The holistic role of a managing agent
13 May 2022 | Nicole Nel
When owning in a sectional title scheme, members of the body corporate are often unaware of the holistic role that managing agents play in the management of the scheme, and only become mindful of the long list of duties that many managing agents have to fulfil on behalf of their clients, the bodies corporate.
In terms of Prescribed Management Rule (“PMR”) 2(1)(j) of Annexure 1 to the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”), a “managing agent” is defined as
“any person who provides scheme management services to a body corporate for reward, whether monetary or otherwise, including any person who is employed to render such services”.
Further to this, PMR 28(5) states that the body corporate may, if the trustees have passed a trustee resolution, or the members of the body corporate have passed an ordinary resolution, appoint a managing agent to perform specified financial, administrative, secretarial, or any other management services under the supervision of the trustees. It is imperative that the services which the body corporate require the managing agent to perform are clearly outlined in the management agreement between the body corporate, represented by the trustees, and the managing agent.
Let’s now expand on the traditional duties that many of the managing agents in our industry perform, which will provide us with a general overview of what is reasonable in terms of your expectations of your managing agent.
Financial duties
Arguably, one of the most vital roles that a managing agent plays is in terms of the collection of contributions recovered from members within the scheme.
Another important financial management role, that the managing agent plays, is the management of the body corporate’s administrative and reserve funds and bank accounts, ensuring that the necessary statutory obligations are complied with. In this regard, it is essential for a managing agent to keep a record of all books of account of the body corporate, which must be kept in perpetuity.
Although not required, some managing agents also offer the service of preparing the body corporate’s maintenance, repair and replacement plan.
The last financial duty we will touch on in this article, is ensuring that the scheme’s annual financial statements are audited by a registered auditor, unless the body corporate only has one member.
Administrative duties
Emails. Emails. Emails! Almost every managing agent will say that they spend a large majority of their time responding to emails received by trustees, members, occupiers and contractors to the scheme. Queries, complaints, requests for information, managing agents have to deal with it all.
As per PMR 27, the managing agent is required to keep a record of, including but not limited to, the scheme’s governance documentation, minutes of all meetings, lists of members, trustees and occupiers, and their contact information.
The managing agent is also required to provide members with an opportunity to inspect any of the documents mentioned in terms of PMR 26 and 27. Contrary to opposing views, we are of the opinion, that this duty is not a contravention of the Protection of Personal Information Act 4 of 2013.
Secretarial duties
The main secretarial duty that managing agents are expected to perform, are related to annual, special and trustee meetings.
With reference to annual and special general meetings, the managing agent is tasked with preparation and circulation of the agenda and notice packs, in accordance with the provisions of the STSMA, to all members, and when necessary, the registered bondholders, within the scheme.
Regardless of the method of holding the meeting, the managing agent will be responsible for booking an appropriate venue and/or catering as well as setting up an appropriate voting platform, i.e. online or voting cards.
In terms of all types of meetings, the managing agent is usually the chairperson, administrator, as well as the assigned minute taker. The managing agent is also the person tasked with distributing the minutes to all members, sometimes very difficult to achieve, as per the 7 day time period.
Other management services
Sometimes, additional management services are offered as “add-ons” or “value-added services” namely:
scheme maintenance,
sending out of warnings to occupiers,
gathering of contractor quotes for improvements, and/or
being the information officer for your scheme in terms of POPI, CSOS disputes, etc.
As these are services that are not clearly regulated by the STSMA, it is our recommendation, that any additional management services must always be clearly outlined within your management agreement.
We hope that this article opened your eyes to some of the traditional duties that managing agents are expected to perform in terms of their management agreements with body corporates, and that you will think twice before assuming that being a managing agent is a simple task.
For more information or to obtain our assistance in this regard, please contact us at TVDM Consultants on info@tvdmconsultants.com or 061 536 3138.
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