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Body Corporate Admin

By Cal S on Sun, 04 Mar 2012 at 13:40

Over the last few years we have been through numerous Managing Agents from the big guys to one man shows. In all cases we have been left either disillusioned or blatantly left in the dark by their reporting and management. It seems managing agents (at least in our case) want to be authoritarians over schemes they manage, ignore the instruction of trustees and generally fail to meet reporting standards necessary to effectively manage complexes. In an attempt to correct this, the trustees took over the financial admin function and are now able to extract monthly management reports, identify trends and budget more effectively going forward.
Of course this work takes time and it is felt that the trustee responsible should be rewarded. Would it be better for the trustee to remain in that relationship, resign and become the administrator (all funds banked into BC account, trustees other than the reporting party responsible for payments). Surely as a mere admin staff member she is not required to be a MA or registered with the EAAB?
If she remains a trustee, do the trustees deliberate on remuneration, or does it need to be tabled at a GM?

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RE: Body Corporate Admin

Camelot Windsor replied on Sun, 04 Mar 2012 at 16:48

A common trend, unfortunately. You are not required to be registered for in-house, self-management. However, the Act states that trustees receive no remuneration. However, in a self-managed complex, the administration trustee or Trustee Administrator often receives their levy credit as remuneration. I administer our bank account but we have an excellent managing agent now. I am the building caretaker, the financial director and the managing director, but I am the only resident male Trustee in the building; it suits me and it suits our owners. I have been in this position for six successive years.

RE: Body Corporate Admin

Myburgh Brink replied on Sun, 04 Mar 2012 at 19:12

The only way a trustee can be remunerated is by a special resolution of the members (PMR 10). To give a trustee a levy credit is highly questionable if not illegal – but then there are schemes which are not run "by the book".

To have a trustee (chairman) in charge of all/ most of the management aspects in a scheme is also not the most desirable situation (I speak from personal experience of such a situation). There should be a clear distinction between those who manage and those who perform the day-to-day admin. Such a person should be seen as an employee of the BC and a proper contract should be drawn up specifying her/his duties. ...Show More

RE: RE: Body Corporate Admin

Anne Greening replied on Mon, 05 Mar 2012 at 09:57

Hi, Cal. For some years, one of our Trustees has carried out the functions of a bookkeeper. She works regular office hours, and (as approved by a special resolution of the BC) she is paid a salary. This has worked out very well for us.

RE: Body Corporate Admin

Cal S replied on Mon, 05 Mar 2012 at 15:53

To clarify, this function is record keeping and communications and the trustee is not the chairperson or alternate. All payment delegations are linked through different trustees, with expense authorisation by another set. We have more than sufficient corporate governance regarding the control of funds and strictly follow the act relating to decisions taken by the board, even the the point where any issue directly affecting only some trustees directly sees them abstain from voting on the matter.
We understand that trustees are able to administer the functions of the BC, but have concerns that if the person (who has her own accounting practice) were to resign as trustee and take on an administrative function replacing the managing agent (this was the only function entrusted to our former managing agent) that she may be required to be a registered managing agent.
My understanding is that provided she is not collecting levies, she does not fall into the definition of managing agent, but rather administrator.

RE: RE: Body Corporate Admin

Anne Greening replied on Mon, 05 Mar 2012 at 16:20

Hi, Cal. I see no problem with this, provided that the payment of a salary is approved by a special resolution of the BC. As mentioned earlier, it will be necessary to have a proper contract of employment; and to meet the UIF and Income Tax requirements.

RE: Body Corporate Admin

Cal S replied on Mon, 05 Mar 2012 at 16:23

Thanks Anne, but per my second comment, the individual has her own practice, so we would be looking to contract her in that capacity to maintain our accounting records, not as an employee. We are not registered as employees and would prefer to remain that way using contractors instead.

RE: RE: Body Corporate Admin

Anne Greening replied on Tue, 06 Mar 2012 at 12:29

This becomes more complicated. I'd prefer someone else to comment.

RE: Body Corporate Admin

Myburgh Brink replied on Tue, 06 Mar 2012 at 14:12

Something about your post puzzles me. Who does the cleaning of the building/common property? You say you are not registered as an employer so therefore you do not have cleaning staff and the owners are doing all the cleaning and refuse removal from the sections (???). If this is Not the case and you do have someone who does the cleaning I assume that person(s) gets paid and by not being registered as an employer you who be contravening Labour legislation, Tax legislation (whether the person pays tax or not), Unemployment legislation and possibly a few more pieces of legislation.

