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Who manages a community scheme?

MAIN IMAGE: Coenie Groenewald, COO National Association of Managing Agents (NAMA)

Coenie Groenewald

It happens too often that owners and trustees stand back after appointing a managing agent for their community scheme and assume that their duties and responsibilities have ended.

Is a managing agent a property practitioner?

According to the Property Practitioners Act a property practitioner is defined as anyone who, among others, for remuneration manages a property on behalf of another. Should managing agents be included in the definition for property practitioners? This remains a much-debated subject especially concerning the role and the functions of a managing agent.

Currently managing agents are required to register with the real estate industry’s regulating body, the Estate Agency Affairs Board (EAAB) and to this end need to have a trust account which they don’t use. Managing agents are also required to complete the same training courses as estate agents for Continuous Professional Development (CPD) training – most often the content has no bearing on the management of community schemes.

Both registration with a professional body and continuous training are important but then courses should be developed that are industry specific.

This issue has already been broached with the EAAB by the industry body National Association of Managing Agents (NAMA) on numerous occasions where the regulator was made aware that NAMA has already committed to developing and provide community scheme management training. For instance, NAMA and Enterprises University of Pretoria has already collaborated to develop a three-year training course in community scheme management.

Read more: NAMA and University of Pretoria announces new introductory programme in sectional title management

It has been the view of many that a managing agent does not manage a community scheme but is appointed by means of a management agreement to render administrative, secretarial and financial assistance. The question could then be posed if it is not rather the scheme executives or trustees that manage the scheme?

What about portfolio managers?

The trustees must also take cognizance that when appointing a managing agent, they still have a fiduciary responsibility to act in the best interest of the scheme. Part of this responsibility is to ensure that the managing agent employs a competent and suitably qualified portfolio manager. The duties of the latter include but is not limited to, proper financial planning and budgeting, levy collection and insurance matters.

Should a community scheme portfolio manager then also be included in the definition for a property practitioner? That is an interesting question. There is a growing need for the professional training of portfolio managers and for a professional body to manage them. It is a scary thought that it is common practice for portfolio managers to be entrusted to manage the finances and facilitate the aforementioned services on behalf of as many as 20 community schemes in their portfolio.

To foster, promote and advance the professionalism of property management, NAMA will soon register as a professional body that can provide some form of recognition to the persons employed to manage community schemes. This will include recognition for professional training qualifications.

Visit NAMA’s website to find out more about their training programmes.

About the author: Coenie Groenewald is the Chief Operating Officer (COO) of the National Association of Managing Agents (NAMA), a voluntary, non-profit organization that promotes and advances the interests of managing agents and community scheme management in South Africa.

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