
Prescribed management rule (PMR) 10 deals with this issue. It divides trustees into two categories, being owner trustees and non-owner trustees, and treats remuneration for each category differently.
Owner trustees: may not be remunerated unless the body corporate decides to do so by special resolution.
Non-owner trustees: may be remunerated at such rate as may be agreed upon between the body corporate and the trustees.
Reimbursement
Remuneration as envisaged in PMR 10 may be given to trustees in addition to reimbursement for all disbursements and expenses actually and reasonably incurred by them in carrying out their duties and exercising their powers. PMR 10 provides that both categories of trustees must be reimbursed for these expenses; so remuneration is compensation over and above reimbursement.
Remuneration as an incentive
In most schemes, owner trustees are not remunerated. Presumably the reason for this is that these people are willing to invest their free time in playing a role in ensuring that their properties are being well cared for and that they have more of a say in the scheme’s management than the average owner. But in a scheme where owner apathy is a problem and owners do not want to stand as trustees, remuneration could be used as an incentive. There are people who are not interested in giving up their free time ‘for nothing’, but if they were offered payment for their time they may well be interested in standing for election as trustees.
Terms of remuneration agreement
The question of how much a trustee should be paid is one that no one can answer except the members of the body corporate. In the case of owner trustees, their remuneration could potentially be different in each case as this would be an expense that forms part of the body corporate’s budget and would have to be agreed to by owners at an annual general meeting. In the case of non-owner trustees, their remuneration will be at such rate as they have agreed upon with the body corporate. How the trustees are paid (ie. hourly, weekly, monthly etc) will also be something that is agreed upon between the trustees concerned and the body corporate.
Remuneration of an alternate trustee
Paying a trustee for “part-time” work
Some schemes have retired persons with administrative skills who are not prepared to work for nothing, but who are prepared to work for very much less than the cost of their skills on the open market. The nature of the work will often allow them to continue to enjoy their retirement, but spend a few hours a day or a few days a week giving the body corporate’s administration their full attention. Particularly when a scheme is going through a particularly busy period, for example when major repairs are being undertaken, this can be a very wise investment. And for schemes that do not employ managing agents at all, it can be the only way to ensure that at least one of the trustees can be held to account!
The Sectional Title Survival Manual by Graham Paddock is ideal for Trustees. This manual comprises 13 chapters as well as extracts from the Sectional Titles Act No. 95 of 1986 and the prescribed management and conduct rules (PMR). For more information, including comments from the sectional title community regarding the Survival Manual click here.
Article reference: Volume 5, Issue 3, Page 3
Recent Posts
Recent Comments
- Graham Paddock on Body Corporate Functions: Insurance
- Graham Paddock on Spending body corporate funds
- Graham Paddock on The Levy Clearance Certificate: The Body Corporate’s Cheap & Effective Weapon
- Graham Paddock on The benefits of online sectional title meetings
- Heinz Wiesner on The benefits of online sectional title meetings
Archives
- January 2025
- December 2024
- November 2024
- October 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- March 2009
- February 2009
- February 2008
- February 2007
8 Comments.
Hi,
please could yo let me know if a Trustee is allowed to be the Estate Manager (of which he receives a salary) plus as a trustee his portfolio is Security and his company has been given the contract for the Estate ( of which he gets paid for). Surely this is no in the Act? Your help is greatly appreciated
Dear Rowan,
Thank you for your comment. 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
Good morning
Our Chairperson is a non-owner and really does an excellent job. I would like to recommend an incentive to her on a monthly basis on our AGM but have no idea how much to recommend. We have 58 units and our levies are roughly R1500,00 per month. We have built up an awesome amount of reserve and the complex is in an outstanding shape because of her and the factotum. I hope you can send me feedback in time.
Regards
Dear Elsabe,
Thank you for your comment. We are more than happy to help, however we do not give free opinions / 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. Alternatively, join us on http://www.paddocks-club.co.za.
Kind regards,
Paddocks
Hi
This article is about remunerating Trustees for doing the duties of being a Trustee.
Should a Trustee want to quote on a work then they can but they are not being paid to be a Trustee. eg. Being a Caretaker is NOT part of the duties of being a Trustee.
They must not be involved in the meeting where it is decided which contractor will be awarded the work.
Dear Butch,
Thank you for your comment. We are more than happy to help, however we do not give free opinions / 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. Alternatively, join us on http://www.paddocks-club.co.za.
Kind regards,
Paddocks
I would suggest about R2000 per month. It can be inflation linked, going up by 8% per year. I know that trustees can be paid for their efforts (after approval at a general meeting) and that a non-owner can be trustee. I’m not sure if a non-owner who is paid for her work, can still be a trustee. Check the new ACT (Com Schemes).
Good Day
Can a Chairman of a Sectional Title complex, sub-contract work in the complex under his company.