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Should sectional title schemes be self-managed?

19 Nov 2015

While the majority of sectional title developments in South Africa are managed by professional management companies which handle day-to-day operations and necessary processes, some owners and bodies corporate choose to go the self-managed route.

Rebe says self-management includes keeping up-to-date with legislation, such as the Sectional Title Act and other necessary laws, maintaining the required documents, remaining friendly yet professional with body corporate members, enforcing rules, as well as handling all maintenance issues.

Ultimately, this decision is about finding the best fit, and whether the chosen route will maintain and improve the value of the property.

This is according to David Rebe, CEO of Sandak-Lewin Property Trust, who says while the self-management option may save money as bodies corporate won’t be required to pay a management company, they often are not aware of the energy and time needed to effectively maintain the scheme and keep the residents happy.

Rebe says bodies corporate often choose to self-manage as it is a cheaper option and offers a personal experience with property owners. However, without a management company, the body corporate needs to source relevant contractors for issues like plumbing and electrical work themselves, which takes time and a lot of effort from all parties involved.

The members of the body corporate are also sometimes not familiar with suppliers and contractors, and cannot guarantee quality workmanship.

“In order to self-manage efficiently, the body corporate needs to know exactly what is required to maintain a scheme, and must have the time, knowledge, experience and resources to do so.”

Rebe says self-management includes keeping up-to-date with legislation such as the Sectional Title Act and other necessary laws, maintaining the required documents, remaining friendly yet professional with body corporate members, enforcing rules, as well as handling all maintenance issues.

He says management companies provide owners with access to all the necessary resources and staff who are able to assist with queries and the management of the property, as well as the necessary policies and documents, including participation quotas, insurance schedules, debtor’s schedules, minute books, conduct rules, management rules and so on.

Rebe says management companies also have an extensive list of vendors and contractors at hand.

“It may not be as difficult to self-manage smaller, low maintenance developments consisting of six or less units, provided that the owners are all on good terms,” he says.

“An alternative option for the body corporate is a collaboration of options, whereby the administrative tasks are handled internally, and levy collections, legal issues and the handling of complaints and emergencies are outsourced to an experienced management company.”

He says certain aspects need to be taken into consideration when hiring a managing agent, as the size and scale of the sectional title scheme, as well as the budget available to outsource this service, will impact the decision.

Issues can become increasingly frustrating over time and takes away from other important tasks, especially if the members of the body corporate are not experts in this field, and the solution often leans towards hiring a professional who has the level of experience needed for the job.

“The benefit of making use of experienced, efficient and competent property managers is that these specialists ensure that the property investment is managed correctly, and that the property is kept in good condition at minimal cost,” says Rebe.
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