Property: Body corporate being mismanaged? Expert weighs in

There's a reported rise in trustees mismanaging body corporates.

CapeTalk and 702's Africa Melane spoke to the CEO of Propertyzz.com, Ebo Quagraine, in part 1 of a conversation that deals with the topic.

Why is this happening?

"It's very weird because the Sectional Title Schemes (Management Act) is absolutely clear about issues on governance. However, often you find trustees who are meant to be custodians of these body corporates barely read these acts themselves. And because they barely read these acts you find that they're working on a whim basis. Like what we think we know or what our managing agent tells us is best.

"However, you also have a group of - for lack of a better word - boy scout managing agents. These ones who have been there for a very, very long time and operate on very old rules and they continuously say this is how we used to do things... And therefore they lead these trustees who are meant to know better - astray.

And it perpetuates this cycle of people doing what they think they should be doing but is not really what they should do."

What are some of the most common governance failures that happen in body corporates, either knowingly or unknowingly?

"Often people will think that the cardinal sin in body corporates is theft of money but actually it's the ignorance of the custodians of the body corporate i.e. trustees which actually affects the body corporate the most. What do I mean by this? When they who are meant to know better do not do what they're supposed to do, they end up having issues like financial impropriety.

Quagraine adds that trustees also overreach sometimes, going against the AGM rules.

"Lastly let's say levies are discussed at AGMs. However trustees do then not declare the levies properly which by the act they're supposed to do. So that people actually know what they're supposed to pay and how to pay it. And also that they do not have the right collections systems put in place.

"So it's all these little things which often lead them into misgovernance and missteps."

Part 2 of this conversation will be about ways trustees can function better.

To listen to Quagraine's full discussion with Africa Melane, click the link below: