While the majority of bodies corporate around South Africa are managed by well meaning, hardworking trustees, there are select schemes that are being unscrupulously run to the detriment of the owners involved.
Because the Sectional Titles Act is not defining and clear enough with regards to the appointment of administrators, each case needs to be assessed individually before a court of law in making a decision about whether there is a need for an administrator.
In situations like this members of the body corporate or creditors are entitled to apply legally to have an administrator appointed to run the scheme on their behalf.
To apply for an administration order and have an administrator take over the decision making at the scheme, sufficient evidence needs to be presented and proven before this can happen. Evidence of maladministration, neglect, wilfulness or dishonesty of the trustees or a risk for owners of units who may suffer substantial prejudice, etc. - are just a few of the points that need to be proven.
Because the Sectional Titles Act is not defining and clear enough with regards to the appointment of administrators, each case needs to be assessed individually before a court of law in making a decision about whether there is a need for an administrator.
For the court to appoint an administrator to a scheme, the applicants need to prove that the problems they are experiencing with their current trustees are such that only an administrator could add value and possibly rehabilitate the scheme. Inexperience on the part of the trustees or financial problems that a scheme may be experiencing will not be enough reason for a court to appoint an administrator.
The applicants will need to prove that the inexperience or financial problems are coupled with maladministration, neglect or dishonesty on the part of the trustees. Therefore the appointment of the administrator would be able to add value to this scheme.
Administrators can be appointed for fixed or indefinite periods of time dependent upon the circumstances for each individual case. All remuneration and expenses of the administrators are regarded as administrative expenses to be covered by the body corporate.
The onus is always on the applicant to offer valid proof of the maladministration of his/her scheme upon which the court will then decide whether or not to appoint an administrator to the body corporate.
While the option of appointing an administrator may seem daunting, it is often the better decision a scheme can take in order to restore it back to a healthy status. The removal of individual trustees’ decisions and the appointment of one experienced administrator is usually the exact change an unhealthy scheme needs. - Johann le Roux
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