 Ladies and gentlemen, a very, very warm welcome to you to the Private Property Podcast. I'm super excited to be your guest host this evening. My name is Hettie the Entrepreneur, and I look forward to having a really great and robust conversation with you. It's going to be absolutely fantastic. So very, very warm welcome to you. We have a really interesting topic that we are chatting about this evening, and it's all about executive managing agents. Now, this is a topic that is very new within the marketplace, five years old. So we're used to managing agents, but what are executive managing agents? That is what we are going to be discussing this evening. And I'm really, really looking forward to it. So very, very warm welcome to you all. I see that we've got Mussotti that is joining us. We've got Anelda who is here. Welcome, welcome, welcome to you. Sarah, I see you. This is going to be a fantastic evening. Megan, I see you as well. So this is the Private Property Podcast that happens every single evening, Mondays to Fridays at 7 p.m. And we've got a host of other shows that air every single evening at 7 p.m. as well. So this evening, I am not alone. I am joined by Vincent Dakes, who is from Zedvin, and we're talking about executive managing agents. A very warm welcome to you, Vincent. How are you this evening? Thanks very much, Ety. Well, thanks, Anil. I'm very, very well, thank you. And I'm looking forward to the conversation that we're going to be having. I'm really looking forward to all of the knowledge that you are going to impart with us. And I think perhaps as a starting point, the first thing that I'd like to ask you, Vincent, is what exactly are executive managing agents? Perfect. So, Ety, as you alluded to, the term executive management for short EMA is quite a fairly new concept in industry. You're quite correct in that it is about five years old having come out with what we call in the sectional title space, the new act. In October 2016, effectively the legislation was changed, which encompassed quite a number of changes in the industry, but it also introduced the EMA service. So I suppose credit should go to the legislature in that sense with regards to the concept being put into play. It's a very exciting concept, I think one which despite being about five years old, a lot of people still don't actually know about. And I think a lot of the people who do know about it or who utilize EMA services will probably tell you how fantastically it works. So just briefly, an executive managing agent is effectively either a third party company or individual who refills the shoes of the trustees. Per the act, essentially you perform the functions and the powers that trustees would have. So on a day-to-day basis, anyone who lives in the scheme will understand that you've got volunteer trustees, a board of trustees, anything from two to even 10 people who volunteer their time in addition to their, you know, the general work that they do to earn a living. And they are effectively responsible for the management of the scheme. And often that goes in line with a managing agent who assists with those administrative functions. So the EMA was introduced to effectively take the roles of the trustees and it works fantastically well because you have a professional or a group of professionals in terms of a company who exercise those roles. And what you need to remember as well is that a scheme, a body corporate, whatever the case may be is made up of large asset values. And those assets need to be managed in line with the asset value. And often with volunteers running a scheme or people who are well-intentioned but don't necessarily have, you know, the knowledge, time, or capability of running the asset the way it should be. That's where you pick up problems. So yeah, it's a very exciting concept. It's one that we at ZFIN are focusing quite heavily on purely because we have the combined, or call it combined 50-year sectional title experience. So we have a lot of the know-how as to how schemes should be managed and what level of care and skill should be afforded to schemes. Absolutely, that makes a lot of sense. And I see in the comment section, we really are enjoying the knowledge that you're sharing with us this evening. Noluva, thank you so much for giving us a very nice and warm welcome. I think one thing that we definitely want priority on Vincent is does the EMA replace trustees or do they work hand in hand with trustees? So that's a very, very good question. And often one that's not really understood in industry, the EMA replaces the trustees. So you won't have your conventional trustees working hand in hand with an EMA. Although one must remember that an EMA or anyone who wants to manage something with a level of skill won't just come in and be draconian in the sense of changing things and working things as they wish, you need to bear in mind that sometimes trustees have been there for a long time and your intention is not to come in and just completely displace them and then push them to a side. They're your knowledge bank in many ways. So often what happens is trustees, as I said, are well-intentioned, but with their day jobs and then don't have the time to give the scheme the attention it deserves. So initially, you might have a phase where the EMA and trustees were quite closely in terms of what you could call a handover