It is crucial to make informed decisions when selecting & appointing a Managing Agent, to ensure correct and efficient management of the scheme, in line with the Sectional Title Schemes Management Act, and in the best interest of all owners.
Strictly speaking, Managing Agents take instructions from the Scheme Executives (Trustees), however a Managing Agent can make or break a Body Corporate’s operations. Hence the selection criteria being so important. Managing Agents, together with the Scheme Executives (Trustees) are obligated to act within the parameters of the Sectional Title Schemes Management Act, and to always act in the best interest of all members (owners) of the Body Corporate.
Currently, Managing Agents are included in the definition of estate agents and are managed by the EAAB (Estate Agency Affairs Board). They require Fidelity Fund Certificates (FFC’s) and are regulated like all other agents
Managing Agents’ experience, integrity, trustworthiness, and credibility should be necessary and required factors which have been proven in order to be considered to manage a scheme.
Checklist when selecting a Managing Agent:
- Valid & Current Fidelity Fund Certificates (FFC’s): Ensure that the Managing Agency and Principal hold valid and current FFC’s with the EAAB (Estate Agency Affairs Board). The Managing Agent must provide proof of the certification. Check with EAAB via the following website: www.eaab.org.za. In the event of the FFC not reflecting, call EAAB to confirm
- References & Testimonials: Obtain a good quota of references and testimonials from various Trustees from a number of different Sectional Title Schemes which have been managed by the Managing Agent being considered.
- Online Reviews: Check online reviews and consider reviews of people who provide solid information about their personal experiences as owners and Trustees (eg. Google reviews, HelloPeter, etc)
- Portfolio Manager Qualifications & Experience: Establish who the assigned Portfolio Manager would be for the scheme: does this person have Sectional Title qualifications, how long have they been operating as a Portfolio Manager, obtain references and testimonials. Arrange an interview with the Principal and Portfolio Manager
- Accounts/Finance Management: Enquire about the qualifications and experience of the person who would be managing the scheme’s accounts and finances, and that the respective person is well versed and experienced in the specific financial requirements for Sectional Title schemes.
- Website & Processes: Look at the considered Managing Agents’ websites and see which processes they use. Are they progressive, technologically savvy, and on top of their game
- Insurance: The Managing Agent should have professional fidelity and indemnity insurance
- NAMA (National Associations of Managing Agents) Membership: Whilst not a legal requirement, membership with NAMA speaks to a certain level of credibility of and involvement by the Managing Agent in the industry. Either ask the Managing Agents being considered whether they are members or check directly with NAMA (www.nama.org.za)
- Council of Debt Collectors: Establish whether the Managing Agent is registered with ‘The Council for Debt Collectors’. Any form of collecting monies which would include collecting on arrear levies, dispatching letters of demand, etc. requires that the Managing Agent be registered. Check with the CFDC (www.cfdc.org.za)
- Contract: Once the Scheme Executives have decided on a Managing Agent, ensure that the contract clearly stipulates what is expected of the Managing Agent, and that the contract is watertight. It is highly recommended to have a Sectional Title Specialist Attorney review the contract for input to ensure that the most pertinent requirements are covered and in place.
It is absolutely essential to make good, informed decisions when selecting a Managing Agent. Decisions should not be made on cost alone; an uninformed decision could potentially result in the compromising of members’ properties and rights by the very parties who have been entrusted to protect and look after them.
Be sure to make good, informed decisions in the best interests of your Body Corporate!
© The Sectional Title Guru
