Just what are the duties of managing agents?

Private Property South Africa

Like so many other South Africans, I live in a complex. While there are benefits to living in such developments, there are also negatives which, if not properly dealt with, can quickly snowball and become problematic for those who live there.

After a number of issues arose at our complex which I felt weren’t properly dealt with by the managing agent, I felt it was high time that I establish exactly what it is that managing agents are actually supposed to do.

Anton Kelly, an HOA and sectional title expert for sectional title and home owners’ association firm Paddocks, unpacked the matter in a way which makes it clear that such matters aren’t as clean cut as they may initially appear.

Says Kelly: “Managing agents get a lot of criticism from owners. No doubt some is justified – we all make mistakes and sometimes have gaps in our expert knowledge. To manage owners’ expectations of what their managing agent should be doing and how, we need to first establish what exactly a managing agent’s job is instead of criticising how well any particular managing agent does it.”

According to Kelly, there is currently no legislation that deals specifically with managing agents, what they must do or how. For sectional title schemes, there are prescribed management rules (PMRs), which are annexures to the regulations under the Sectional Titles Act, 95 of 1986 (the Act). Although the PMRs provide information about managing agents, they do not state what managing agents must do for schemes. Rather, Kelly says they make provisions for how the scheme interacts with the managing agent if one is appointed.

Having said that, Kelly says the Act and the PMRs strongly influence the managing agent’s duties because managing agents are appointed to perform functions of the trustees and those functions are very specifically legislated.

The Act lays out the functions of the body corporate in section 37 and its powers in section 38. Section 39 provides that trustees perform those functions and exercise those powers. The PMRs provide the details of those functions and powers.

“One of the powers of the body corporate is to appoint agents and employees. The rule outlines that the trustees may appoint an agent in connection with the powers and duties of the body corporate. PMR 46 says that the appointment must be made in terms of a written contract. The duties of managing agents are therefore based on contract, not legislation and the contract should list in detail the duties the trustees want the managing agent to perform.

“As an aside, it is worth noting that although the trustees may appoint an agent to perform some or all of their legislated tasks, they cannot delegate their responsibility and fiduciary duty in respect of those tasks. The trustees must ensure that the managing agent performs the tasks assigned in the contract to a satisfactory standard.

“So, when there is doubt as to whether or not the managing agent must tackle issues such as rule enforcement, fines, occupation limitations and garden supervision, the scheme rules and management contract must be referenced which is why the contract must be as detailed as possible.”

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