To get back to your Admin lady. If she has her own practice then the practice should be contracted and NOT the lady personally other it could be agued she is an employee of the scheme. A proper contract should be in place setting out all functions. Be careful of saying you prefer using contractors as they are normally "employed" for a specific task (e.g. a plumber, electrician or builder) and when the job is finished they issue an invoice and move on to the next job. Someone doing admin work usually does this for an extended time and SARS frowns on this practice as it is quite often used by individuals as a form of tax evasion by saying they are private contractors. A directive was issued by SARS covering this practice a while ago. If you do a search on the SARS website for "contractors" you will find some interesting reading on the topic.

RE: RE: Body Corporate Admin

Camelot Windsor replied on Tue, 06 Mar 2012 at 16:13

Myburgh, how do the principles displayed in your text affect a non-SA Citizen (Malawian) here with a residence & work permit who does "piece work" for us on a Saturday? He works on the CP as a gardener, cleans up, sweeps, waters plants, cuts back overhangs where necessary, etc. I would not regard him as an employee on which to pay UIF or PAYE as the amount we pay him to do this work is way less than the tax threshold. Also, he works less than 24 hours a week and therefore no UIF is required.

RE: Body Corporate Admin

Myburgh Brink replied on Tue, 06 Mar 2012 at 21:10

I am neither a registered tax consultant nor practitioner so I can only refer you to the SARS website to read the info on "part-time" employees.

I think it was in the 2009 Budget speech where the minister said ALL types of employees whether they are liable for tax or not had to be registered to get a tax number (if I remember correctly this had to be done by August 2010). The reasoning behind it was that people were doing work all over the place and each time their remuneration was below the threshold, so they were never caught in the tax net. In some instances a single person would earn in excess of R300k per annum and not pay a cent in tax. So your Malawian employee, being here legally with a work permit, could be earning a fortune and not pay tax. ...Show More

RE: RE: Body Corporate Admin

Camelot Windsor replied on Wed, 07 Mar 2012 at 00:17

Thank you, Myburgh, but I am not a tax-dodger, as you call it. I am fully legal and above board.

RE: Body Corporate Admin

Cal S replied on Wed, 07 Mar 2012 at 11:45

Myburgh, you have strayed completely off topic with your replies. The questions related to the EAAB requirements and those of the Sectiona Title's Act, not taxation and labour relations issues, both of which I am apply competent to deal with.
This is a large complex of well over 100 units sitting on several acres of property. Our cleaning and gardening staff compliment consist of 4 full time individuals on week days, 2 over the weekends and 8 on cutting days. The entire function is outsourced to a gardening and cleaning company so that they can effectively rotate staff to meet our needs and the applicable labour regulations. Employing the number of people needed ourselves would not be viable or manageable if we were to comply with labour legislation and would require that we have an in-house supervisor too. The costs of self employing would be higher than outsourcing.
Our guarding services are similarly outsourced for compliance with the PSIRA, allowing us to rely on CONTRACTED services for all our employment needs.
Your assessment of contractors is equally incorrect. I act as a contractor (in administrative terms) to large businesses for extended terms up to 60 months at a time. I am a third party to them and do not fall under their HR departments as I do not work on their premises, under their control or exclusively for them.
Ian, the law regards all "domestic" workers as employees, and you are obliged to register him for UIF and provide pension to him. Check with your local SARS office for assistance in meeting these requirements.

RE: RE: Body Corporate Admin

Camelot Windsor replied on Wed, 07 Mar 2012 at 14:40

Cal, while this continues to be OFF TOPIC, I am NOT obliged to register him for UIF, PAYE or pension. He is a temporary labourer who works less than 24 hours a month, is a foreign national on a residence permit, and is paid cash for his time. There are no laws controlling this, unless you can provide the links so I can look it up. I cannot find anything that supports your argument.

RE: RE: RE: Body Corporate Admin

Rob Ross replied on Mon, 19 Mar 2012 at 04:02

So that was a needless thread hijack Ian, you already knew the answer to your off-topic question.

FYI, his nationality, amount of income and method of payment have nothing to do with his employment status....Show More

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