• Find out who the trustees of a few other schemes in your area are. Ask them what their experience is and if they can recommend a good managing agent.• If you have a particular managing agent in mind, ask them for the contact details of other schemes they manage. If they have a sound record, they will be only too happy to provide a list.• Check that the managing agent has a valid Estate Agency Affairs Board fidelity fund certificate. It’s not necessary for each individual at the agency to be registered, just the principal. Almost all managing agents collect levies and are therefore legally bound to register with the EAAB so that their clients’ money is protected by the EAAB Fidelity Fund when deposited to their trust account.• Check that the agency has its own professional indemnity and fidelity insurance. Any managing agency with a genuine concern for the welfare of its clients will ensure that it and those it employs are covered by policies that cater for losses caused by mistakes and by rogue employees who steal client funds. In this regard, bear in mind that the cover provided by the EAAB’s fidelity fund is only for money stolen from the managing agent’s trust account. In practice it takes many years for these claims to be settled, during which time the scheme is left short of the stolen funds.• Ask whether the managing agent is involved in other property management related businesses, for example, building maintenance, garden service, insurance brokerage, levy finance and debt collection. Your scheme could become a captive market at less than favourable rates.
Article reference: Paddocks Press: Volume 8, Issue 2, Page 1
Anton Kelly is the course convener of the University of Cape Town (Law@Work) Sectional Title Scheme Management course. Next course starts, 7 June 2013. For more information please contact Emma on 021 447 4130 or firstname.lastname@example.org.