If you live in a sectional title scheme, you are a member of a community that has a prescribed management structure that includes a body corporate and trustees – and often a managing agent. While many people are aware of the functions of a body corporate, they are often unaware of the real value a managing agent adds to the scheme.
The first thing that is important to understand is that a managing agent does not take over the responsibilities of the body corporate or trustees. The property manager’s role is to provide expert assistance to ensure good governance. The importance of this is evident when you consider the value of the property assets involved and the financial implications for residents when their sectional title scheme is not well managed.
Top financial reasons for using a managing agent
- Effective financial management and reporting: A managing agent will ensure that an accurate budget is set for each financial year and determine the levies necessary to cover forecast expenses. However, the decision as to what the annual levies will be, still rest with the owners who will approve a recommended budget
- Processing and accounting for approved creditor payments: A managing agent will ensure that all property expenses like municipal accounts, insurance premiums, security and maintenance costs are paid on time and that all essential services paid to the scheme are not interrupted.
- Maintaining comprehensive financial records: A managing agent will maintain financial records for audit purposes at the end of the financial year and facilitate a timely and cost-effective audit process so that the AGM of the body corporate can be convened on time and conducted with all the necessary financial information
- The compilation of annual tax returns: Most managing agents have the support of professional accounting teams to take care of all the financial elements of their agreements and provide trustees with comprehensive monthly reports
- Managing the upkeep of the scheme: The value of a sectional property title’s scheme is dependent on how well it is maintained. A managing agent will ensure that the scheme is well-presented and that the property values continue to increase by scheduling approved maintenance activities, arranging quotes and facilitating completion inspections and invoice payments.
- Levy collection: Managing agents are usually responsible for distributing owner’s levy invoices and the collection of levies and service charges in line with the budget and associated levy schedule. Debt collection is another important service and managing agents are required to be registered with the Council for Debt Collectors and comply with the Debt Collector’s Act and Code of Conduct. Owners who don’t pay levies compromise the sectional property title scheme to the detriment of the other owners and it is the property manager’s role to ensure that this does not occur.
To find out more about the benefits a managing agent will bring to your sectional property title scheme, speak to our experienced property managing team today.