The appointment of a managing agent holds distinct benefits for a Scheme. The task of managing and administering a scheme – whether large or small – is a complicated and time consuming one and there are few schemes with owners who have the time and knowledge to take on all of these demands for no financial compensation. Most schemes appoint a managing agent, generally a company or close corporation, who specialises in sectional title administration.
When appointing prospective managing agents, it is important to request references to ensure the proposed managing agent is reputable.
The tasks of a managing agent generally include, but are not limited to, the sending of monthly levy statements, the collection of monthly levies and all other monies due by owners to the body corporate, keeping the scheme’s financial records up to date and arranging an annual audit, preparing the annual budgets for approval at the annual general meeting, arranging for quotations for repairs and maintenance needed at the scheme. Also, sending out notices and generally assisting the trustees with tasks that arise in administering a body corporate.
As there are no formal prescribed activities for a managing agent, these need to be agreed upon and formulated in a contract, which will be signed by the trustees, on behalf of the body corporate.
Jurisdiction for a managing agent lies under the watchful eye of the Estate Agents Affairs Board (EEAB), therefore all managing agents/agencies are under a legal obligation to register with the EEAB.
When appointing prospective managing agents, it is important to request references to ensure the proposed managing agent is reputable. It is equally important to remember that the one with the cheapest quote may not necessarily be the one to render an efficient service, which could easily cost the body corporate more in the long run. Contractually speaking, managing agents are initially appointed for a period of 1 year and the appointment is then automatically renewed from year to year unless the body corporate notifies the managing agent to the contrary.
In most cases managing agents are able to improve the general performance of bodies corporate, assisting them to be more cash flush in the future. Through their contacts, good supplier base and knowledge of the market, good managing agents are worth their fees considering the benefits they bring to the scheme and the hours of work they put in monthly.
Article written by Johan Le Roux, Executive Director of Propell Levy Finance.