The distinction between the role of the Managing Agent and the scheme executives in the management of a community scheme is often misunderstood by scheme executives and members alike. This article highlights the responsibility for the management of a community scheme by the elected scheme executives, even when the Community Scheme executives may have appointed a Managing Agent to provide administration services.
When things in a community scheme go wrong, and scheme executives are not seen to be taking proactive steps to resolve an issue to the liking of residents, it is often the Managing Agent that is faced with an upset resident, with the accusation that the Managing Agent is not doing their job in managing the scheme properly.
Scheme executives are the legislated elected body that is responsible for the good governance of a scheme and the enforcement of the rules of the scheme.
However, it needs to be understood by residents and owners alike, that scheme executives as are elected by the members, are performing a voluntary role and as such may use the Managing Agent as a “buffer” between their personal lives and that of the day-to-day requirements of running and managing a community scheme by the scheme executives.
It is often the decision of the scheme executive to require from owners that any issues raised are done through the Managing Agent. The MA then passes on such issues to the scheme executives for their processing and action. The Managing Agent has no legislative powers in a community scheme and is purely a service provider providing agreed administrative services in terms of a contract.
The prescribed duties of scheme executives are applicable to all community schemes, as defined in section 1 of the CSOS Act for any scheme where there is shared use of, and responsibility for parts of land and buildings. These duties as listed in the CSOS Act should be read in conjunction with the applicable legislation and governance requirements for the type of community scheme, and include:
The compulsory requirement to prepare for and attend all scheme executive meetings and general meetings of the scheme. The executive may be excused by the chair of board on furnishing a reasonable excuse for not being able to attend such a meeting. Meetings should be planned well in advance so scheme executives can plan their diaries accordingly.
The scheme executives must take reasonable steps to inform and educate themselves about the scheme, its affairs and activities, and the various governance documents including state legislation and amended rules applicable to the scheme.
The scheme executive must also ensure that prior to any meeting, and before they make any decisions, that they have taken reasonable steps to obtain sufficient information and advice relating to any matter due to be decided on and which they would be required to make a conscientious and informed decisions in their capacity as a scheme executive. They must further exercise an active and independent opinion in respect to these decisions, not influenced by any other member of the scheme executive.
Scheme executives in addition, also have fiduciary obligations in terms of common law or any applicable statute
A Managing Agent is employed by a scheme to perform mainly administrative functions in accordance with an agreed service level agreement. The scheme executives decide on the level of involvement and functions of the Managing Agent in providing specified management services to a community scheme.
For instance, maintenance of the common property and arranging for contractors to perform such maintenance may be a scheme executive role that is not part of the service package agreed to with the Managing Agent by the scheme executives. In such a case the Managing Agent has no control over the appointment or performance of a contractor, how and when they carry out their functions or how their employees behave. This is the responsibility of the scheme executive in charge of maintenance, and the scheme executive must give direction and provide procedures to be followed by each contractor appointed to work in a community scheme.
The Managing Agent ensures that contractors are paid by the Community Scheme on approval and instruction by the scheme executive.
Any issues that an owner in a community scheme has with the contractors working in their scheme, must be addressed to the scheme executive in writing and emailed through to the Managing Agent, who will pass on the correspondence to the trustees for their consideration and response.
Owners may use Whitfields as the “post box service” to pass on their issues with contractors to the scheme executives, and Whitfields will pass back to the owner the response from the executives. Whitfields however has no control over the timeline for responses to such concerns raised by an owner, but will always ensure that any advice given, to either scheme executives or owners, complies with the governing legislation for the scheme and the CSOS Act.
Whitfields will provide support in whatever way it can, in assisting scheme executives and residents residing in the community schemes that we manage, along this road of compliance with legislation governing peaceful dispute resolution in the community schemes we manage.
