Good governance in sectional title schemes: What the STSMA really demands
09 April 2026 | Zerlinda van der Merwe
If you've ever lived in a sectional title scheme, chances are you've encountered at least one governance horror story. The trustee who awarded the painting contract to his brother-in-law, the scheme that hadn't updated its insurance in three years, or the body corporate account that mysteriously dipped every time a certain owner needed a favour. These stories aren't rare. They happen across South Africa every day, in small complexes and large developments alike, and they cause real harm to people's homes and investments.
In sectional title good governance isn't a nice-to-have. It's the legal and ethical foundation on which every scheme stands. The Sectional Titles Schemes Management Act 8 of 2011 (the STSMA) and its Prescribed Management Rules (PMRs), in terms of Annexure A to the STSMA's Regulation, place real power in the hands of trustees, “but with great power comes great responsibility”. Understanding where the lines are drawn is essential for trustees, owners, and managing agents alike.
So what constitutes good governance in sectional title schemes?
At its simplest form, good governance means making decisions that serve the scheme and its members, not the people making the decisions. It means:
being transparent, being accountable, and acting with integrity even when no one is watching, and
recognising that being a trustee isn't ownership of the scheme - it's stewardship of it.
Section 8 of the STSMA is where the legal framework for trustee conduct can be found, and it's worth spending some time here because it's more demanding than many trustees realise. Section 8 establishes what's known as a fiduciary duty. The word "fiduciary" comes from the Latin for trust, and that's exactly what it means. Trustees are trusted persons. They hold a position of power over a shared asset, the common property and the body corporate's finances, and the law demands that they exercise that power for the benefit of the body corporate, not themselves.
In practical terms, this means:
Trustees must act honestly and in good faith;
They must avoid conflicts of interest;
They must not use their position to gain personal advantage, and
they must apply the same standard of care that a reasonable person would apply to their own affairs.
These aren't just ethical guidelines, they are legal obligations. A trustee who breaches their fiduciary duty can be held personally liable for any loss suffered by the body corporate as a result. That's not a theoretical risk. It happens.
What does this mean day-to-day?
Trustees are collectively responsible for a range of functions that touch every aspect of scheme life. They are responsible for setting contribution amounts and ensuring they are sufficient to meet the scheme's operational needs and fund the reserve fund, for maintaining the common property in a good state of repair, and for ensuring the scheme is adequately insured.
They must enforce the conduct rules fairly and consistently, keep proper financial records and present them to owners at the annual general meeting, and appoint and oversee the managing agent, if one is used. None of these tasks can be delegated entirely. Even when a managing agent handles the day-to-day administration, trustees remain responsible for oversight and cannot simply rubber-stamp whatever the agent recommends.
What about conflicts of interest? because this is where things most often go wrong
A conflict of interest arises when a trustee has a personal interest, direct or indirect, in a decision the body corporate is making. This is often where things go wrong, as it doesn't have to be something obviously corrupt. For example, maybe a:
trustee's spouse runs a garden service, and the scheme needs a landscaping contractor.
trustee owns a unit directly adjacent to a proposed common property development.
trustee is a property developer, with an eye on a portion of the common property.
The above potential conflicts need to be handled properly. PMR 6(3) is very clear on this. A trustee who has a direct or indirect interest in any contract or proposed contract, or any matter under discussion at a meeting, must disclose that interest as soon as they become aware of it. They must not vote on the matter. And if the meeting decides it's appropriate, the trustee must leave the room entirely while the matter is discussed.
Disclosure isn't just a formality. It's the mechanism that protects the scheme from decisions being made for the wrong reasons, and it protects the trustee too.
A trustee who discloses properly and recuses themselves from the vote has done what the law requires.
A trustee who stays silent and votes in their own interest has not.
The minutes of trustee meetings should always reflect any disclosures made and the recusal of the affected trustee. This creates a paper trail that protects everyone.
What about the standard of care?
The STSMA requires trustees to apply the same care and diligence that a reasonable person would apply to their own affairs. This is a deliberately broad standard. It doesn't require trustees to be legal or financial experts. But it does require them to take their responsibilities seriously, seek advice when they're out of their depth, and not ignore obvious problems in the hope they'll resolve themselves.
A trustee who receives a report from a managing agent saying the building's fire suppression system hasn't been serviced in four years and does nothing about it isn't meeting that standard.
A trustee who signs off on financial statements without reading them isn't meeting that standard either.
A trustee who attends meetings but never engages isn't fulfilling their role.
Taking the role seriously means actually engaging with the information in front of you. Being a trustee requires active participation, not passive attendance.
Where do schemes most commonly fail?
Experience in the industry points to a consistent set of problem areas:
Funds used for purposes that weren't approved.
Common property that deteriorates because maintenance was deferred indefinitely.
Conflicts of interest that were never disclosed because the trustee didn't think it was a big deal, or hoped no one would notice.
Decisions made at informal gatherings rather than properly constituted trustee meetings, meaning there's no paper trail and no accountability.
Managing agents are left entirely unsupervised while the trustees assume everything is running smoothly.
None of these failures require bad intentions. Most of them happen because trustees genuinely didn't understand what was required of them. That's not an excuse, it's a reason to take proper guidance seriously before stepping into the role.
That said, it's worth remembering that most trustees are volunteers doing a difficult, time-consuming, and often thankless job. They deserve support and constructive engagement, not just criticism. The relationship between trustees and owners works best when there's mutual respect and open communication.
Good governance involves trust
At the end of the day, good governance in a sectional title scheme isn't just about ticking legal boxes. It's about something more fundamental than compliance - it's about trust. Owners trust trustees to make decisions honestly and carefully. The scheme trusts its trustees to protect the common property and the collective financial health of all members. When trustees honour that trust, schemes run well, disputes are minimised, and property values are protected. When that trust breaks down, the consequences can be serious, financially, legally, and for the community that calls the scheme home.
If you're a trustee wondering whether your scheme is on the right track, or an owner concerned about how your body corporate is being run, TVDM Consultants is here to help. We work with community schemes across South Africa to improve governance, resolve disputes, and ensure that the law is being applied correctly. Good governance isn't complicated. But it does require commitment.This article is intended for general information purposes only and does not constitute legal advice. If you are considering extending your section, email info@tvdmconsultants.com to find out how we can assist.
About the Author:
Zerlinda van der Merwe is a Co-Founder | Director at TVDM Consultants.