MANAGING agents (who have to be estate agents) are in the service industry and their business is highly labour intensive. Their extensive clerical function involves them in high overheads, not only for labour but also for maintaining office facilities.
DUTIES AND RESPONSIBILITIES
A managing agent must be capable of rendering all the services required from trustees to handle the functions and duties of the body corporate. They must have a good understanding of the act, rules and the rules applicable to the scheme, be conversant with sound and correct secretarial practice and have the necessary office staff and equipment to attend to the volumes of notices, agenda, minutes and circulars generated from this aspect of the management. Managing agents must be able to interpret and understand financial statements and compile balanced budgets, or have qualified staff to do so.
Managing agents usually have to provide four distinctly different services for their clients/bodies corporate. These are management, secretarial, financial/ accounting services and attending the numerous meetings throughout the year.
The most common administrative functions rendered are:
a) The collection of levy contributions and to exercise credit control and to prepare a monthly report for the trustees.
b) Verification and payment of accounts with the trustees' consent.
c) To operate a current and/or savings account with a bank.
d) To assist the trustees in determining the full replacement value of the building and other improvements for insurance purposes and to arrange for the valuation of the complex, including any improvements if necessary.
e) To arrange for the insurance of the complex and improvements and any other insurance the trustees may require, and to attend to insurance claims with regard to the common property.
f) To assist and advise the trustees with regard to the maintenance of the common property, to negotiate and obtain quotes on behalf of the trustees and to appoint plumbers, electricians and other contractors where necessary on the instructions of the trustees.
g) To assist the trustees in enforcing the rules of the scheme.
h) To deal with numerous telephonic queries/ complaints.
i) To report to the body corporate and all mortgagees any matter which in their opinion detrimentally effects the value or amenity of the common property and any of the sections.
The most common secretarial services include:
a) To arrange trustees meetings, special general meetings and the annual general meeting of the body corporate.
b) To attend and to take minutes at these meetings.
c) Type and circulate minutes.
d) To safeguard all documents – body corporate documents have to be saved for six years.
e) To keep address lists and registers of owners and mortgagees up to date.
f) To assist and advise members, the chairman and trustees on such matters as annual general meeting, special general meetings, quorums, proxies, resolutions, voting rights and unanimous and special resolutions, the act and the rules.
g) To examine proxies and trustee nominations and to prepare agendas, budgets and insurance schedules for the annual general meetings.
h) To prepare and serve notices for meetings and notify owners of new levy contributions.
i) To attend to correspondence from trustees, owners, banks, attorneys, insurance companies, the Receiver of Revenue and municipalities.
Common financial and accounting services are:
a) To prepare an annual budget of income and expenditure for the ensuing year for approval by the trustees.
b) To determine a monthly levy which would meet the proposed budget and have it approved by the trustees.
c) To revise the budgeted expenditure periodically throughout the year and to advise the trustees.
d) To keep a record of financial management according to generally accepted accounting practices.
e) To prepare monthly unaudited accounts of income and expenses so that the cash flow of the body corporate can be monitored by the trustees.
f) To arrange the annual audit of the accounts as required by the body corporate.
g) To exercise strict credit control and to hand over to the collection attorneys owners that are in arrears with their levies.
ATTENDING THE BODY CORPORATE MEETINGS
The professional portfolio managing agent, along with the above secretarial and administrative duties, also has to attend numerous trustees' and general meetings. Here the managing agent must have the ability to control the meetings and the various situations that may develop at these meetings.
A portfolio managing agent must be able to converse with different types of people at the meetings, be able to express himself/herself and should be able to act as a mediator/ adviser to resolve problems and disputes among owners.
At these meetings he will also advise the trustees and/or owners on the act and the rules and how they must be adhered to for different problems and situations.
These hard-working people do all the above, barring the accounting.
They usually manage on average 30 bodies corporate. That's 30 different chairmen and sets of trustees to liaise with!
Problems experienced with one body corporate is knowledge gained to solve future problems with their other bodies corporate.
Les Reynard has been a managing agent for nearly 30 years. He is a member of the National Association of Managing Agents and has been a committee member of the Sectional Title Association of PE for 28 years. Sectional title questions may be emailed to him at: Les@ReynardAgencies.com