- Trustees may not participate in decisions where they have a direct or indirect personal interest.
- Owners who continue breaching a court or adjudication order lose the right to vote by ordinary resolution.
- Allowing a disqualified person to vote can render the resolution void and expose the body corporate to CSOS or High Court proceedings.
Resolutions are the core of any sectional title scheme’s body corporate. As outlined in the current Sectional Titles Schemes Management Act 2011, which governs complexes throughout South Africa, voting is an integral aspect of a body corporate’s decision-making process.
Therefore, the actions of body corporate members during the voting process must be fair, reasonable and in accordance with statutory and common-law procedures. Nevertheless, there exists a critical caveat that can void a body corporate’s resolution in its entirety if ignored: voting disqualification as detailed in the Sectional Titles Schemes Management Regulations 2016.
A trustee’s disqualification from voting
Under Section 8 of the Sectional Titles Schemes Management Act 2011, trustees are bound by their fiduciary duty to the body corporate they serve. Accordingly, a trustee can be disqualified from voting at a trustees’ meeting on any matter in which the trustee has a conflict of interest.
When it comes to trustees’ resolutions, Prescribed Management Rule 6(3) of the Sectional Titles Schemes Management Regulations 2016 states that a trustee who has any direct or indirect personal interest in any matter to be considered by the trustees must not be present at or play any part in the consideration or decision of the matter concerned.
Likewise, Prescribed Management Rule 14(3)(b) of the Sectional Titles Schemes Management Regulations 2016 reinforces this disqualification of a trustee from voting in respect of any matter in which the trustee has an interest.
Common examples of a trustee’s conflict of personal, direct or indirect interest generally include a trustee voting on a matter involving their unit in a scheme or a trustee voting on a body corporate dispute to which the trustee is a party.
A body corporate member’s disqualification from voting
By the same token, a body corporate member can be disqualified from voting at a meeting. Notwithstanding that every section owner in a sectional title scheme is a body corporate member, if that owner has an adjudication order or court order against them and they persist in breaching such order, they are disqualified from voting by ordinary resolution at any special or annual general meeting.
As stipulated in Prescribed Management Rule 20(2) of the Sectional Titles Schemes Management Regulations 2016, breaches of court or adjudication orders regarding payment or conduct are the grounds for an owner not being entitled to vote by ordinary resolution at a general meeting of the body corporate.
Typical breaches of such orders include a body corporate member refusing to pay their levy despite being ordered to do so; a body corporate member failing to comply with a mandatory order (that is, an order to do something, such as remove a pet from the scheme); or a body corporate member failing to comply with an order to refrain from certain conduct (such as trespassing in another owner’s Exclusive Use Area, obstructing the scheme’s common property, and similar conduct).
The consequences of allowing a disqualified trustee or body corporate member to vote
Enabling a disqualified person to vote is not only a contravention of the Sectional Titles Schemes Management Regulations 2016; it can also amount to the relevant resolution being declared void because of a disregard for the statutory procedure.
In particular, Section 39(4) of the Community Schemes Ombud Service Act 2011 empowers an affected party to approach the Ombud for an order declaring a resolution void or invalid. An adjudication order of this nature is enforceable in the High Court, as noted in Section 56 of the Community Schemes Ombud Service Act 2011, thereby making any attempt to abide by a void resolution an offence punishable by contempt.
For more complex matters, an aggrieved party can alternatively approach the High Court for an order setting aside a non-compliant resolution, which will undoubtedly attract additional costs for all parties concerned.
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