Executive Managing Agent

With the imposition of the Sectional Titles Schemes Management Act (“STSMA), effective and signed into law on 7 October 2016 came to the uncharted territory of the “Executive Managing Agent” also commonly known as the “EMA”.

A concept which by its very nature, is still new to the industry but importantly provides for a new scheme management capability and service that covers the role of the conventional trustees.

It is trite that the conventional role of a trustee has become increasingly difficult and complicated purely because of its often thankless nature coupled with the reality of potential personal liability for Bodies Corporate matters and the result being a lack of volunteers to perform the very necessary and important function.

Recognizing these challenges, the Legislature in line with prescribed management Rule 28(1) of the STSMA provides for Bodies Corporate, by way of a special resolution, to appoint an Executive Managing Agent.

An appointed EMA is tasked with performing the functions and exercising the powers that would otherwise be performed and exercised by a board of Trustees including budgeting , levy collection procedures , conduct rule enforcement and any other tasks on behalf of other owners in a scheme.

Major benefits to appointing an EMA include complete objectivity in relation to crucial decision making as well as a convenient way for owners to avoid any difficult scenarios pertaining to their fellow owners that may involve legal proceedings , conduct rule transgressions and the like.

How will the appointment of an EMA safeguard my investment?

By law, the EMA is required to inspect the common property of the scheme at least every 6 months and provide a quarterly report to each member of the scheme.

A common misconception largely related to the abovementioned inspections and in particular maintenance related matters, is that the EMA will fulfil all the legislative requirements at their agreed fee. The EMA, however, will ensure that all legislative requirements are met through procurement of industry professionals at market related rates and exercise all of his/her powers and functions in line with the schemes budget and income in the same that conventional trustees would.

Reporting includes concluded and proposed repairs and maintenance, administrative and reserve fund financial positions, scheme expenses and maintenance costs and a brief timeline of decisions made, and accompanying actions taken.

While trustees in the normal course enjoy indemnification against any losses suffered by the Body Corporate provided their actions were not grossly negligent, the EMA does not have the luxury of such indemnification and as a result is personally liable for any losses/ damages suffered by the Body Corporate as a result of his /her conduct.

ZDFin holds personal indemnity insurance cover and is equipped to assist in furthering your schemes objectives as an EMA.

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