The trustee duty checklist: fiduciary conduct, meetings, budgets and arrears

Every trustee stands in a fiduciary relationship to the body corporate, not to individual owners. That duty translates into concrete, checkable actions: acting honestly, disclosing conflicts, keeping the reserve fund and maintenance plan current, running meetings on proper notice, and following a documented process before handing a unit's arrears to a debt collector or legal practitioner.

Reviewed by TefCo Compliance Research — last verified 15 September 2026.

In short

The fiduciary duty is owed to the body corporate as a whole, not to any individual owner, under section 8 of the Sectional Titles Schemes Management Act 8 of 2011.
A trustee with a personal interest in a contract must disclose it to the other trustees before any vote.
Failing to budget for or maintain a reserve fund and 10-year maintenance plan can itself amount to a breach of fiduciary duty if it causes loss.
A documented, consistent arrears process protects trustees personally as much as it protects the scheme's cash flow.

The core fiduciary obligations

Act honestly and in good faith in all scheme business (STSMA section 8).
Exercise trustee powers only in the interest of the body corporate, never a personal or third-party interest.
Avoid any material conflict of interest between the trustee's own affairs and the body corporate's affairs.
Never benefit personally, financially or otherwise, from the trustee position.
Disclose any personal interest in a proposed contract to the other trustees before it is decided.

A trustee's primary legal duty runs to the body corporate as a collective entity. An individual owner generally cannot sue a trustee directly for breach of this duty — the claim belongs to the body corporate, though an owner can push for action through CSOS or the courts.

Meeting and governance discipline

Call trustee meetings on a minimum of 7 days' written notice with the agenda attached, or agree a standing schedule in advance.
Keep minutes of every trustee meeting and every general meeting, including the AGM.
Record and check quorum before any resolution is taken.
Disclose conflicts of interest in the minutes, not just verbally in the room.
Keep the scheme's registered rules, and any CSOS-approved amendments, on file and available to owners.

Financial stewardship: budgets, reserve fund and the maintenance plan

Trustees who fail to establish a reserve fund, fail to implement a maintenance plan, or fail to carry out essential repairs can be found in breach of fiduciary duty where that inaction causes financial loss, regulatory non-compliance, or a fall in the value of the common property.

Table an administrative fund budget and a reserve fund budget at the AGM every year.
Maintain a written maintenance, repair and replacement plan and keep the reserve fund contribution aligned with it.
Pay the CSOS levy over on the quarterly schedule, not just once a year.
File the CSOS annual return within four months of financial year end, with signed financial statements and AGM minutes attached.

Handling levy arrears without exposing the scheme or the trustees

Follow the scheme's own rules on when a unit is formally in arrears before escalating.
Send a written notice of arrears to the owner before instructing external collection.
Only instruct a registered debt collector or an legal practitioner — using an unregistered debt collector is a criminal offence under the Debt Collectors Act 114 of 1998.
Keep a consistent, documented arrears process applied the same way to every owner — inconsistent enforcement is itself a governance risk.
Where an owner disputes the arrears, remember CSOS can only be approached once the scheme's own internal dispute process has been exhausted.

Frequently asked

Can an owner sue a trustee personally for a bad decision?

Generally no — the fiduciary duty runs to the body corporate as a whole, so the body corporate holds the claim. An owner affected by a trustee's conduct usually has to act through CSOS or persuade the body corporate to act, rather than suing the trustee directly. This is general information, not legal advice — get advice on your scheme's specific facts.

Does a paid managing agent replace the trustees' fiduciary duty?

No. Appointing a managing agent under Prescribed Management Rule 28 delegates functions and powers, but trustees remain accountable for oversight of the agent and cannot simply hand over their fiduciary obligations.

What is the first thing CSOS or an owner will check if trustees are accused of mismanagement?

In practice it is usually meeting minutes and disclosure records — whether meetings were properly called, quorate, and whether any conflicted trustee disclosed their interest before a vote.

Sources

TefCo Corporate Compliance (Pty) Ltd is a compliance management platform, not a legal, tax or advisory firm. This guide is general information, not advice. Fees, dates and thresholds change — confirm current figures with the regulator before you rely on them.