Making the decision to self-manage a complex rather than hire a managing agent can turn out to be a costly exercise.
Most of us want to save money and constantly look for ways to save the odd penny. There's absolutely nothing wrong with this. However, while cutting back may sometimes seem to make perfect financial sense, the decision might end up costing you a lot more in monetary terms in the long run.
Running a sectional title scheme for example may, at first glance, appear to be a relatively simple operation, particularly if the complex concerned is small. While there are many body corporates that run smoothly, problems can arise when the trustees either don't have the expertise to run the sectional title complex properly or perhaps even worse, don't have the financial savvy needed to keep the complex in the black. Special levies can cause havoc and finding out that such a levy is the result of bad financial planning is going to cause untold misery and anger.
The other aspect that must be considered before 'going it alone' is the dynamics of human nature. Not everyone is going to agree on certain aspects regarding the running of the scheme and this often leads to downright open warfare. A managing agent generally takes the emotion out of any situation and as such is in a much better position to advise and guide effectively.
In order to self-manage efficiently, the body corporate needs to know exactly what is required to maintain a scheme, and must have the time, knowledge, experience and resources to do so
says David Rebe, CEO of Sandak-Lewin Property Trust.
"Self-management includes keeping up-to-date with legislation, such as the Sectional Title Act and other relevant laws, maintaining the required documents (minute books, PQs, applications for extensions, etc.), remaining friendly yet professional with body corporate members, enforcing rules, as well as handling all maintenance issues.
He says that management companies provide owners with access to all the necessary resources and staff who are able to assist with queries and the management of the property as well as the necessary policies and documents including participation quotas, insurance schedules, debtor’s schedules, minute books, conduct rules, management rules etc. He adds that management companies also have an extensive list of vendors and contractors at hand.
Body corporates do not need to adopt a 'one size fits all' approach and Rebe notes that there are a many options available, particularly for those who live in smaller sectional title complexes.
An alternative option for the body corporate is a collaboration of options, whereby the administrative tasks are handled internally and, levy collections, legal issues and the handling of complaints and emergencies are outsourced to an experienced management company.
Larger body corporates may need a little more help in both the day-to-day running of the complex as well as dealing with the occupants of the scheme. However, Rebe notes that certain aspects need to be considered when hiring a management agent because the size and scale of the sectional title scheme as well as the budget available will impact the decision.
It may be advisable to do a little homework before appointing a managing agent to mange your complexes affairs. Bear in mind that managing agents need to be registered with the Estate Agency Affairs Board and have a valid fidelity fund certificate in order to operate.