By Ané de Klerk

A managing agent is a person who delivers specific services to one or more bodies corporate. These services can be secretarial (like taking minutes at meetings), financial (like drafting budgets), administrative (like compiling and sending notices for meetings) and/or managerial in nature (managing the scheme’s gardeners and cleaning staff for example). This person could be tasked with one or many responsibilities, all of which must be set out in their written contract.

While someone in this role certainly has the potential to be invaluable to the body corporate they serve, whether or not they do so will be dependent on factors such as their skillset, expertise and experience. But what if you are unable to find a managing agent you are comfortable hiring, or if your scheme is so small that the cost of hiring a managing agent would be prohibitive?

It is important to remain mindful of the fact that the appointment of a managing agent is entirely optional. There is no default legal obligation on bodies corporate to appoint such a person. The trustees may appoint a managing agent if the majority of them regard it necessary and approve a resolution to do so; and they are obliged to appoint such a person if either a bondholder of at least 25% of the scheme’s primary sections requires this (which I have never seen in practice) or if the members are convinced that one is needed and pass an ordinary resolution authorising the appointment.

The important thing is that trustees and/or members must not be confused by these provisions and/or misinterpret them to mean that they must appoint a managing agent and have been tasked simply with authorising which one by resolution. That is not the case. The trustees and body corporate as separate groups each have the power and duty to carefully consider all the facts and then decide whether the appointment of a managing agent is in the body corporate’s best interest.

I have come across so-called “self-managed” schemes (those without managing agents) where the owners and trustees are doing spectacular work. I have also trained many such trustees and have therefore witnessed their dedication, hunger for knowledge and hands-on approach first-hand. It is in the presence of these qualities among the management team that I believe a body corporate’s success lies. Are those that manage the scheme dedicated, informed and actively engaged in the scheme? In my opinion, this is far more important than whether they wear the hat of “managing agent” or “trustee”.

If your body corporate has enough people fitting this bill, you may well be able to save on costs and manage the scheme yourself. In my opinion, the key then is to remain self-aware and know when to contact a sectional title expert for advice, as many of our self-managing clients do. If your body corporate’s trustees either don’t tick all of the aforementioned boxes or simply don’t have the time to take care of all of the many legal obligations involved in the management of the scheme without the assistance of an appointed agent (remember, trustees usually have their own full time jobs too), appointment of a suitable managing agent is something the scheme should consider.

The key takeaway is that every scheme’s unique circumstances should be carefully considered before deciding whether to exercise the option of appointing a managing agent or not. While a suitable candidate could certainly be a tremendous aid to the scheme, their appointment is not a legal obligation, but rather entirely optional.

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