When residing in a sectional title, it's vital that you know how your building is being managed, who it's being managed by and what to do if you run into problems.
“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 and owners in terms of the Sectional Title Act.”
In order to get the mo st out of sectional title living, it is also important to understand the role that the managing agent plays in the ecosystem. This is according to Carl Smit, Managing Director of Sandak-Lewin Property Trust, who says 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 says 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 with a managing agent in place, instead of the owners and trustees dealing with each other directly, issues are dealt with through the company.
“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 and owners in terms of the Sectional Title Act.”
According to Smit, the aspect of continuity is also a key factor when it comes to managing a sectional title scheme. He says because 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 to leave the company. The ability to perform prescribed duties will not be effected, he says.
Smit says 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 enquires from owners.”
From a financial aspect, Smit says the managing agent’s duties include collecting levies from the owners, managing the body corporates bank accounts, paying body corporate expenses including taxes, water and electricity bills as well as providing monthly financial statements and reports.
The managing agent company is also responsible for appointing supervisors, caretakers and gardeners, and essentially maintaining the property, he says.
A reputable managing agent should be registered with the Estate Agents Affairs Board (EAAB). “This is 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.”
Smit says each of the property managers from the managing agent company should also have completed the Sectional Title Management Course from Graham Paddock in collaboration with the University of Cape Town.
He says 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 property management company’s duty 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.”