- Managing agents and their employees are bound by the Sectional Titles Schemes Management Act, 2011.
- Decisions taken without trustee approval can have costly consequences for a body corporate.
- Accountability for breaches of sectional title law extends beyond trustees to managing agents and their staff.
Managing agents and their employees are bound by the Sectional Titles Schemes Management Act, 2011, in the same way trustees and body corporate members are. There are no exceptions, and any deviation from the legislation can have a ripple effect.
There was once a sectional title scheme manager who operated without the necessary permissions from the body corporate or trustees in her work. She instituted multiple body corporate levies without appropriate trustees' resolutions and would issue notices to owners without authorisation from the trustees for the same.
Bearing in mind that Prescribed Management Rule 9(b) of the Sectional Titles Schemes Management Regulations, 2016, requires that even trustees must comply with body corporate resolutions, there is no leeway for a managing agent to make decisions without the same manner of approval.
The consequences of acting without authority
When questioned on her actions by members of the body corporate, the scheme manager would claim that she did not need resolutions from the trustees to act, even though she was not appointed as an executive managing agent.
Her disregard for the required prerequisites resulted in high costs for the body corporate and multiple losses for the body corporate in court due to her negligent actions.
Ultimately, the scheme manager's trajectory led to her removal from the body corporate she worked for. Her conduct caused a serious blemish on the managing agent's financial record due to the body corporate's account, which was held in the managing agent's name, being attached by a garnishee order, reflecting poorly on the managing agent's credit record.
This whole unfolding is a reminder that property management is not something that a managing agent or its employees can just pass off and blame on a scheme's trustees when things go wrong. The position of being a managing agent requires care and due diligence.
Agents and their employees are equally accountable for their actions that breach sectional title law; otherwise, they face consequences.
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