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Best Business Practice

By Belinda Swart on Mon, 19 Mar 2012 at 11:18

Our chairperson has individual access to the bank account (which is monitored) however, now wants to become the managing agent of the complex.

I am concerned that this is not best practice, and two main issues involved are risk and conflict of interest.

I need to get best practice or principles of management in sectional title information speedily.
any suggestions?

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RE: Best Business Practice

Myburgh Brink replied on Mon, 19 Mar 2012 at 11:57

The MA is appointed either by the TRUSTEES (majority decision) or the owners at a general meeting (PMR 46 (1)). If it is a trustee appointment the chairman would not have a vote on the decision as he would have a direct interest in the decision (PMR 23). §40 also covers the fiduciary relationship of trustees.

As the MA can be seen as an "employee" of the BC how can the chairman be both employer and employee? If he does not conform to his mandate, who is going to take the required steps to sort it out? If he so badly wants the job he should resign not only as chairman but also as trustee. Unfortunately there in nothing in the STA to enforce this, but for the sake of transparency and "arms-length- transactions" this would in my opinion be the way forward.

RE: RE: Best Business Practice

Gerhard Bezuidenhout replied on Mon, 19 Mar 2012 at 12:15

Agreed.
Also - what does it entail to have \"individual access\" to the bank account? Instruments must be signed by two trustees and in some defined cases by a trustee and the MA.
To become the MA your chairman will have to register as an estate agent and obtain a fidelity certificate.
Maybe, by working his way through the ethics, he will realise in his best interest to resign as trustee after he\'s decided what he really wants to be...

RE: RE: RE: Best Business Practice

Camelot Windsor replied on Mon, 19 Mar 2012 at 16:02

Myburgh, not necessarily. In house administration requires no such EAAB certification nor fidelity certificate - ask Anne Greening. Perhaps it's better for the complex to seek EAAB Registration and Fidelity Certificate, but it's not required for in house administration.

RE: RE: RE: RE: Best Business Practice

Gerhard Bezuidenhout replied on Mon, 19 Mar 2012 at 17:22

Hi - you are right, of course. However, note that no one mentioned in house administration per se...

RE: RE: RE: RE: RE: Best Business Practice

Camelot Windsor replied on Mon, 19 Mar 2012 at 17:32

Gerhard, "Our chairperson has individual access to the bank account ... now wants to become the managing agent of the complex". That is in-house management.

I am a trustee, we have 5, I have exclusive access to the bank account (administrator of the account) but we also have an external managing agent. I do not have the time nor the expertise to take on the enormous role of a managing agent.

RE: RE: RE: RE: RE: Best Business Practice

Belinda Swart replied on Mon, 19 Mar 2012 at 18:06

Thank you for your input Gerhard. You are right this is not inhouse administration, therefore I think your assessment is correct. thank you Ian for your replies, with each I learn a little more!

RE: RE: Best Business Practice

Belinda Swart replied on Mon, 19 Mar 2012 at 12:26

Thank you Myburgh. this is exactly the information I need. What is PMR23 and §40 where the fiduciary relationship of trustees is outlined _ where do I get direct access to this information.

I so appreciate your explation as this gives me the confidence I need to continue. ...Show More

RE: Best Business Practice

Myburgh Brink replied on Mon, 19 Mar 2012 at 12:37

Hi Belinda
Click on "browse library" in the menu, this will take you to the page where you can get access to both the Act (§40) and Rules (PMR 23).

RE: RE: Best Business Practice

Belinda Swart replied on Mon, 19 Mar 2012 at 12:52

Thanks again. much appreciated. I found the Act and downloaded it. Will look for PMR also.
regards
Belinda

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