Sectional Title - Can Trustees take resolution via WhatsApp

By Jennifer Paddock

Jennifer Paddock

In the digital age, the use of electronic communication tools like WhatsApp has become the norm, even in formal settings. For trustees of sectional title schemes, this raises the question: Can trustee resolutions be validly taken via WhatsApp? The answer lies in understanding the legal framework provided by the Sectional Titles Schemes Management Act of 2011 (STSMA), its regulations, and the Electronic Communications and Transactions Act of 2002 (ECT Act).

1. LEGAL REQUIREMENTS FOR TRUSTEE RESOLUTIONS

Trustee resolutions in sectional title schemes are governed by the Prescribed Management Rules (PMRs) made under the regulations to the STSMA. PMR 14(4)(b) allows trustees to adopt resolutions in writing by majority vote “by a notice sent to each trustee which contains the text of any proposed resolutions and instructs the trustees to indicate their agreement to the resolution by their signature, which signatures must be received by the body corporate before expiry of the closing date specified in the notice”.

Section 12(a) of the ETA provides that “a requirement in law that a document or information must be in writing is met if the document or information is in the form of a data message”, so clearly a WhatsApp message is considered to be “in writing” as contemplated by PMR 14(4).

The trickier issue is what constitutes a “signature” in the context of electronic communication.

2. ELECTRONIC SIGNATURES AND THE ECT ACT

The ECT Act provides the legal basis for recognising electronic signatures in South Africa. According to the ECT Act there are two types of electronic signatures:

1. Standard Electronic Signature: This type of signature can be any electronic method that identifies the person and indicates their approval of the information communicated. Examples include a typed name, a scanned handwritten signature, or an explicit electronic affirmation such as a “Yes” in response to a WhatsApp message.
2. Advanced Electronic Signature: For more stringent requirements, an advanced electronic signature must be accredited by a recognised authority.

Section 13(1)(a) of the ETA provides that “Where a law requires a signature of a person, that requirement in relation to a data message is met only if an advanced electronic signature is used.” Because PMR 14(4)(b) requires the signatures of the trustees, it appears, in the first instance, that a trustee would need to use an Advanced Electronic Signature to sign a proposed trustee resolution via WhatsApp.

However, under Section 13(3) of the ETA, if the parties involved in an electronic transaction require a signature but have not specified what type, a broader range of electronic signatures can be acceptable provided the method used must:

a) - identify the person and indicate their approval of the information communicated [Section 13(3)(a) ETA]; and

b) - be reliable, considering the context and purpose of the communication [Section 13(3)(b) ETA].

3. USING WHATSAPP FOR TRUSTEE RESOLUTIONS

Based on the provisions of the STSMA and the ECT Act, trustees can use WhatsApp to take written resolutions, provided certain conditions are met:

1. Section 13(3) Compliance: Trustees can use WhatsApp to take resolutions if they agree that an explicit statement of consent (e.g., “Yes, I approve”) in the WhatsApp group suffices as a signature. It is advisable for the person agreeing to a resolution to include their typed out name after stating their agreement. This method identifies the trustee and indicates their approval, satisfying Section 13(3)(a).
2. Reliability: WhatsApp provides a timestamped and documented conversation thread, which is reliable and appropriate for the purposes of trustee resolutions. This meets the requirement of Section 13(3)(b).
3. Notification: All trustees must receive notice of the proposed resolution as well as a specified closing date by which responses are to be received. In a WhatsApp group dedicated to trustee communications, posting the proposed resolution and closing date clearly in the group chat ensures that all members are notified and are aware of the cut off date by which they should respond.
4. Explicit Consent: Trustees must explicitly state their approval (as previously agreed to suffice as a signature) or disapproval of the proposed resolution. A simple “Yes, I approve” followed by the trustee’s name, can serve as a valid electronic signature. It is important to note that there must not be any qualifications or conditions that qualify the agreement, because the explicit consent has to be unconditional to be valid.
5. Documentation: The WhatsApp conversation, including each trustee’s response, must be properly documented and archived. This ensures that there is a clear, traceable record of the resolution and each trustee’s consent.

4. PRACTICAL STEPS FOR COMPLIANCE

To effectively use WhatsApp for trustee resolutions, follow these practical steps:

1. Create a Dedicated WhatsApp Group: Establish a WhatsApp group specifically for trustee communications to ensure that all discussions and decisions are documented in one place.
2. Post Proposed Resolutions Clearly: When a resolution needs to be taken, post the full text of the resolution as well as the closing date in a WhatsApp message within the group.
3. Track Responses: Monitor and record each trustee’s response. Ensure the specific phrase that has been agreed to suffice as a signature is used followed by the trustee’s name and that a majority of trustees provide their signature as required.
4. Archive Conversations: Save the chat history or export it for future reference, ensuring that there is a detailed record of the decision-making process.

5. CONCLUSION

In conclusion, trustees of sectional title schemes can validly take written resolutions via WhatsApp, provided they comply with the requirements set out in PMR 14(4)(b) and the ECT Act.

By following best practices for notification, explicit consent, and documentation, trustees can leverage the convenience of WhatsApp while ensuring compliance with legal standards. This modern approach not only aligns with contemporary communication practices but also facilitates efficient and effective decision-making within sectional title schemes.

Courtesy: Paddocks Press

Article reference: Paddocks Press: Volume 19, Issue 5.

Web Link: https://www.paddocks.co.za/paddocks-press-newsletter/can-sectional-title-trustees-take-resolutions-via-whatsapp/

This article is published under the Creative Commons Attribution license.