caretaker should therefore be set out in detail in the contract.

Furthermore the basis for liability that he may incur differs in each role. As a trustee he has a fiduciary duty toward the body corporate. As a caretaker he has contractual duties toward the body corporate.

Another problematic issue that could arise is that of remuneration. Trustees are not usually paid. PMR 10(1) states that owner trustees are not entitled to any remuneration in respect of their services as such. A caretaker would expect remuneration in terms of his employment contract. Where a trustee/caretaker is remunerated, it must be clear that the trustee is not being compensated for trustee duties. If the trustee/caretaker is being paid as such in terms of a special resolution taken by the body corporate in terms of PMR 10(1) then the trustee is not an employee, but is being paid for his services as a trustee. If the trustee/caretaker is being paid as a caretaker (the trustees would have authorised his remuneration) then the trustee/caretaker is an employee of the body corporate, regardless of the fact that he is only a part-time caretaker/employee.

Trustees retain a supervisory role over body corporate employees. One of my my main concerns is that a trustee who is also a caretaker is then placed in an untenable position where he has to supervise his own work. This creates a conflict of interest. A well-drafted employment contract would specify who the caretaker must report to and from whom he must (and must not) take instructions.

The last consideration is that PMR 67(3) states that a proxy need not be an owner, but cannot be an employee of the body corporate. Therefore a trustee who is also a caretaker would not be able to hold any proxies.

In conclusion, there is no legal restriction on a trustee who is an owner from being appointed as a caretaker. However, as I have mentioned there are various reasons why it is unwise to do so. In my view the trustees must manage the scheme for the benefit of, and in the interest of the body corporate. Good governance might be sacrificed in situations where the employment contract does not clearly set out the separation of duties of the trustee/caretaker, and where the caretaker is not supervised adequately.


Article reference: Paddocks Press: Volume 11, Issue 02, Page 2.

Carryn Melissa Durham is one of the most highly qualified Sectional Title lawyers in the country (BA. LLB, LLM and currently completing her Doctorate in the subject), Carryn forms part of the Paddocks Private Consulting Division.

This article is published under the Creative Commons Attribution license.

Back to Paddocks Press – February 2016 Edition.

7 Comments.

  • Can the Body Corporate Chair person appoint themselves as the Caretaker?

    • Paddocks
      04/11/2016 09:40

      Dear Dunbar,

      Thank you for your comment. However, we do not provide free advice. Please email us on consulting@paddocks.co.za with regards to your matter, and we can provide you with a no-obligation quote, so that we can assist you.

      Kind regards,
      Paddocks

  • M S Scheepers
    28/02/2018 17:50

    We are a Share Block with 81 Shareholders in South Africa.
    About 2 yrs ago, The Chairman appointed a Tenant without any knowledge of the Shareholders a lady to help in the office.
    The so called lady is still in office and now also appointed as a Trustee in Body Corporate.
    All of this happened without consent of the Shareholders.
    The Chairman got rid of the Caretaker by Bullying, Victimisation and Intimidation in the Worst Ever way.
    A long Story short, since February 2016, not one AGM was held and also none Financial Stats can be shown.
    Can u send me some Information regarding this matter please?

    Regards
    Worried Shareholder.

    • Paddocks
      09/03/2018 16:01

      Hi there,
      Thank you for your comment. We would love to help but unfortunately do not give free advice. Here’s how we can help:
      – We offer a Free Basics of Sectional Title 1-week short course. You’ll be able to ask your course instructor any related questions. Find out more here.
      – We offer consulting via telephone for R390 for 10 minutes. Please call us on +27 21 686 3950.
      – We have Paddocks Club, an exclusive online club, to help you get answers to your questions about community schemes. Find out more here.

      Kind regards
      Paddocks

  • Hi,
    As a fully paid up owner every month (levies) etc, and a member of the Body Corporate, in a Sectional Titles Act complex, do I have the right to request a weekly report of what work the caretaker has done?
    Our caretaker ignores all mails sent to him requesting the above.

    • Paddocks
      19/10/2018 10:19

      Hi Tess,

      Thank you for your comment. We would love to help, however we do not give free advice. Here’s how we can help:

      – We offer a 1-week Free Basics of Sectional Title short course.
      – We offer consulting via telephone for R490 for 10 minutes. Please call us on 021 686 3950.
      – We have Paddocks Club, an exclusive online club, to help you get answers to your questions about community schemes.

      Kind regards,
      Paddocks

  • Musoke Deo
    18/03/2019 08:51

    Thanks for the insight