The Prescribed Management Rules provide that the Trustees may from time to time, and must if required to do so by a mortgagee holding 25% of the total mortgage bonds over units in the scheme, or if required by members in a general meeting to do so, appoint a managing agent to manage the affairs of the Body Corporate
If an agent is appointed the Trustees must ensure that the Managing Agent is registered as an Estate Agent with the Estate Agency Affairs Board and has a current Fidelity Certificate. This will protect the Body Corporate in the event of misappropriation or theft of trust monies.
It will also ensure that the Managing Agent is suitably qualified – that he or she has an NQF4 or NQF5 qualification, and often a certificate in sectional schemes management.
The Managing Agent should also be registered with NAMA (the National Association of Managing Agents), so you can be sure that it subscribes to NAMA’s code of conduct and good practice.
Trustees are the appointed representatives of all the unit owners in the scheme, but they still have their day jobs and invariably are not able to dedicate all their time to managing the scheme. It is prudent for them to appoint a professional company with all the skills and expertise to deal with the day-to-day management of the scheme.
In addition to being registered with the Estate Agency Affairs Board and being a member of NAMA, the enthusiasm, dedication and experience that a Managing Agent shows during the interview process will speak volumes in aiding the Trustees to make a decision as to which company to appoint.
In legal terms the Trustees ‘delegate’ their responsibilities to the Managing Agent in terms of the Sectional Titles Act.
This process of delegation must take place in terms of a written contract of appointment, and the Act provides that the contract must be for a year at a time – BUT BEWARE, THE CONTRACT IS AUTOMATICALLY RENEWABLE ON A YEAR TO YEAR BASIS unless notice of termination of the contract is given prior to the expiry of the year.
The Managing Agent acting on the Trustees’ instructions send out the monthly levy statements, collect levies and contributions from the owners, manage the bank accounts of the body corporate, pay salaries and other expenses of the body corporate, fulfil the scheme’s obligations towards local authorities, assist the Trustees in enforcing the rules, arrange for the insurance policy and pay the monthly premium, provide administrative services such as arranging meetings and so on.
The Managing Agent is a unit owner’s first port of call on a daily basis if there is anything to discuss regarding the Body Corporate – if the roof above his unit is leaking or the motorized gate is broken, or his electricity account is incorrectly calculated.
Managing the affairs of a sectional title scheme properly, professionally and efficiently is a challenging one. Choose your Managing Agent well and don’t ever let that old adage of “goedkoop is duurkoop” be your downfall!