period. But importantly, an EMA replaces the trustees. Effectively, trustees jump out of their shoes and the EMA jumps into those shoes practically and as per what the legislation envisaged. All fantastic, thank you so much. So when it comes to a scheme, let's say for example, a building complex or for example, townhouses, how do you decide that it's now time to appoint EMAs? What are some of the signs that we should be looking for that tell us that you know what, perhaps the workload is a little bit too much for the trustees or perhaps an EMA would be better suited for that particular scheme? Yeah, I think that's quite a broad question in that there's no real right answer as to when to appoint an EMA or when you should be doing so. But I think, as an example, which would make sense to the viewers is realistically, I think if you're struggling to get volunteer trustees in a complex, so those who live in a complex will understand that you've got an AGM once a year where you need to do all sorts of administrative things. And one of those things being is appointing trustees and often you find that schemes just don't have any volunteers because people don't have the time or simply for lack of a better word, they just don't really care, which is sad in a way because as I said earlier, you're dealing with massive asset values and those need to be managed properly and guarding your investments. So I think, for example, a scheme where you don't necessarily get anyone putting up their hand to volunteer to do the day-to-day running of the scheme as a trustee would be a perfect candidate for an EMA. But on the flip side, we are EMA at a scheme of very well-run scheme in Johannesburg with money in the bank with literally no problems. But the reality is that the owners were just tired of not the owners, so the trustees were just tired of calling it a bit of infighting with other members and constantly being in the spotlight. So for them, an EMA was a fantastic choice because we've come in from an objective point of view. Decision-making is objective. Enforcing rules against fellow owners doesn't now mean that Hetty lives next door to me, but I need to effectively be the one giving Hetty a fine for whatever transpression. So that objectivity makes it a great option for schemes as well who don't necessarily need help in running their scheme, but they do need help in the sense of they just wanna get away from potential politics or whatever you wanna call it. So, yeah, there's a few options, but realistically, I think a big red flag would be a scheme that has no volunteers. Then you should definitely be looking at EMAs with the level of skill. Absolutely, and I think that third party objectivity really makes it quite attractive because I'm sure we all know of the dramatic horror stories that happen between trustees being at loggerheads. So this really sounds quite fantastic. I see within the comment section, Tiatu's asking who exactly is the boss and has the final say between trustees slash EMAs as well as managing agents. Is it more the managing agent side or would it be more on the trustee slash EMA side? That would definitely be more on the trustee slash EMA side. Remember, your managing agents are skilled people in the sense of third party companies who you employ to assist you with managing your scheme, but ultimately managing agents take instructions from trustees in the same way that if you remove the trustee and you place an EMA into the picture, the managing agent needs to effectively take instruction from the EMA. So on that point, the managing agent and a trustee relationship and that synergy is very important. And I think in our experience with the EMA problems that we manage, that synergy makes everyone's life easier in the sense that the managing agent has quick decisive, objective decision-making to deal with. We're often, and it's not trustee's fault, but like you earlier said, it could be a bit of politics between trustees. You could say X and I could say Y, which means that a decision takes a month, whereas a decision could take two days with an EMA because it literally is black and white and it's a decision that needs to be made. So trustees and EMAs most definitely give instructions to managing agents, but managing agents could have a very crucial role in the sense of advising and kind of guiding as well. All right, excellent. And then do the EMAs then engage with the managing agents directly in a similar fashion that the trustees would have done? Yes, 100%. So that relationship is very important. In fact, we meet with our portfolio managers who are part of managing agents on a monthly basis to go through certain things related to the EMA problems we manage, and purely because that relationship is very crucial. Remember, if an owner has an issue, they generally run to the managing agent, but often the managing agent in order to sort out an issue or act on an issue needs trustee instructions. So in that sense, the managing agent and portfolio manager would come to the EMA and say, this is the issue, for example, can I please have instruction? And that's pretty much the same level of communication. All right, excellent. So who then does the EMA report to? Do they come back now to the scheme to be able to give a report? How does it work in that regard? Okay, so the EMA reports to the members. Remember, buying into