This is our fifth article in the series of the most popular questions we are receiving from the sectional title industry, relating to the changes in sectional title administration and management, as introduced by the Sectional Titles Schemes Management Act 8 of 2011 (“the STSMA”). In this article, we will be looking at the appointment and functions of an executive managing agent in sectional title schemes.
An executive managing agent is appointed, in terms of a management agreement, to perform the functions, and to exercise the powers, that would, in the normal course of events, be performed and exercised by the trustees nominated and elected by the members of the scheme.
It is important to note that the appointment of an executive managing agent does not negate the requirement for there to be trustees. However, due to the fact that the executive managing agent takes on the role and responsibilities of the trustees, it may not be necessary to have more than the minimum required number of trustees.
The members of the body corporate, by special resolution, may appoint an executive managing agent. Alternatively, members entitled to 25% of the total quotas of all sections within the scheme, may make an application to the Community Scheme Ombud Service, for the appointment of an executive managing agent.
Once appointed, the executive managing agent is subject to all the duties and obligations of a trustee, and is obliged to manage the scheme with the required professional level of skill and care. Failing which, the executive managing agent will be liable for any loss suffered by the body corporate due to their failure to exercise the required skill and care in its management of the scheme. As is the case with trustees, the executive managing agent has a fiduciary obligation to every member of the body corporate.
In the performance of its functions and exercising its powers, the executive managing agent must arrange for the inspection of the common property of the managed scheme at least every 6 months, and report at least every 4 months to every member of the body corporate relating to the administration of the scheme.
In its reports, the executive managing agent must report on:
- The proposed repairs to, and maintenance of, the common property;
- The matters it considers relevant to the condition of the common property;
- The balance of each of the administrative and reserve funds of the body corporate, and provide a reconciliation statement for each fund;
- The expenses of the body corporate, including the repair, maintenance and replacement costs; and
- A brief description of the date and nature of all decisions made by it.
The above report is similar in nature to the report that must be prepared and submitted by an Administrator appointed for a scheme.
Should you have any queries relating to this topic, contact us via email at consulting@paddocks.co.za or telephonically on 021 686 3950, for a non-obligation quote. Alternatively, contact us telephonically for a 10 minute telephonic consultation at a cost of R390.00 (Incl. VAT)
Article reference: Paddocks Press: Volume 12, Issue 06, Page 01.
Zerlinda van der Merwe is an admitted Attorney of the High Court, specialist Sectional Title Attorney (BA, LLB, LLM), Zerlinda brings a wealth of experience and forms part of the Paddocks Private Consulting Division.
This article is published under the Creative Commons Attribution license.
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