Why is my managing agent not doing what they are supposed to do?

Managing Agent vs Executive Management Agent

It is not uncommon for owners in a Sectional Title complex to feel disgruntled when it comes to what they are expecting from their managing agent. The sad part is that most owners do not make the effort to study the Sectional Titles Act, nor the Sectional Titles Schemes Management Act before they commence into sweeping statements. And yes, it is true, there are companies out there who are trying to make a quick buck and are putting the industry into disrepute, but understanding the law is of utmost importance. We have decided to put a simple document together as to the difference between a managing agent vs an executive management agent.

Understanding the Sectional Titles Management Law

Understanding the intricacies of property law can be daunting, especially when delving into the specifics of sectional title ownership in South Africa. However, arm yourself with a clear guide, and you’ll navigate this complex field with confidence. Let’s unpack the South African Sectional Titles Act of 1986 and the Sectional Titles Schemes Management Act of 2011 in a simplified manner to empower you to grasp the essentials.

Firstly, the Sectional Titles Act 95 of 1986 essentially lays the foundation for the creation and management of sectional title schemes. Think of it as the rule book for apartment blocks, townhouse complexes, and similar developments where individual ownership of units is combined with shared ownership of common property. This Act defines how schemes are established, how they’re run, and the rights and obligations of owners.

The Sectional Titles Schemes Management Act 8 of 2011 builds on this by providing more detailed governance on the management and operation of these schemes. It specifies rules regarding meetings, management, and financial administration, aiming to ensure these communities function smoothly.

Now, when it comes to management, you’ll need to understand two key roles: the managing agent and the executive managing agent.

Managing Agent Vs Executive Managing Agent

The managing agent is like the assistant to the MD of a company, ensuring that the sectional titles scheme runs harmoniously. They handle daily operations, financial management, and administrative tasks. Ultimately the Trustees of the Body Corporate is the ‘MD of the Company’. The Trustees, who are first and foremost responsible for the management of the complex, ask the managing agent (assistant) to assist them in the smooth running of the sectional title complex.

If you’re part of a body corporate – which is a collective of all the owners in a sectional title scheme – the managing agent does some of the heavy lifting on your behalf, ensuring legal compliance and smooth operation.

Tasks often include:

  • Collecting levies from owners to pay for shared property expenses.
  • Organizing meetings and taking minutes.
  • Managing common property and arranging repairs when needed.
  • Keeping financial records and preparing budgets and financial statements for audits.

Why use an Executive Managing Agent in your Sectional Title Complex?

In some instances, no one in the complex is prepared to use their own free time to manage the complex, or the trustees have zero knowledge of the Sectional Title Management Act. An executive managing agent is a property management company that takes over the day-to-day management of the complex.

They’re like a specialized manager or consultant called in for their expertise. Apart from having owners who do not want to become involved in the management of the complex, this role was also created to help larger or more complicated schemes that need an extra level of management.

They take on more intensive responsibilities, such as:

  • Developing strategic plans for long-term maintenance and financial stability.
  • Advising on legal and compliance issues.
  • Implementing complex projects that go beyond the day-to-day.
  • Management of the Maintenance of the Complex
  • Implementation of the Rules & Regulations of the Complex

The Costs Involved in an Executive Managing Agent

The number one difference between a normal Managing Agent and an Executive Management Agent is the cost involved. Yes, most of the time owners in a complex as well as uninformed trustees expect the services of an Executive Management Agent for the price of a normal Managing Agent.

Some Managing Agents do provide extra services, but as a general rule this comes at an extra cost.

If in doubt, refer to your Managing Agent Agreement that has been signed. When you are evaluating a new Managing Agent, make sure to check the price of the additional services, as this could make a massive difference in the overall cost associated with the management of your complex.

The Moral of the Executive Management Agent

In most instances, complexes cannot afford the services of an Executive Managing Agent. That is why it is imperative to become involved in the management of the complex where you have invested your money. Choosing an almost stranger to take control of your complex, might not be in the best interest of your investment unless this company has already made a sizable investment of themselves in that complex.

Ultimately you need to equip yourself with the knowledge of the Sectional Title Act and the Sectional Title Management Act and become involved in the management of your complex. In most cases, you will have a lot more appreciation for what your Managing Agent is trying to do to look after your Sectional Title Scheme investment.

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