Trustees rendering services to the Body Corporate: governance considerations
16 February 2026 | Francoa Willemse
Introduction
Within Sectional Title Schemes it is not uncommon for Trustees to offer professional or practical services to the Body Corporate. Services may be offered by the Trustees as contractors, consultants or, in limited instances, as employees. While such arrangements with the Body Corporate may appear efficient or cost-effective, they raise important legal, ethical and governance considerations.
In this article, we discuss the risk of conflict of interest and the statutory obligations imposed on Trustees of Body Corporate by the Prescribed Management Rules (“PMR”) Annexure 1 of the Regulations to the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”).
What is the fiduciary position of Trustees?
It is of utmost importance to understand that the Trustees hold a fiduciary duty towards their Body Corporate the moment they are nominated to act in such capacity at an Annual General Meeting, or in certain circumstances, a Special General Meeting.
Section 8 of the STSMA expressly requires Trustees to act honestly, in good faith and to exercise the powers and functions of a Trustee in the best interests of the Body Corporate. One aspect that is often overlooked, is the failure to avoid any material conflict between the personal interests of the Trustee/s and those of the Body Corporate.
Conflict of interest: Trustees
Avoiding any conflict of interest is an essential Trustee principle and applies regardless of whether the Trustees serve on a voluntary or unpaid basis. When a Trustee offers their services to the Body Corporate for remuneration, it may practically imply that the Trustee’s personal financial interest may directly affect the decisions that the Trustees are required to take collectively at meetings.
When an important decision cannot be decided or voted on due to this conflict of interest, it creates a practical and uncomfortable challenge ultimately creating an inherent tension between remaining Trustees, the Body Corporate’s members and, more importantly, the Trustee’s duty to the Body Corporate when their private commercial interest is formed.
Conflict of interest: statutory disclosure
The STSMA and the PMRs recognise that a conflict of interest may arise and regulate how these challenges must be addressed. PMR 6(3) states that a Trustee must declare any direct or indirect personal interest that they may have in any matter to be considered by the Trustees, and further that Trustee must recuse themselves from both the discussion and the decision on that matter.
The disclosure must be full and transparent, and the Trustee concerned may not attempt to influence the outcome in any way. Failure to comply with these requirements may expose the Trustee to personal liability and may render the relevant decision susceptible to challenge by members of the Body Corporate.
Service contracts: Trustees and the Body Corporate
PMR 8 makes provision for additional safeguards where a Trustee wishes to contract with the Body Corporate. PMR 8(2) provides that Trustees who are members of the Body Corporate are not entitled to any reward, whether monetary or otherwise, for any services rendered unless it has been determined and confirmed by special resolution taken at a meeting with its members.
Further provision is made that the Body Corporate may not enter into any contract with a Trustee, or a person related to the Trustee, unless the contract is first approved by an ordinary resolution of the members of the Body Corporate. The Trustee concerned may also not vote on the resolution approving such service contract.
This rule reflects the principle that decisions involving a Trustee’s self-interest should not be left solely to the Trustees but instead be subject to scrutiny and approval by the members of the Body Corporate. It is also worth noting that the disclosure of a financial interest alone is insufficient, and that member approval is a mandatory prerequisite before contracting with the Body Corporate.
Practical and governance challenges
As highlighted above, it is common cause that even where statutory requirements are met, and due processes are followed, practical challenges often arise when Trustees provide services to their Body Corporate.
A challenge that arises in practice is that other members within the scheme may perceive the arrangement as preferential treatment, particularly where alternative service providers were not invited to tender or where pricing and performance are disputed. What impact does this have? It impairs the members trust in the Trustees and may lead to increased disputes, complaints to the Community Schemes Ombud Service, or even worse, litigation.
Additionally, a Trustee who performs services to the Body Corporate may find it difficult to objectively assess their personal performance and costs when acting in their governance role. This can complicate oversight, accountability and the enforcement of contractual standards, all of which are essential to sound scheme management.
Risk management and best practice
From a governance perspective, Bodies Corporate should approach service agreements with Trustees with extreme caution. Transparency from the Trustees, total disclosure, and recusal from decision-making are not merely formalities, but essential risk-management tools that will assist with the functioning of the scheme. In most cases, the use of independent contractors who have no governance role within the scheme may better serve the interests of the Body Corporate and preserve confidence in the Trustee decision making process.
Conclusion | Trustees’ primary responsibilities: fiduciary duties and compliance
While the STSMA does not impose an absolute prohibition on Trustees providing services to the Body Corporate, it places clear and firm conditions on such contracts. Trustees should remain mindful that their primary role is their fiduciary relationship toward the Body Corporate and its members, and not personal commercial engagement with the Body Corporate.
As Trustees who act in breach of their fiduciary relationship will be held liable to the Body Corporate for any loss suffered and/or any economic benefit received by the Trustee by reason thereof a Trustee’s potential conflict of interest must:
be properly disclosed;
result in the affected Trustee/s recusing themselves from portion of the meeting and/or the decision-making process where the conflict is concerned, and;
member approval must be obtained where service agreements are involved.
Where Trustees do render services, strict adherence to the statutory framework is essential to ensure legality, fairness and the continued integrity of the governance structure as ultimately, Trustees must ensure that their conduct always reflects the best interests of the Body Corporate and its members.
Should you require any more information regarding this topic, don’t hesitate to contact us today on 061 536 3138 or at info@tvdmconsultants.com.
About the author
Franoca Willesme is a Community Schemes Legal Consultant at TVDM Consultants.
Francoa, an admitted and practicing attorney, grew up in Klerksdorp, North-West Province and attended the North-West University where he obtained his LLB and LLM qualifications, with distinctions. During his studies, Francoa assisted the Faculty of Law as a supplementary instructor and examiner for the Law of Evidence for third year law students.
Learn more about Francoa Willemse.
