In accordance with the Sectional Titles Act [Management Rule 46(1)], the body corporate trustees have the responsibility of appointing a managing agent.
At least two trustees must sign the written contract appointing a managing agent. This contract is valid for a 12-month period, and should notice not be given to the managing agent, the contract is then renewed automatically for an additional 12-month period.
In the case of termination of a current managing agent, trustees must have the new contract signed by the intended agent, who then typically has two months to take over from the present agent.
When given the task of choosing a new managing agent for a sectional title complex, this should not be a decision made with the intention of cutting costs.
The role of a managing agent today is a complex one and requires a professional approach. To carry out this critical role requires knowledge of the Sectional Title Act, property law, building construction, health and safety regulations, basic accounting and much more.
This is because the managing agent and their company will be responsible for the overall management and financials of the entire complex. For your convenience, we have compiled a list of the additional factors that trustees should take into account when appointing a managing agent.
A managing agent MUST be a registered estate agent; they must also have an up-to-date Fidelity Fund Certificate issued by the Estate Agency Affairs Board.
Trustees negligent enough to appoint a non-Estate Agent may be held liable for the body corporate losses in their private capacities.
When an estate agent is registered and has a Fidelity Fund Certificate, it ensures that in the case of fraudulent activity or theft by that managing agent, the Estate Agent’s Board will refund the body corporate for money lost.
Is the agent a member of the National Association of Managing Agents of South Africa (NAMASA)? Having a registered NAMASA agent may soon become a condition when obtaining bonds from banks on sectional title properties.
Having a managing agent with years of experience is beneficial for a number of reasons. They will have previous experience with dealing with typical issues that arise and know how to avoid such issues.
This will soon be the benchmark for anyone in the estate agent industry. Ensure that the company you select has the University of Cape Town Certificate in Sectional Titles Scheme Management.
It’s important to make sure that the managing agent you appoint offers all of the services needed rather than just one or two.
The managing agent also must be familiar and up-to-date with the Sectional Titles Act and its amendments.
If a company has a great track record and happy clients, it means that they are trustworthy and proficient at what they do.
Choose a company with more than 3 references from different body corporates
Request the following:
Having effective reporting is vital to the success of a sectional title scheme. Trustees need to know how competent a managing agent’s monthly reporting is in order to make sure that:
Compiling a monthly sectional title scheme management report
It’s important for trustees to make mention of their reporting requirements in the contract and to ensure the monthly reporting includes all of the necessary information such as:
A managing agent will attend various meetings where they will have to address the body corporate. This will demand skills in conducting a meeting, public speaking, taking minutes and managing people and their grievances.
This is where a practiced managing agent will be beneficial as confidence and these skills are learnt through past experience. It must also be stated in the contract how often a year the managing agent will attend trustee meetings and at what cost.
A managing agent works closely with trustees, owners and tenants , so it’s crucial for all parties to get along. Therefore, it’s important to make sure that the managing agent chosen is trustworthy and generally liked by all.
Visiting the work premises of an agent will help indicate whether they are organised. The number of staff will also indicate if they have a back-up portfolio manager to use when your manager is sick?
It’s easy to see why a cheap managing agent quote is almost always not the agent to go for. It may save money at first however the company may not offer all of the necessary management services.
Find out more about Sectional Title Scheme Management
Contact a legal expert to discuss your Sectional Title Scheme Rules.
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