a body corporate, you're a unit owner, you're automatically a member of that body corporate. So maybe just to go a step back, the important thing that the legislation requires is that to appoint an EMA to manage a scheme effectively requires a special resolution, which would be a 75% vote of members. So in my opinion, which is very important because immediately what that gives is that gives only engagement, member engagement, and members are effectively making the decision to appoint an EMA. So because you've got that special resolution requirement to appoint an EMA, from the get go, effectively you answer to the members. In terms of actual reporting and so forth to members, legislation requires that EMAs do a full report to the members every four months. That report, for example, would entail cash balances, what kind of maintenance was done to the common property, et cetera, et cetera. And effectively also requires that EMAs inspect the common property once every six months, so effectively by annually. We found just being an industry and through the programs that we EMA on that we effectively do reports once a month. Purely because it just helps with the transparency and effectively means that owners are kept at least with what's going on in the same way that trustees would get monthly management accounts from a managing agent. So we've slightly differed from what the legislation says in that sense, but no harm in that if four months is a long time and a lot can happen in four months. So that effectively what is required from an EMA is to report to the members every four months via a report and it's quite a detailed report in the sense of what needs to be done and then common property inspections every six months. But like I said, we prefer to do monthlys purely because it just creates transparency and also lessens the amount of queries that owners might have at the next AGM or whatever the case may be. So yes, EMAs report to the members and in the same way that EMAs are appointed by the members, EMA can just as easily be fired by the members. So it's a member decision because ultimately the members make up about a corporate share. All right, fantastic. That really is quite interesting and definitely opens up the lines of accountability and understanding how everything is flowing which of course then brings a lot of peace of mind. All right, ladies and gentlemen, we have reached that time of the evening. It is time for our draw. Our roll over amount is 3,000 grand. Now that is definitely nothing to cease at, really good, healthy amount of money, particularly for this time of the year. So I wonder who is going to get it? Let me know in the comment section if you're excited and you're looking forward to your name appearing on the screen. Let us roll the random selector. And our winner is Portia Teckiso. Portia Teckiso is our winner this evening. Is Portia here this evening? Portia, in order to claim your prize, all you have to do is let us know that you are watching the show live within the comment section, and we will ensure that you get your 3,000 grand. Is Portia in the building? Let's wait and find out. This is really exciting, 3,000 grand. Vincent, tell me, if you won the 3,000 grand, what would you do with it? Well, Haiti, obviously December's coming up. So I think we will need a bit of leisure time after what we've been through for the last two years. So yeah, I could think of a few good things to put that 3,000 grand towards. Absolutely. It's a good time of year to be gifted 3,000 grand. I absolutely agree with you. So in terms of looking at EMAs and how they really can come on board to assist buildings, et cetera, what would you say are some of the common pros and cons of actually appointing an EMA and choosing to rather dissolve the trustees? I think the pros far outweigh the cons to be honest with you. I don't think realistically, sorry, I just lost video there. I don't think realistically, there are too many cons. In fact, I think if you're looking at an EMA service and a properly skilled EMA service, then it's a no-brainer in my opinion. But a large part of the pros, one we already discussed, would be objectivity. Because again, you're running, a lot of schemes are worth $100, $200, $300 million, depending on the size and the size of the buildings. And I ensure it for those values. So you need to be taking decisions, which are important decisions for safeguarding the value of those assets. So objectivity is most definitely one of the major pros to having an EMA and like I said earlier, that cuts out any potential politics and Haiti doesn't like me and I don't like Haiti. And therefore decisions take long to take. So those kind of things, I think. Again, trustees are often volunteers. It's a thankless job, it's a difficult job. It's generally after hours. A lot of trustees can only look at emails at six, seven at night where there might be a decision that needs to be made quite urgently during the day. But that's just unfortunately nature of the beast. So from that point of view, a big pro. And again, people often, and I think times have changed in the sense of what we've all been through in the last two years in that we're now prioritizing our time in prioritizing how we use it. So that's a definite pro in the sense of get a skilled third-party company to effectively run your asset. And if you're not