How to find the most ideal managing agent
Category Newsletter: Article
Sectional Title schemes function much like “mini-democracies”, whereby the body corporate elects trustees who manage the daily operation of a scheme in terms of maintenance, administrative and financial functions.
Oftentimes, trustees are unable to exercise some of the above mentioned duties due to working full-time jobs and will therefore appoint a managing agent to perform one or more of these functions.
Larger schemes are more likely to rely on managing agents, primarily because of the sheer size of the properties which involve more time and expertise in order to manage them effectively.
Finding a suitable candidate
Managing agents first need to sign a management agreement with the body corporate that is in accordance to the requirements of the property.
But before signing on the dotted line, trustees will first need to find a suitable managing agent with a well established track record, based on good work ethic and a reliable list of references.
1. It’s amazing the amount of information you can gather by just interacting with the community. Therefore, a tip when finding a suitable managing agent is to speak to trustees from surrounding schemes and find out if they can recommend a worthy managing agent. If they have a certain agent in mind, ask for the contact details of the other schemes they currently manage. In this way you will be gathering information from more than one source to attain a comprehensive understanding of the managing agent in question.
2. Ensure that the managing agent has a valid Fidelity Fund Certificate with the Estate Agency Affairs Board (EAAB). Since managing agents collect levies and deal with other people’s money, they are legally required to register with the EAAB, a precaution that ensures clients’ money is protected by the fidelity fund when deposited into a managing agents trust account. There have been many cases of fraud relating to central or “bucket” trust accounts in the past and therefore it is our recommendation to ensure that the managing agent you choose operates separate bank accounts in the name of your scheme. This creates transparency and therefore much less risk provided the managing agent has additional fidelity cover with a reputable insurer.
3. Once the most suitable management agent has been appointed, the last step is to ensure that the agreement stipulates their specific duties and responsibilities, along with the statutory rights they have in the management of a Sectional Title scheme. The trustees also need to fully understand their responsibilities and the role they play in the management of the scheme.
Coastal Property Management Services is a specialist property management and financial services company offering bespoke Sectional Title management services to residential and commercial bodies corporate.
Author: Coastal Property Group
