Conditions set on who can be a Trustee

I believe it would be beneficial to establish a resolution or policy regarding trustee eligibility. My suggestion is that individuals interested in becoming a trustee should meet certain criteria, such as being a homeowner for at least two years and having no conflicts of interest with the scheme, among other considerations.

I believe it would be beneficial to establish a resolution or policy regarding trustee eligibility. My suggestion is that individuals interested in becoming a trustee should meet certain criteria, such as being a homeowner for at least two years and having no conflicts of interest with the scheme, among other considerations.

  1. Put it under Directions and Restrictions at the AGM

    The STSM Act makes provision for the owners to place restrictions on the Trustees and to give them directions:

    Section 7. (1) The functions and powers of the body corporate must, subject to the provisions of this Act, the rules and any restriction imposed or direction given at a general meeting of the owners of sections, be performed and exercised by the trustees of the body corporate holding office in terms of the rules.

    The downside of this option is that they will have to repeat the directions and restrictions at each AGM as it only runs from AGM to AGM.

    Another downside is that only one person can suggest a direction or restriction it does not have to be voted on.  If the owners insist on voting on it, it will be an ordinary resolution to be passed at the meeting.

  2. Add it to the Rules

    This is the better option – in this, there is a special resolution if in the Conduct rules and a unanimous resolution if in the Management rules – so more people get to approve the conditions set on Trustees.

    The best practice would be to do it in the Management Rules and specifically to amend Prescribed Management Rule 6.

In both options, it must just be taken into consideration that the conditions may not be contrary to the Act and prescribed rules.  For instance, the condition may say that only owners can be Trustees; but it cannot say that the Managing Agent can be a Trustee.