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Signing of documents
If the body corporate has entered into an agreement with a levy collection agency and a non trustee has signed the agreement is this agreement biding. Looking at the ACT clause 27 it says the agreement is nul and void as only trustees may sign - however it has this clause at the end "[Rule 27 substituted by GN R1422 of 31 October 1997)" which has me confused.
Thanks
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RE: Signing of documents
For any document to be valid and binding in respect of the Body Corporate it must be signed by two trustees or one trustee and the managing agent if applicable. See PMR 27 in the Library Section of STO.
RE: RE: Signing of documents
John,
My feelings are the same however when I read the ACT (quoted below) it says it is substitued and I cannot find GN 1422 - please...Show More
IN TERMS OF THE SECTIONAL TITLES ACT NO_ 95 OF 1986 (not Property Management Rules)
Signing of Instruments
27. No instrument signed on behalf of this body corporate, shall be valid and binding unless it is signed by a trustee and the managing agent referred to in rule 46 or by two trustees or, in the case of a certificate issued in terms of section 15B (3) (i) (aa) of the Act, by two trustees or the managing agent.
[Rule 27 substituted by GN R1422 of 31 October 1997.]
RE: RE: RE: Signing of documents
If you look in the Library Section of STO you will see slightly different wording that replaces the word Instrument with the word Document. I believe that this is the latest version.
RE: Signing of documents
follow
RE: Signing of documents
Hi
Unfortunately the heading is confusing as it mentions "Instruments" but in the body of PMR 27 the word "document" is used, which I would say is more appropriate.
RE: RE: Signing of documents
Hi
Thanks for the advice.
My concerns are more with the clause at the bottom of this law which states it is REPLACED and I cannot find the "new" law QUOTE Rule 27 substituted by GN R1422 of 31 October 1997 UNQUOTE.
In a court of law can we have a contract cancelled if a non trustee signed the contract - I would like to say yes but GN 1422 ?? has me confused.
RE: Signing of documents
Hi
What you are referring to is the indication when the Rule was amended to its current form and wording. The wording as it is in the library section is the correct wording.
There is a business principle (not sure what the correct terminology is) that it is not expected of an outsider/third party to be conversant with the internal controls/procedures of the party they enter into a contact with. So if the collecting agency signed the contract in good faith, assuming the person signing the document had the authority to do so, it could get tricky (but not impossible) to get the contract set aside. The owner should be made aware of the face that should there be legal costs involved setting the contract aside costs could be claimed from him on behalf of the BC....Show More
RE: RE: Signing of documents
If I understand your drift correctly you might be referring to "Ultra vires"
A Latin term meaning "beyond powers". The term is usually used to refer to acts taken by a corporation (read Body Corporate) or officers of a corporation that are taken outside of the powers or authority granted to them by law or under the corporate charter.
RE: RE: RE: Signing of documents
In the case of BC, the act of an non trustee who is not authorized to act on the entity's behalf may, nevertheless, bind the entity contractually if such an employee would normally be expected to have that authority.
The levy collection agency is deemded to know that two trustees of a BC in terms of the S T Act is required to sign an agreement. The agency should be prohibited from raising the defence of "estoppel" in this instance. The agency also will not be in a position to claim that the non trustees normally fulfills the role of signatory on behalf of the BC.
Would be interesting to know how a non trustee could become involved in signing a contract on behalf of the BC - where were the trustees?
RE: RE: RE: RE: Signing of documents
Thanks. The sheriff (chairman/treasurer) decided to have his mate sign instead of a trustee. What gives us more ammo is that the first page of the agreement has a list of names of all the trustees yet the agency elected to ignore this and allow the friend (albiet an owner) to sign. The "sheriff" even has this same mate sign cheques - he spends annually about 70% of the levies collected on who knows what, even giving himself a salary called honarium on the financials and petty cash at the agm - the stories we are uncovering is amazing (he even conveniently had all the documents burnt whilst bringing it home from work where he does the actual BC work) but to get the mess fixed against the resistance the "sheriff" and agency and auditor is amazing - whilst the bank have stopped giving loans as the BC is in fact bankrupt
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