Advice and Opinion

A Managing Agent's role is vital for a smooth Sectional Title Scheme

When residing in a sectional title dwelling, it’s vital to know how your building is being managed, who it’s being managed by and what to do if you run into problems.

It is therefore also important to understand the role that a managing agent plays in the ecosystem in order to get the most out of sectional title living. This is according to Carl Smit, Managing Director of Sandak-Lewin Property Trust, who says that managing agents play a key role in maintaining a sectional title scheme, and that it is essential for a scheme to hire a reputable management company.

Smit explains that managing agents act as the ‘middle man’ between residents of the scheme and the trustees, which is necessary when issues or conflict arise between owners or trustees. Furthermore he says that with a managing agent in place, issues are dealt with through the company instead of owners and trustees dealing with each other directly. “It is best practice for a sectional title scheme to hire an independent party, as a managing agent needs to take control of the extensive financial, administrative and secretarial issues of the scheme as well as guide the trustees/owners in terms of the Sectional Title Act”.

“The aspect of continuity is also a key factor when it comes to managing a sectional title scheme. As the scheme will have a contract with an entire company and not one individual, it will not be affected should the assigned managing agent decide leave the company. The ability to perform prescribed duties will not be effected,” he adds.

Smit explains that the role of a managing agent is to manage the common property of the scheme on behalf of the trustees and owners. “The three areas that agents are responsible for include admin, finance and property management. When it comes to administrative duties, the managing agent is responsible for arranging the annual general meeting, taking minutes and following-up on activities, keeping a record of all activities that take place on the premises, arranging building insurance cover and responding to enquiries from owners. From a financial aspect, the managing agent’s duties include collecting levies from the owners, manage the body corporates bank accounts, paying body corporate expenses including taxes and water and electricity bills as well as provide month financial statements and reports. The managing agent company is also responsible for appointing supervisors, caretakers and gardeners, and essentially maintaining the property.”

He says that a reputable managing agent should be registered with the Estate Agents Affairs Board (EAAB). “This is very important as it allows the body corporate to be refunded from the Estate Agent’s Board Fidelity Fund should any loss occur via the agent as a result of theft or fraud on their part. The property management company must also be a member of the National Association of Managing Agents (NAMA) and have the required indemnity policies in place to cover the misappropriation of its client’s funds. Each of the property managers of the managing agent company should also have completed the Sectional Title Management Course of Graham Paddock in collaboration with the University of Cape Town,” he explains.

Smit further explains when appointing a managing agent, it is key for the trustees or owners to ask for at least 10 contactable references, which will assist them in determining the legitimacy and standard of work offered by the company.

“Although it is the duty of the property management company is to look after the scheme, the trustees also need to stay involved and make sure the managing agents are fulfilling the duties contractually agreed upon,” he says.