Most sectional owners believe that a managing agent’s function is to send out statements and collect any levies that are to be collected or are outstanding. This is the core function without a doubt and is their main responsibility, but a competent agent will do a lot more for the body corporate.
Managing a sectional scheme requires a very comprehensive knowledge of the Sectional Title Act and rules, and access to a secretarial and accounting facilities. Although some body corporates would rather manage their own scheme without any assistance, this is seldom the case as most schemes possess neither the knowledge nor the facilities to manage themselves. Majority of body corporates will appoint a registered managing agent to take over the day to day management of the scheme.
A managing agent is appointed in terms of the management rule 46, which states the new appointment must be in writing for a period of one year, with automatic renewal on the anniversary of appointment unless either party gives notice to the other that the contract will not be renewed. If the appointment of the managing agent is not reduced to writing within thirty days, it is voidable at the opinion of either party. The trustees are entitled to appoint a managing agent and must do so if directed by a simple majority of members of the body corporate at a general meeting or by a registered mortgagee who holds 50% of the bonds within a scheme.
The decision as to which agent to appoint is usually made by the trustees and not the body corporate, even if the decision to appoint a managing agent may have been made by the body corporate. The body corporate can, by special resolution, terminate a managing agents appointment in which case the agent will have the right to claim for compensation from the body corporate should it be proved that the reason for termination was not justified.
Trustees who are involved in their duties usually compile a list of managing agent who operates in the area in which the scheme is situated. These agent are invited to give a presentation at special trustees meeting, at which the trustees should ask questions to establish the agents level of knowledge, pertaining to the sectional title act and how to manage a scheme. It is important to ask and check the agent’s references. All managing agents who handle body corporate money must be in possession of a current fidelity fund certificate issued by the Estate Agents Affairs Board. (www.eaab.org.za). If the agent is not able to produce this, the body corporate should check with the EAAB before appointing the agent.
Management rule 48 requires a managing agent who is aware of anything that adversely affects the scheme or sections within the scheme to bring the matter to the attention of all the owners and holders or registered mortgage bonds who have notified the body corporate of their interest.