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Code of Conduct for Managing Agents

By Anne Granada on Sat, 17 Mar 2012 at 09:36

http://www.omniestates.co.za/downloads/NAMA_Code_Of_Conduct.pdf
I read:
National Association of Managing Agents (NAMA).
Part A: General Provisions Applicable to all Estate Agents, including Managing Agents
(Existing Code of Conduct to be revised and updated by EAAB)
Part B: Specific Provisions Applicable to Managing Agents
• Definitions

In this part of the code of conduct, unless the context indicates otherwise, –

• “managing agent” means an estate agent referred to in paragraph (a) of the definition of “estate agent” in section 1 of the Act, who renders or offers to render any management service to a management body in his or her capacity as such;

(b) “management agreement” a mandate or agreement whereby a managing agent undertakes to render any management service to a management body;

(c) “management body” means a management body as defined in regulation 1 of the regulations as published by Government Notice R ……… in Government Gazette …………… of …………. ; and

(d) “management service” means any service specified in Government Notice R ……… as published in Government Gazette …………… of …………. .

2. Application

• This part of the Code of Conduct applies only to managing agents.

• Managing agents must comply with this part of the Code of Conduct as well as Part A, insofar as any provision of Part A applies to managing agents.

• The duties imposed on managing agents by this part of the code of conduct are imposed in favour of the management body with whom the managing agent has concluded, or is about to conclude, a management agreement. No duties are imposed on managing agents by this part of the code of conduct in favour of any individual member of any management body.

3. Disclosure by managing agents

3.1 Before entering into a management agreement with a management body a managing agent must in writing disclose the following information to such management body:

• the managing agent's trade name and, in the case of a company, close corporation or trading trust, its registered name and registration number;

• the managing agent's postal and business street address, telephone number, fax number and e-mail address (if applicable);

• the date when the managing agent was established and the date it commenced trading as a managing agent;

• if the managing agent is a -

3.1.4.1 sole proprietor, his or her name and identity number, and nationality if not South African;

3.1.4.2 company, the name, business address, identity number, occupation and term of office of each director, and his or her nationality if not South African;

• close corporation, the name, business address, identity number and occupation of each member, and his or her nationality if not South African;

3.1.4.4 partnership, the name, business address, identity number and occupation of each partner, and his or her nationality if not South African;

• a trading trust, the name, business address, identity number and occupation of each trustee, and his or her nationality if not South African;

• a statement whether or not the managing agent (and/or its partners, members, shareholders, directors or trustees, as the case may be) directly or indirectly has or is about to acquire any proprietary or other personal interest in the management body concerned or the immovable property managed, controlled or administered by such management body, and, if applicable, details of any such interest;

• the total number of management bodies for whom the managing agent is currently rendering management services;

• a list of all management bodies, situated in the same municipal area as the management body to whom the disclosures in this clause are made, for whom the managing agent is currently rendering management services and for whom management services have been rendered at any time during the immediately preceding three years;

• the name and number of the managing agent's trust account kept in terms of section 32(1) of the Act, and the name and address of the bank at which the account is held;

• the name of the auditor appointed by the managing agent in terms of section 29(b) of the Act;

• details of any business activities in which the managing agent is engaged other than as a managing agent;

• the name, postal and business street address, telephone number, fax number and e-mail address (if applicable) of the person at the managing agent's offices with whom the management body is to liaise with during the period of the management agreement, should such agreement be entered into;

• the managing agent's office hours and days of the week during which it conducts business as a managing agent;

• the number of employees currently employed by the managing agent to attend to management services for management bodies situated in the same municipal area as the management body to whom the disclosures in this clause are made; and

• whether or not the managing agent is covered by insurance in terms of a professional indemnity policy in respect of its activities as a managing agent and, if so, the extent of the cover.

3.2 Before entering into a management agreement with a management body a managing agent must furnish the following documents to such management body:

• a certified copy of the fidelity fund certificate for the current year issued to such managing agent, and to each

• estate agent employed by or associated with such managing agent and assisting the latter in the rendering of management services; and

• director, in the case of a managing agent carrying on business as a company; or

• member who is an estate agent, in the case of a managing agent carrying on business as a close corporation; or

• partner, in the case of a managing agent carrying on business as a partnership; or

• trustee, in the case of a managing agent carrying on business as a trading trust;

• a concise exposition, in writing, of the management services which the managing agent offers to render to management bodies in general, and the standard fees charged in connection therewith;

• a copy of the standard management agreement (if any) normally used by the managing agent in respect of management agreements concluded with management bodies; and

• a copy of the managing agent's standard letterhead as used for business purposes in its capacity as a managing agent.

