5 reasons to appoint a managing agent

Becoming a trustee in a sectional title scheme can be a daunting task.

The Sectional Titles Schemes Management Act (STSMA), places an inordinate amount of responsibility on the body corporate, and, ipso facto, the trustees. In terms of the STSMA, the buck stops with the trustees, and they are responsible for all matters pertaining to the body corporate, such as finance, maintenance, insurance and legal compliance.

What is a Trustee:
Trustees are, typically, members of a body corporateor homeowners association, elected at an annual general meeting.

What are their functions and duties?
In a nutshell, the primary function of the trustees is the control and management of the body corporate.

Crucial duties therein include keeping proper sets of accounts, insuring the property for the correct values and cover, and maintaining the common property. Then there's the statutory obligations, such as general meetings, audits, CSOS submissions, labour relations and taxation.

There are many further responsibilities within each of the aforementioned functions, and each requires a certain level of understanding, experience and, above all, a duty of care.
It could be a minefield, and for trustees to ensure that they fulfil their fiduciary obligations, as set out in the STSMA, trustees would be well advised to seek the services of an experienced and compliant managing agent.

Moreover, the role of the trustee is unpaid, and, for the most part, done in the trustees' spare time, and we all know that in today's world, spare time is a scarce and valuable resource.

This is where a good managing agent holds its own.

What is a managing agent?
A managing agent is an estate agent, as defined by the Property Practitioners Regulatory Authority of South Africa, that provides property management services to bodies corporate and homeowners associations.

What do managing agents do?
Experienced managing agents will likely have dealt with whatever circumstance you may be faced with as a trustee.

From setting the budgets, to applying the disciplines required by the STSMA, the managing agent is well placed to assist and advise the trustees.

Managing agents, inter alia, issue statemements for levies (the lifeblood of the body corporate) and collect same from the members. They pay the creditors. They issue formal notices and correspondences on behalf of the trustees. They maintain records and keep a set of accounts.

They operate bank accounts on behalf of the body corporate. They monitor compliance. They advise and guide the trustees.

How does one appoint a managing agent?
Section 4(a) and Section 7(1) of the STSMA enables trustees of a sectional title scheme to employ any agents or employees that the body corporate deems necessary, to assist them in managing the scheme.

So, here you are guided by the STSMA and or the Constitution, whichever is applicable, but in general, trustees appoint managing agents by way of a trustee resolution. Managing agents must be appointed in terms of a written management agreement, specifying the duties, duration of the contract and fees to be charged.

In summary, here are 5 reasons to appoint a managing agent:

1.    Managing agents have the tools to manage the body corporate.
2.    Managing agents have the experience in managing sectional title schemes.
3.    Managing agents have forged relationships with service providers, such as insurers and                 contractors, and can ensure value for money, economies of scale and compliance.
4.    Managing agents keep abreast with developments in the legal framework of the STSMA.
5.    Managing agents save time, money, and resources.

Hang on, I've heard about an Executive Managing Agent, what is that?
An Executive Managing Agent (EMA) is a managing agent appointed to carry out all the functions and powers of the trustees in terms of the rules.

Here though, in terms of Prescribed Management Rule (PMR) 28(1), a body corporate may by special resolution, appoint an executive managing agent to perform the functions and exercise the powers that would otherwise be performed and exercised by the trustees. Or, PMR 28(2) also provides that members holding at least 25% of the total quotas of all sections may apply to the Community Schemes Ombud Service (CSOS) for the appointment of an executive managing agent.

The Bellbuoy Group:
The Bellbuoy Group, a managing agency situated in Gqeberha, offers these services, and more, to bodies corporate and homeowners associations, and, due to their intelligent use of technology, are able to offer administrative, financial and compliance services to schemes situated anywhere in the country.

If you need to appoint a managing agent, or need any assistance with the management or administration of your body corporate, then contact The Bellbuoy Group on 041 374 4444 or visit us at www.bellbuoy.co.za, or email our General Manager: Property Management & Business Development, Martin Bester at gm@bellbuoy.co.za