Recognising the value of managing agents: 6 ways to advance the profession
1 September 2023 | Hendrik Hoffmann
Managing agents play a vital role in this industry, yet their profession is often undervalued and overlooked. Their daily responsibilities include handling client disputes, addressing trustee requests (often beyond their scope), attending numerous meetings after hours and, quite honestly, anything their trustees throw at them, provided it is legal of course.
When I first entered the industry in 2007, the average management fee was R69.00 per unit. However, in Pretoria, where I am based, there has been a long-standing issue of undercharging. It is both surprising and concerning to recognise that even after 16 years, our current fee stands at R95.00 per unit. Taking inflation into consideration, it becomes clear that the average management fee should be no less than R170.00 per unit.
This situation has resulted in managing agents experiencing a serious decline in economic growth, as their workload and compliance requirements continue to increase. Consequently, if management fees were to suddenly increase to match the necessary amount, it would potentially bankrupt many schemes. Therefore, my recommendation for a viable solution would be to introduce charges for additional work that goes beyond the standard services provided 16 years ago.
Unfortunately, in the majority of instances, the compensation received does not reflect the level of service provided.
In this article, I would like to shed light on the challenges faced by managing agents and propose steps to enhance the profession, thereby encouraging agents to recognise their true worth and clients to appreciate the value they bring.
Embracing a Professional Mindset: Managing agents should adopt a professional approach to their work. This entails considering the principles followed by other respected professions and implementing them within the industry. I have listed a few examples:
Scheduling meetings during office hours: Holding meetings during office hours can alleviate the strain on managing agents. Just as one would visit a doctor during work hours, quarterly trustee meetings and the annual general meeting could be organized within the standard workday. With sufficient notice, owners can arrange to leave work a bit earlier on these occasions. This will only be required a few times a year, whereas the managing has to attend after hour meetings on a daily basis.
Charging for After-Hour Meetings: One particular area that warrants attention is the issue of after-hour meetings. It is essential to question why it has become the norm for managing agents to be expected to attend (on average) four after-hour meetings, per scheme managed, without compensation. Such a practice not only fails to acknowledge their time and dedication, but also undermines the value they bring to the table.
Just as other professionals charge for their services outside regular working hours, managing agents should be fairly compensated for their commitment to attending these meetings too. It is imperative that clients and trustees recognise the importance of compensating managing agents for their time and expertise, fostering a more equitable and respectful professional environment.
After-hour meetings should also have a predefined cut-off time, regardless of whether the business of the meeting has been concluded or not, and managing agents should be excused by 19:00. This acknowledges the importance of work-life balance and further promotes the idea that a managing agent’s time is just as valuable as any other professional person providing a service to the scheme.
Leveraging Online Meeting Platforms: In line with the "new normal," utilising online meeting platforms can simplify scheduling and reduce travel time. Similarly to other professions, managing agents should charge a callout fee for off-site meetings, or conduct meetings at their office if suitable facilities are available.
Fair Compensation for Emergency Availability: While professionals are typically available after hours for emergencies, it is reasonable to charge for such services. Just as attorneys charge for after-hour instructions, managing agents should be compensated for responding to urgent matters late at night or over weekends.
More often than not such emergencies can easily be resolved by the trustees without the managing agent simply acting as the middleman.
Fair Reimbursement for Travel Expenses: Reimbursing managing agents for travel expenses, including both day and night travel, is essential. Current rates should be based on industry standards, such as the AA rates, rather than undervaluing their time and effort.
Recognising the Effort in Providing Information: Managing agents are responsible for supplying trustees with monthly financials, legal reports, and other relevant documents. However, it is important for trustees to disseminate and comprehend the information provided. To address any additional breakdowns, interpretation of information or resending, managing agents should charge a reasonable fee, similar to when a doctor issues a new prescription.
The field of managing agents has evolved with the complexity of sectional title legislation, requiring years of experience to excel in the role. However, the fees received often fail to reflect the investment made in this career. It is crucial for trustees to recognise the value of managing agents and the importance of fair compensation.
By professionalising the industry and charging accordingly, managing agents can attain the recognition they deserve. It is only through collective acknowledgment of their worth that the dream of professionalisation, and fair compensation, can become a reality.
Should you require any more information regarding this topic, don’t hesitate to contact us today on 061 536 3138 or at info@tvdmconsultants.com
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About the Author
Upon completion of his BCom degree in Business Management at the University of Pretoria, Hendrik embarked on a career in the Sectional Title Industry. With more than ten years of experience under his belt, he recognized a pressing need for enhanced transparency, streamlined processes, and superior service through the incorporation of technology. This prompted him to establish Rise Property Solutions in 2018.
Hendrik’s extensive knowledge and proficiency in Sectional Title matters have earned him invitations to numerous radio shows, where he has served as a valuable guest speaker. He has also established the largest Facebook Group in South Africa dedicated to Sectional Title Living, further cementing his reputation as a leading Managing Agent in the industry.