3.3 If a management agreement has been concluded with a management body, a managing agent must during the period of such management agreement -

• forthwith notify the management body if any material change occurs in any of the information furnished to such management body under regulation 3.1; and

• within the first two weeks of any new calendar year furnish the management body with a certified copy of the fidelity fund certificate for the current year issued to such managing agent and to each other person referred to in clause 3.2.1; and

4. Management agreements

• A management agreement, and any renewal or extension of a management agreement, must -

• be in writing;

• be signed by or on behalf of the managing agent and the management body;

4.1.3 state the date on which the managing agent will commence with the rendering of management services to the management body in question;

• state the date on which the agreement will terminate and/or the notice period required by either party to terminate the agreement;

• contain all the material terms of the agreement, extension or renewal as the case may be, including all stipulations and disclosures prescribed by law;

• contain a full and precise description of -

• the management service or services that the managing agent undertakes to render;

• the extent to which the managing agent is empowered by the management body to perform the said management services on behalf of and/or in the name of the management body; and

• the managing agent's powers (if any) to borrow or lend money on behalf of the management body and, if no such powers exist, a statement to that effect;

• the managing agent's duty (if any) to invest trust money as contemplated in section 32(2)(a) of the Act; and

• the person entitled to any interest earned on monies collected or received by the managing agent on the management body's behalf, while such monies are kept in trust in terms of section 32(1) or 32(2)(a) of the Act;

• the remuneration to be paid to the managing agent in respect of the management services, when such remuneration becomes payable and the manner in which it must be paid; and

• any charges that the managing agent may levy on the management body (or costs that it may recover from the management body) in respect of management services rendered to the management body, over and above the agreed remuneration.

• A management agreement must specifically state whether it is the duty of the management body or the managing agent to –

• insure, and/or keep insured, any movable and/or immovable property under the control, management or administration of the management body and, if any such duty is imposed on the managing agent, the risks to be insured against and the amount for which the insurance must be arranged;

• handle any insurance claims in respect of any movable or immovable property insured by the management body or the managing agent;

• maintain and keep in a state of proper repair any immovable property under the control, management and administration of the management body;

• comply with any notices or orders of any competent authority requiring work or repairs to be done in respect of any immovable property under the control, management and administration of the management body;

• maintain and keep in a state of proper and serviceable repair any plant, machinery, recreational facilities, fixtures and fittings, equipment and/or elevators used in connection with any immovable property under the control, management and administration of the management body;

• collect or receive levies or other contributions or monies payable to the management body by its members;

• collect or receive monies owing to the management body by any person other than a member of the management body;

• take any steps to collect from any member of the management body or other person any arrear levies, contributions or monies owing to the management body;

• recruit and/or appoint employees to perform routine maintenance and cleaning work pertaining to any immovable property (and/or any plant, machinery, recreational facilities, fixtures and fittings or equipment used in connection with any immovable property) under the control, management and administration of the management body;

• train, supervise, remunerate and discipline any of the persons employed by the management body to perform any work referred to in clause 4.2.9;

• comply with any applicable taxation and labour laws pertaining to any of the persons employed by the management body to perform any work referred to in clause 4.2.9;

• pay any accounts which the management body is legally obliged to pay;

• purchase or hire equipment to maintain any immovable property (and/or any plant, machinery, recreational facilities, fixtures and fittings or equipment used in connection with any immovable property) under the control, management and administration of the management body;

• ensure compliance with any law relating to any immovable property (and/or any plant, machinery, recreational facilities, fixtures and fittings, equipment and/or elevators used in connection with any immovable property) under the control, management and administration of the management body;

• make available to any person legally entitled thereto-

• the rules (if any) to be complied with by the members of the management body;

• the financial statements of the management body; or

• any other information or document which the management body is obliged to make available,

and, if any such duty is imposed on the managing agent, the charges to be levied by the managing agent on the person to whom the rules, financial statements, information or document is or are made available, together with a statement whether such charge is levied for the account of the managing agent or the management body;

• ensure compliance with any rules adopted by the management body to regulate the conduct of its members;

• prepare an annual budget to cover expected expenditure in respect of any immovable property (and/or any plant, machinery, recreational facilities, fixtures and fittings, equipment and/or elevators used in connection with any immovable property) under the control, management and administration of the management body;

• attend to the preparation of the management association's annual financial statements;

• convene any meetings of the members of the management body;

• render secretarial or any other services at any meetings of the members of the management body;

• convene any meetings of the management body's trustees, executive committee, board of directors or similar governing structure, and/or to render secretarial or any other services at any such meetings;

• keep and store financial and administrative records of the management body;

• supervise work of a capital nature in respect of improvements, additions or alterations to any immovable property under the control, management and administration of the management body;

• order and/or supply materials and supplies to employees who perform routine maintenance and cleaning work pertaining to any immovable property (and/or any plant, machinery, recreational facilities, fixtures and fittings or equipment used in connection with any immovable property) under the control, management and administration of the management body; and

• perform any function or duty not mentioned in clauses 4.2.1 to 4.2.24 and which is imposed on the management body by law.

