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 should establish what exactly a managing agent’s job is instead of criticising how well any particular managing agent does it.
There is currently no legislation that deals specifically with managing agents, what they must do or how. For sectional title schemes, the prescribed management rules (PMRs), which are annexures to the regulations under the Sectional Titles Act, 95 of 1986 (the Act), have plenty to say about managing agents but not what they must do for schemes; rather they make provisions for how the scheme interacts with the managing agent if one is appointed. Having said that, the Act and the PMRs have a very strong influence on 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 prescribed rules provide detail of those functions and powers. One of the powers of the body corporate is to appoint agents and employees; the detail in the rule is 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. The contract lists 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. They must ensure that the managing agent performs the tasks assigned in the contract to a satisfactory standard. They have a supervisory role. So the questions that arise, such as must the managing agent enforce the rules, issue fines, enforce limitations on the number of occupants of sections, get the door of the mailbox fixed and supervise the garden service, can only be answered by reference to the scheme rules and the management contract. Which is why the contract must be so detailed!
By Anton Kelly, Paddocks
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