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How to choose a great managing agent
Category Newsletter: Article 1
To be a well-functioning, successful team, it is a common belief that you need good, experienced leadership that is tried and tested. This is true on the sports field, board room and many other spheres of life.
If you are a property owner within a sectional title scheme then you too fall part of a team, known as a Body Corporate. Thus, you too need experienced leadership if you intend on being a part of a successful team. The outcome of which will not only enhance the lifestyle of those who choose to live within the scheme but also for the investor who intends on growing value out of his or her property.
As has been attributed to Francis Bacon, "Knowledge is Power". Below we intend to unpack the basic concepts, responsibilities, and duties in a sectional title scheme and therefore not only provide clarity, but also help you determine what direction you want your team to take!
What is a Body Corporate?
A Body Corporate is a legal entity made up of the owners of a sectional title scheme. If you are a registered owner of a unit in a sectional title scheme, then you are a member of the Body Corporate. The role of a Body Corporate in general is to administer and manage the common property for the benefit of all the owners.
What does a Body Corporate do?
Sectional Title management is primarily governed by the Sectional Titles Act and the Sectional Title Schemes Management Act. The essence of which is that it is the Body Corporate's responsibility to maintain all the common property and keep it in a state of good serviceable repair, whilst owners must repair and maintain his or her own section.
To make this easier however, the owners need to nominate a select group called "Trustees". The Body Corporate's powers are then delegated to the nominated Trustees. Thus, in terms of the Act, the owners in a scheme hand over a large amount of responsibility to a small, select group of individuals, who are appointed trustees.
What does a Body Corporate Trustee do?
A Body Corporate Trustee's duties include but are not limited to:
- To record and keep general meeting minutes and preferably trustee meeting minutes.
- The general meeting minutes are to be kept in a book (Minute book) and these are required to be kept as long as the sectional title scheme is registered. In other words, these cannot be destroyed.
- Keep accounting records for 6 years. Make available books of account and records to owners, managing agents or mortgagee who place a reasonable request in writing and only where this does not breach other statutory act such as the Protection of Personal information Act (POPIA).
- Insure the building.
- Determine monthly levy and advise owners in writing.
- Keep a record of rules applicable to the Body Corporate and enforce the rules equally and fairly.
- Deposit Body Corporate Admin and Reserve funds into a registered bank account or financial institution chosen by the trustees.
- A Public Officer will need to be appointed, usually a trustee who will be required by law to submit regular tax returns and be accountable to SARS.
- In the event of the Body Corporate having employees, the trustees will need to ensure that the Basic Conditions of Employment Act and Occupational Health and Safety Act are complied with at all times. Furthermore, UIF contributions will need to be paid on a monthly basis.
- Elect a Chairperson
What does a Body Corporate Chairperson do?
A chairperson is elected by his or her fellow trustees at the first meeting of trustees after the Annual General Meeting (AGM) and his or her term is until the end of the next AGM.
A chairperson has like all trustees, a deliberate vote but in the event of a deadlock, also has a casting vote at a trustees meeting (unless there are only 2 trustees). However, the chairman does not have any additional voting power at general meetings.
A few of the chairperson's roles are:
- The Chairing of all meetings.
- Ensuring policies and procedures on good governance at the scheme are in place to avoid situations of theft and fraud.
- Liaising with managing agent to pass on trustees' decisions/ resolutions.
- If necessary, compiling a chairperson's report to all owners/ stakeholders at the AGM.
- Resolving any disputes that may arise between Trustees by mediating same at the board meetings.
It is worth mentioning that a Trustee / Chairperson cannot be paid for the services they perform unless a special resolution is obtained, however the chairperson and trustees can be reimbursed for any necessary expense incurred. Additionally, before one can collect levies from an owner, that person collecting the levy must be registered as an Estate Agent and have obtained a Fidelity Fund Certificate.
What does a property manager do?
If all of this seems daunting and you feel like you have just run onto a rugby pitch for the first time, not sure if you are wearing rugby boots or sandals, then you will soon realise that an experienced coach is probably your best friend.
It would be highly advisable to engage the services of a professional Managing Agent, who can guide you and take on many of those time-consuming activities. However, when choosing a Property Manager, you should ask yourself the following questions:
- Does the managing agent have the necessary infrastructure to perform well ?
- Do they have the required qualifications and registrations?
- Is there a system of accounting that is professional and easily accessible?
- Do they have a proven track-record with Sectional Schemes and the legislations which governs them?
- Do they provide a personal service which is focused on your needs?
- Are there any hidden costs?
- Do they have a reputation of being efficient and trustworthy?
Here at Wakefields Property Management, we are passionate about service. It is this passion that has carried us for over 80 years. Built from the ground up on the 3rd September 1939 to becoming KwaZulu Natal's leading provider of specialist, professional property management services.
Owned and operated by the Wakefields family since its formation, Wakefields Property Management prides itself on personal service, attention to detail, transparency and good governance.
Every scheme is managed by an allocated team lead by a Portfolio Manager. The team includes a secretary, credit controller, bookkeeper and building inspector.
We have state of the art industry leading technology which allows the Trustees to access their financial position, cash flow statements, arrears, documents etc, live over the web at any time.
We are not only regulated by the EAAB and independent auditors, but we pride ourselves on the mantra that trust is something you earn.
The expectations from and for owners in a sectional title scheme are understandably tall but having a well experienced, knowledgeable partner is key to success. Contact Us to learn more.
Author: Wakefields Property Management
