Trustee RiskStart Assessment

Trustee Personal Liability in South Africa

As a trustee of a sectional title scheme, you carry personal liability for governance failures. Understand your legal exposure and how to protect yourself.

Assess Your Liability Exposure

What is Trustee Personal Liability?

Trustee personal liability refers to the legal responsibility trustees carry for their actions (and inactions) in managing a sectional title scheme. Under the Sectional Titles Schemes Management Act (STSA), trustees are personally liable for governance failures, financial mismanagement, and compliance breaches.

This means that if a governance failure occurs, creditors, residents, or regulatory bodies can pursue legal action directly against individual trustees — not just the scheme.

Common Sources of Trustee Liability

Financial Mismanagement

Improper handling of scheme funds, unauthorized spending, or failure to maintain proper financial controls.

Governance Failures

Lack of proper documentation, inconsistent board resolutions, or failure to follow scheme rules.

Compliance Breaches

Failure to comply with STSA, CSOS regulations, or other statutory requirements.

Conflict of Interest Violations

Undisclosed conflicts or self-dealing that prejudices the scheme.

How to Protect Yourself

  1. Maintain Proper Documentation — Keep detailed records of all board decisions, financial transactions, and governance activities.
  2. Follow Governance Best Practices — Implement formal procedures for decision-making, conflict management, and financial controls.
  3. Get Professional Advice — Consult with legal and financial advisors on governance and compliance matters.
  4. Obtain Directors & Officers Insurance — Protect yourself with appropriate liability insurance coverage.
  5. Conduct Regular Risk Assessments — Identify governance gaps before they become liability exposure.

Understand Your Liability Exposure

Take the free 5-minute assessment to identify where your board is most vulnerable.

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