How a managing agent gives trustees authority
As sectional title apartments and townhouses become the homes of choice for an increasing number of buyers, the role of the trustees in sectional title schemes becomes ever-more important.
“Ultimately it is the trustees who make for a successful scheme where home values are protected and the owners can be sure that if they sell, they will get good returns on their investments,” says Andrew Schaefer, MD of property management company, Trafalgar.
“For a start, good trustees encourage neighbourliness and cooperation between unit owners, which is essential for a sectional title scheme to run well,” he says. “Arrogant and dictatorial trustees, on the other hand, will cause resentment and anger leading to a breakdown in communication, and either extreme apathy on the part of most owners or a ‘them and us’ division within the body corporate.”
However, he says, although the Sectional Titles Act gives trustees the authority to do all sorts of things, from enforcing conduct rules and collecting levies, to organising the maintenance of the common property, arranging for any repairs necessary and appointing a managing agent, many trustees don’t actually know how to apply this authority.
“In many instances, the trustees are well-meaning, civic-minded people who have been gratefully elected by the other members of the body corporate who are relieved at not having to take on the responsibilities of running the scheme themselves,” says Schaefer. “But the fact is that even trustees who are successful professionals or businesspeople in their own right do not necessarily have the specialised knowledge – nor the time – to manage the scheme properly on a day-to-day basis, and that is why it is essential for them to choose the right managing agent.”
Schaefer says that far from just sending out monthly statements and collecting levies, properly qualified agents from a management company have extensive knowledge of the Sectional Titles Act and will be available to attend trustee meetings and advise them on correct procedures and good practices.
“They will also assist in the selection and daily management of independent service providers such as garden maintenance, security, repair and insurance companies; organise meetings of the body corporate; draw up expenditure estimates and budgets for the owners to approve; and ensure that the scheme’s insurance premiums, city council charges and other bills are paid on time,” he says, noting that experienced managing agents will also know exactly what to do if any owners in the scheme or their tenants break the conduct rules or start to fall into arrears on their levy payments – and resolve the problem before it becomes a major issue that could put the future of the whole scheme, and the investments of many innocent owners, at risk.
“The appointment of a managing agent does not of course mean that trustees can take a completely hands-off approach to running their sectional title scheme,” says Schaefer. “They must still authorise all body corporate expenditure, for example, and should keep a close eye on everything that happens in their scheme with regard to security, maintenance and compliance with the rules.
“What it should mean, though, is that they have access to the expert advice and established administrative systems that enable them to do a really great job of fulfilling their responsibilities to the body corporate in terms of both the physical and financial management of their schemes.
“And to that end they need to be very careful in their selection of a knowledgeable, capable and diligent agent from a management company with a real track record of success.”