Sectional Title Scheme and Managing Agents
A sectional title is the separate ownership of a unit within a complex or development. Once you purchase a unit within a complex, you as the owner, automatically form part of the body corporate of the complex. The body corporate is a legal entity that owns and controls the common property in a sectional title scheme. The body corporate regulates all the rules that the owners must adhere to.
A managing agent is a company that the body corporate hires to run the sectional title scheme on the instructions of the trustees. The managing agent is in control of the day-to-day management of the scheme and takes control of the administrative, financial and secretarial functions of the scheme. They are also there to guide the trustees and body corporate of the scheme in terms of the Sectional Title Act.
There are various reasons why it is in the best interest of the section title scheme to appoint a managing agent to perform all of the above-described duties. The managing agent company should be an independent party and should ensure that the best interest of the sectional title scheme comes first.
Furthermore, a managing agent company should ensure continuity in the sectional title scheme, even as new trustees are elected from year to year. Trustees generally perform their functions on a part-time basis, often with limited experience in the field of managing a sectional title scheme. By appointing a company, you are ensuring that a person with intimate knowledge of the act are there to advise execute crucial functions.
A managing agent will take care of the financial aspects of the sectional title scheme and can help with the financial planning of the sectional title scheme. Having a professional involved in such crucial functions can make a big difference to the overall financial health of a scheme.
When appointing a managing agent, it is very important to specify their duties and exactly what is expected of them, in the contract of appointment. Some of the duties of the managing agent is to collect levies and fees, advise the body corporate and, as mentioned above, fiscal planning. Certain duties, such as day to day maintenance, can fall under the duties of the managing agent, however, these duties are usually outsourced and done at an additional cost. Furthermore, ensure that all the trustees are satisfied with the manner in which the managing agent operates their trust account.
The relationship between the body corporate and the managing agent must be one of trust. The managing agent is there to lessen the burden on the body corporate. If you are considering hiring a trustworthy and efficient managing agent, have a look at SK Management to see what happens when an attorney and an auditor team up to provide the best possible service.