Should SA Managing Agents follow the NSW Strata Manager Model?
Do we expect too much from volunteer trustees?
By Jennifer Paddock
In South Africa, managing agents play a critical role in the administration of sectional title schemes. However, the powers they exercise are tightly controlled and often limited. They act on the instructions of the trustees, who are often volunteer-owners with little experience in property management or the laws related to sectional title schemes.
Compare this with the situation in New South Wales (NSW), Australia, where strata managers operate under a very different mandate. There, the governing legislation (the Strata Schemes Management Act 2015) allows for significant delegation of powers to a licensed strata manager. These powers may include the authority to raise levies, appoint contractors, take out insurance, enforce rules, approve minor works, and call meetings – all without constant recourse to the committee (board of trustees) or the owners corporation (body corporate).
In NSW, the strata manager can be delegated the functions of the chairperson, secretary, treasurer, or even the entire strata committee. Essentially, a ‘normal’ strata manager in NSW can take on the role we know of executive managing agent (EMA), without the additional appointment hurdles that come with needing a special resolution or an appointment through the Community Schemes Ombud Service (CSOS).
The NSW approach raises an important question for the South African sectional title industry:
Are we placing too much responsibility on volunteer trustees? Would a more empowered managing agent role better serve our sectional title schemes?
Before we get into more detail, it’s important to note two important distinctions:
In NSW:
- Strata managers have to be licensed under the Property and Stock Agents Act 2002. This entails meeting the “fit and proper person” criteria (i.e., police checks and character assessments), holding the appropriate qualifications, which include completing a Certificate IV in Strata Community Management, having the required relevant work experience and being registered with NSW Fair Trading.
- Reporting requirements are more stringent for ‘normal’ strata managers than ours.
These requirements empower strata managers with trust which allows owners to feel confident delegating functions that would otherwise be performed by the committee.
The South African Model: Less Empowered Managing Agents
Under the Sectional Titles Schemes Management Act 2011 and its prescribed management rules, managing agents are service providers, not decision-makers. They administer the scheme on behalf of the body corporate, but may not act without trustee or owner instructions.
The only exception is the executive managing agent model provided for in prescribed management rule 28, which allows the body corporate to appoint an EMA by special resolution or for the CSOS to order the appointment, delegating the full powers and duties of the trustees to the EMA for a specified term. However, the EMA appointment is rarely used and often misunderstood, and its suitability depends heavily on the calibre and integrity of the agent appointed.
The NSW Model: Delegated Authority with Oversight
As mentioned, NSW’s Strata Schemes Management Act allows owners corporations to formally delegate an array of specific functions to their licensed strata manager under a written agency agreement.
Importantly, this delegation of powers is negotiated and defined in the appointment agreement, with regular performance reviews and legal safeguards. The committee retains oversight, but is freed from operational micromanagement.
Where South Africa Falls Short
Despite the increasing complexity of managing sectional title schemes in South Africa, with growing legal, financial, and maintenance responsibilities, the current model still expects unpaid trustees to shoulder the burden. Trustees must approve every payment, review every contractor quote, oversee compliance and maintenance, and are often expected to respond to owner queries day and night. Burnout and disengagement are common, as is owner apathy, which can lead to poor governance and escalating disputes.
A Path Forward?
South Africa already has the legal infrastructure in place, through the executive managing agent provisions, to delegate decision-making powers to a professional. But uptake remains low.
What if we introduced a middle-ground model:
- Allowing standard, well-qualified and experienced managing agents to take on specific delegated functions (e.g., enforcing rules, signing contracts under R10,000, calling meetings),
- Under a clearly defined mandate, with annual review, and
- Subject to fiduciary and reporting obligations, akin to the NSW model?
Such a system would professionalise scheme management, reduce trustee burnout, and potentially improve compliance and service delivery, without stripping trustees of all oversight.
Conclusion
As the sectional title sector continues to grow in complexity and scale, it may be time to rethink the expectations we place on volunteer trustees. NSW’s strata manager delegation model offers a compelling case study. Perhaps South Africa’s executive managing agent model, or a tailored hybrid version, is the key to more sustainable, accountable community scheme governance.
The insights shared in this article are just a glimpse into the vital conversations shaping the future of community scheme management. We invite you to be part of the comprehensive dialogue at the Paddocks Industry Summit 2025 on July 30th and 31st, where thought leaders and practitioners will collectively address these challenges and chart a course for more effective governance
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Article reference: Paddocks Press: Volume 20, Issue 6
This article is published under the Creative Commons Attribution license.
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