Who is actually responsible for managing a body corporate?

This is a question as old as the profession of property management itself. Some bodies corporate believe that by appointing a managing agent, they are handing over the management of their scheme, pretty much in its entirety, to the managing agent.

Managing agents should also be precise about the responsibilities they are taking on as well as those they are not taking on.

Poor management is often a result of a breakdown in the management structure of a scheme. In this blog, we look at the role and responsibilities of the body corporate members, the trustees and the managing agent.

The body corporate members’ responsibility

The first level of responsibility resides with the members of the body corporate. They have a responsibility to elect and appoint fit and able trustees who will act in the best interest of the scheme and its members, without prejudice or hidden agendas.

Poorly considered trustees have no knowledge of sectional title laws or no intention of making a positive difference to the affairs of the scheme. For this reason, the nomination of trustees must be well considered and their appointment must be taken very seriously by the body corporate.

The trustees’ responsibility

Trustees are elected at the annual general meeting (AGM) for the sole purpose of managing the body corporate’s affairs. This includes managing finances, appointing contractors, managing staff, enforcing the rules of the scheme and the maintenance of the common property.

In fulfilling their duties, they are obliged to adhere to the laws that govern sectional title living and to uphold the rules of the scheme. In addition, it is expected that they will act in a manner that is fair and reasonable and can never be seen to be biased towards any one party.

Unfortunately, some schemes find themselves with ineffective and disinterested trustees who neglect their duties and responsibilities to the detriment of the scheme, and who tries to pass the buck to the managing agent.

The managing agent’s responsibility

The managing agent is mainly appointed to assist the trustees with administrative duties such as levy invoicing and paying accounts. Their appointment is contractual of nature and can be terminated at any time by the trustees or members of the scheme.

Contrary to popular believe, the managing agent is not responsible for the management of the scheme, the trustees are. There are cases where the managing agent takes on more responsibility than just the administrative duties; this should be clearly laid out and listed in the contract to avoid confusion. It is up to the trustees to negotiate the terms of their working contract with the managing agent before appointing them.

The bottom line is…

The management of a body corporate is a responsibility that falls squarely on the shoulders of the trustees. The managing agent plays the role of dutiful assistant, taking their lead from the trustees and their chairperson.

With their knowledge and understanding of sectional title laws, the managing agent must guide trustees when taking decisions that will affect the scheme and its members.