4.3 A management agreement may not contain any stipulation whereby -

• the managing agent's legal liability to the management body for damages or losses arising from breach of contract or any other wrongful conduct on the part of the managing agent, is excluded, limited or restricted in any manner;

• the management body's right to cancel the management agreement by reason of the managing agent's breach of contract is wholly excluded;

• the management body waives any of its rights conferred by law or any protection afforded by the Code of Conduct;

• the management body is obliged to pay a fee or penalty when lawfully terminating the agreement;

• the management body may only amend, terminate or cancel the management agreement by a majority of more than 51% of its members in number, except in cases where such majority is prescribed by law or the constitution of the management body;

• a managing agent is given an option or other right to renew the management agreement which, if exercised, will deprive the management body of the right it would otherwise have had not to renew the agreement at the expiry thereof;

• the managing agent may in its discretion –

• deviate from any duty imposed on it by the management agreement; or

• assume any powers or functions not stated in the management agreement;

• the managing agent may charge the management body a fee in an unspecified amount for any service rendered to the management body; or

• the managing agent may without the management body's consent delegate any of the duties imposed on it in terms of the management agreement to any person other than an employee employed by the managing agent in the normal course of its business.

4.4 No managing agent may -

• render or purport to render any managing service to a management body unless it has entered into a management agreement with such management body, complying with the provisions of Part B of the Code of Conduct; or

• enter into a management agreement with a management body if it knows, or reasonably ought to know, that the management body is a party to a management agreement with another managing agent and that the management services to be rendered by it will overlap with the management services rendered or to be rendered by such other managing agent: Provided that this will not apply if the managing agents in question have agreed in writing to share such management services and a copy of such agreement has been furnished to the management body.

4.5 A managing agent must without undue delay, free of charge, furnish the management body concerned with a copy of the signed management agreement, or any extension or renewal thereof as the case may be.

5. Duty to account and report

• A managing agent must –

• keep full records in respect of the performance of the duties imposed on it in terms of a management agreement;

• upon reasonable notice allow access to the records referred to in clause 5.1.1 to any person authorized by the management body concerned;

• forthwith in writing report to the management body concerned all aspects pertaining to a management service undertaken by the managing agent, requiring the management body's special and urgent attention;

• on a monthly basis submit to the management body concerned a written report which –

5.1.4.1 sets out all income received and expenditure incurred during the month in question;

• contains copies of all accounts paid on the management body's behalf;

• states the credit/debit balance on hand in every bank account administered by the managing agent on the management body's behalf;

• discloses to the management body concerned all information and facts acquired by the managing agent during the month in question which, reasonably viewed, may be relevant to the management body in respect of its functions and duties or its relationship with the managing agent; and

• records any special instructions received from the management body during the month in question, together with details of how and to what extent those instructions were attended to.

5.2 A managing agent may not conceal or withhold from a management body any information, document or facts within its possession or knowledge which are or could reasonably be material to the management body relating to its management responsibilities or the property development scheme under its control.

6. Performance of management services

6.1 A managing agent must perform the duties imposed on it in terms of the management agreement -

• with due care and skill;

• diligently; and

• on time.

• A managing agent may not render, or purport to render, or enter into a management agreement whereby it undertakes to render, any management service to a management body if the rendering of such management service falls outside its field of competence, unless it will in the rendering of the service be assisted by a person having the required degree of skill and knowledge, and this fact is disclosed to the management body in question.

6.3 A managing agent must in the performance of any management service rendered to or on behalf of a management body comply with all applicable statutory provisions, rules, regulations and by-laws, in particular all applicable provisions contained in, and rules and regulations made under, the -

• Sectional Titles Act 95 of 1986;

• Share Blocks Control Act 59 of 1980;

• Property Time-sharing Control Act 75 of 1983;

• Housing Development Schemes for Retired Persons Act 65 of 1988;

• Companies Act 61 of 1973; or

• constitution of the management body,

as the case may be.

• A managing agent rendering management services to more than one management body

• must properly keep separate accounting records in respect of the affairs of each management body for whom management services are rendered; and

• may not transfer funds from the account of one management body to the other, whether by way of a loan or otherwise.

7. Conflict of interest

A managing agent who has concluded a management agreement with a management body must–

7.1 avoid any material conflict between its own interests and those of the management body concerned;

• before entering into any contract with a third party on the management body's behalf, notify the management body in writing of any personal interest which the managing agent (or any of its employees, directors, members, trustees or partners) directly or indirectly has in respect of the contract or such third party.

8. Duty to assign skilled staff

A managing agent must ensure that all employees assigned by it to render management services to a management body are sufficiently trained and skilled to render such services.

