Guidelines for choosing a sectional title managing agent
Above: Les Reynard with 5 of the 6 editions of Graham Paddocks’s Sectional Title Survival Manual.

Managing Agents are appointed by body corporate trustees in terms of management rule 46(1) under the Sectional Titles Act. The appointment must be by way of a written contract signed by at least two trustees. The appointment should be for an initial year and then be renewed each year.

When it comes to terminating the managing agent’s contract, the trustees should give notice to the existing agent, get a new contract signed by the new agent and expect the takeover process to take about two months.

How should trustees choose a new agent? Usually they just phone around getting prices and use these as the main influence on their choice. This method makes no sense when you are choosing a company to take responsibility for your complex that is insured for many millions of rands.

Other factors trustees should consider when making a change include:

1. All managing agents must be registered estate agents. Obtain proof by seeing a copy of their Fidelity Fund Certificate issued by the Estate Agency Affairs Board. It obviously must not be out of date. This gives the body corporate cover by the Fidelity Fund operated by the Estate Agency Affairs board for loss arising from theft by the managing agent.

2. Are they members of the National Association of Managing Agents of South Africa? And are they willing, in the contract, to agree to be bound by the NAMASA Code of Conduct? I expect that in the future banks will not offer bonds on sectional title properties that are not managed by a registered NAMASA agent.

3. Does the managing agent have a good pedigree? Has the agency been around a long time? Years of experience means that your problems will have been dealt with before in other schemes. Many new businesses close down within 18 months . why take the chance on a new company?

4. Choose a company where at least the principal has the University of Cape Town Certificate in Sectional Titles Scheme Management. This is the gentry levelh qualification for anyone working in this industry.

5. If you choose to not go with the giants in the industry . choose a company that is personally run by its owner(s). As with a family-run restaurant, you will find the service superior to that in a restaurant run by an employee manager. (I admit to some bias here, as my company is owner/family run and I think this is an important factor.)

6. Choose a company that offers more than just a bookkeeping service. You really need a managing agent that is

familiar with the Sectional Titles Act and its amendments. Have they kept their knowledge up to date? As a test ask them to explain Management Rule 33 to you . this deals with the authorities needed for luxurious and non-luxurious improvements to the common property.

7. Choose a company that can supply you with references from at least ten existing and satisfied bodies corporate. Here you want the chairmen's names, phone numbers and the name and address of each complex. Ask for chairmen that have been trustees for at least one year, but the longer the better.

8. You need to know that the agent's monthly reporting will be suitable. What is their levy collection policy? Are outstanding levies handed over to collection attorneys promptly? Request copies of their monthly financial reports to make sure they are understandable. What type of report will you get in regard to outstanding levies and how will you know what the state of each action against defaulting owners. Think about what additional information you need each month and make sure that it will be available. Ensure that your requirements are clearly stated in the contract of appointment.

9. Part of the agent’s usual duties is to attend trustees and body corporate meetings. Make sure that the agent can speak in public and deal with difficult people. Get the assurance that the agent can manage meetings well, displaying the confidence of experience and knowledge.

10. The personality of the agent is important, because you will have to work closely with them. You want to choose someone whose style suits you and who you think you will like and trust. This means that a face-to-face meeting between the agent and the trustees is vital in the selection process. This also gives you an opportunity to assess them in an informal setting.

11. Visit an agent's work premises. You can soon tell if they are disorganised or overworked. Find out who will do your scheme's work when the agent is sick or on holiday.

12. Compare the managing agent's fees with those of other service providers. If you find (as has happened in Port Elizabeth where I run my managing agency) that your grass cutting service charges more for twice-monthly visits than the agent you are about to employ . think again.

The cheapest quote will seldom be the best one. For a few rands more per unit per month you can get an agent you and the owners will be happy with and who can give a comprehensive and competent service.

Article by: Les Reynard - www.paddocks.co.za