The role of a managing agent is not only to send statements, receive levies and ‘do the books'. The role that a managing agent fulfills is much wider than that.

A management agent should send statements, receive levies, pay accounts and prepare the financial information for a complex, but they should also be able to provide sound knowledge of the Sectional Titles Act, the Management Rules, the Conduct Rules of the complex and have access to specialists.

Although a body corporate employs a managing agent to assist the trustees, the managing agent has not authority over the body corporate and therefore cannot make any decisions. If the managing agent attempts to make decisions on behalf of the body corporate or the trustees these decisions are not binding and will have no effect.

The decision to appoint a managing agent, and the choice of managing agent is the decision of the trustees. However the majority of the owners can direct the trustees to appoint a managing agent, or specify which managing agent to appoint.

Trustees should consider a few managing agents before employing a managing agent.

Before appointing a managing agent it is necessary to check their references. If the managing agent does not offer any references in their proposal, the trustees should ask for a list of references and their contact details. The trustees should then phone the references (or a few selected at random, if there are too many).

The trustees should also confirm whether the managing agent is registered with the Estate Agency Affairs Board. They can be contacted on (011) 731-5600 or at http://www.eaab.org.za

It is important to note that the quality of service and management is not related to the size of the managing agent. There are some good large managing agents, and there are some excellent small managing agents, and there are bad managing agents of large and small.

The management contract is usually for one year, and must be signed within 30 days of appointing the managing agent.

The management contract usually expires after one year and is automatically renewed for another year, unless notice is given to the managing agent that the contract will not be renewed. The act does not specify the notice period that must be given to the managing agent, however this notice period may be included in the management contract.

The decision not to renew the management contract is usually taken by the trustees, but can be directed by the majority of the owners.

The management contract must include a statement that if the managing agent is found guilty of conduct that would normally result in the termination of the contract, then the contract is terminated. For example if the managing agent is found guilty of fraud.

The management contract can also be terminated by the body corporate passing a special resolution to that effect. However this may expose the body corporate to damages in terms of the contract.

The owners may also use Section 39(1) to direct the trustees to employ, renew or terminate the contract with the managing agent.