9. Vicarious responsibility

For the purposes of this code of conduct a managing agent who appoints or assigns an employee to assist with the rendering of management services to a management body assumes responsibility for the acts and omissions of any such employee performed by him or her in the course and within the scope of his or her employment as such.


EXPLANATORY MEMORANDUM ON THE PROPOSED CODE OF CONDUCT FOR MANAGING AGENTS

1. FUNDAMENTAL UNDERLYING PRINCIPLES

The proposed code of conduct for managing agents (“the proposed code”) rests on four main underlying principles, namely:

(a) full and proper disclosure must be made by a managing agent about its get-up and experience to enable a management body to take an informed decision whether or not to appoint the managing agent;

(b) in order to minimise disputes and conflict, a management body and a managing agent must both have certainty about the nature of their relationship and the management responsibilities to be discharged by each party;

(c) management bodies are to be protected against unscrupulous practices on the part of managing agents; and

(d) managing agents are to discharge their management functions professionally and in a responsible manner.

To this end the proposed code:

- provides for certain disclosures to be made by a managing agent to a management body before a management agreement is concluded (clause 3);

• stipulates that a management agreement must be in writing, containing certain specific terms (clause 4.1);

• requires that a management agreement clearly demarcates the management responsibilities to be discharged by the management body and the managing agent respectively (clause 4.2);

- prohibits certain unscrupulous practices on the part of managing agents (clause 4.3);

- imposes a duty on a managing agent to account and report to a management body (clause 5);

- obliges a managing agent to perform its management services with due care and skill, diligently, on time and in accordance with the law (clause 6);

- requires of a managing agent to avoid a conflict of interest (clause 7); and

- imposes a duty on a managing agent to assign skilled staff to render management services (clause 8).

2. APPLICATION OF THE PROPOSED CODE OF CONDUCT

Since all managing agents are by definition also estate agents, they must comply with all applicable provisions of the existing code of conduct, such as the duty not to act contrary to the integrity of estate agents in general; the duty to protect the interests of clients to the best of their ability; the responsibilities to be discharged in respect of the keeping of trust accounts, etc. The proposed code of conduct contains specific provisions to be complied with by managing agents only.

In terms of clause 2.3 the duties imposed on managing agents are imposed in favour of the management body with whom the managing agent has concluded a management agreement. The ethical duties under the code of conduct must therefore be discharged in favour of the management body concerned, and not individual unit owners. This means that only management bodies, and not unit owners, would be able to lodge complaints with the Board in respect of alleged contraventions of the code of conduct. A managing agent has a management agreement with the management body concerned, not individual unit owners, and it would be asking too much of the Board (and of managing agents) to react to every complaint lodged by individual unit owners. Unit owners who are aggrieved by acts or omissions of the managing agent appointed to manage their complex, must lodge their complaints with the management body concerned. It is the latter's responsibility to take up those complaints with the managing agent and to lodge a complaint with the Board in deserving instances.

3. VICARIOUS RESPONSIBILITY
In terms of clause 9 of the proposed code of conduct a managing agent assumes vicarious responsibility for the acts and omissions of its employees. This is important since most persons employed by a managing agent to perform management functions would not be employee estate agents in terms of the Estate Agency Affairs Act 112 of 1976. The Board would therefore not be empowered to take disciplinary steps against any such employee. Clause 9 of the proposed code does, however, empower the Board to call a principal managing agent to task should complaints arise relating to the conduct of an employee.
WHAT ACTION DO WE TAKE IF THE MANAGING AGENT ONLY TAKES REQUESTS FROM THE CHAIRMAN's spokesman, a director, , BOTH THE director AND THE MANAGING AGENT ENRICH THEMSELVES, LEVIES ARE SKY-HIGH SO THT THE CHAIRMAN CAN RAKE IN MONEY AND WE ARE FORCED TO APY ALL THE COSTS FOR THIS DIRECTOR? they will not reply to letters.

Replies

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RE: Code of Conduct for Managing Agents

Anne Greening replied on Sat, 17 Mar 2012 at 14:56

Hi, Katrien. This is the longest question I have ever seen on this site! If I may make a suggestion, perhaps you would receive more replies to your postings if you kept them short and simple. This is not meant as a criticism - the intent is to be helpful.

RE: Code of Conduct for Managing Agents

Nic Coertze replied on Sat, 17 Mar 2012 at 18:01

Hi,
Thanks for the information on managing agents, but the responsibilities to control the affairs of the body corporate lies with the trustees (all other owners indirectly) and not with the managing agent. Responsibilities cannot be delegated.The managing agent is merely appointed to do the work of trustees by rendering specified functions.
If you are not happy with the current situation why not exercise your right as stipulated in the act legally to get rid of those who enrich themselves

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