happy with how they're running it, like I said, it's as easy to appoint an EMA as it is to fire one. And on the con side, it's naturally in any industry. You can hear some horror stories of, for example, body corporates that have gone into administration where administrators have run away with money and so forth. But I think a large benefit in something which the viewers potentially need to just bear in mind is that the sectional title legislation affords trustees certain indemnification, not in the case of gross negligence, but trustees are afforded indemnification for certain decisions that they may make and that they may be taken up on, where EMAs don't have that same level of indemnification in terms of the legislation. So what that means is that EMAs are effectively completely liable for the decisions that they make, which is another pro, because what that means is that, an EMA is not going to just come in, charge a fee for stepping into the role of a trustee and just simply go through the motions. You've got a job to do and it needs to get done properly. So that's another pro, as much as it's linked to a con. If you put it simply, you've got a person you're paying to do a proper job and that's what needs to be done and hence the benefit of not being exempt from an EMA point of view, as EMAs trustees are. You often find trustees not doing what they need to do and it's common in the space and they get away with it because of indemnifications and so forth, or just because people don't know that they could be taken up on it. So those are quite a few of the large pros. I think cons wise, like I said, I don't see many, to be honest. As long as you've done your due diligence, you know who you're pointing as an EMA, you've obviously done your pre checks and spoken to them and engaged with them and realized how the process is gonna work. I think there are very few cons to appointing an EMA. Absolutely, this is really such an informative conversation and private property fam, if this is information that is of interest to you, if you're finding great value in this conversation, please do let us know within the comment section. What are you learning from this conversation? What is tickling your fancy with regards to this conversation? So when it comes to EMAs Vincent and appointing them, how exactly does this go about? Do you need the trustees to actually vote them in? Do you need a majority vote? And likewise, if perhaps, we're not happy with the services they're offering, how easy is it to dissolve the EMA and bring trustees back in? So it's a good question. I think I alluded briefly to some of the, you know, workings around it earlier, but realistically, you know, if you've got trustees, for example, who are just at a point where they realize they cannot give the level of, you know, the scheme needs them in a certain way and they can't do what they need to do because of day jobs and so forth. And realistically, those trustees would probably look at a potential EMA or they might perhaps also manage an agent to advise them if they know of any EMAs. And I think this is where the conversation is good hitting the sense that I don't think many people know of the concept and understand how beneficial it can be. So hopefully these kinds of things can broaden, you know, the concept in itself. But realistically, if the trustees want to step back and get someone, like for example, the scheme I mentioned earlier in Johannesburg, which we are the EMA of, the trustees were just literally tired of doing day-to-day things and wanted someone to come in and assist them. Trustees will effectively through the managing agent take the decision to appoint an EMA to the members. And like I alluded to earlier, you will effectively need a 75% special resolution of members to appoint an EMA. That is exact same for firing an EMA. So for example, six months pass and members aren't happy with the EMA services or aren't happy with whatever the case may be. EMA can be removed again by special resolution of members. And effectively that would then take out the EMA and trustees would need to be reelected. So it's effectively the exact same procedure to hire and fire. And that's per regulation 28 of the sexual title schemes management act. So quite a fairly simple procedure in appointing and firing, for lack of a better word. But yeah, so as I said earlier, it's crucial because it gives member engagement. So members can never turn around and say they didn't know XYZ because realistically they are crucial to the appointment of an EMA in the same way that they are crucial to the firing of an EMA. Excellent. So the power at the end of the day does lie in the hands of the members, which is really, really great. This has been such a highly informative conversation. And that's why we love private property. It's because there's so much knowledge and information that we're given on a daily basis that helps us to make informed decisions that are in the best interest of our investments as well as our homes as well. Now, private property family, we want to make the circle bigger and share the knowledge and information that we have. So if there's any advice that you would give anyone or if there's any knowledge or lessons that you've learned from the private property page, all you need to do is head over to the very top pinned post on our Facebook page and share your lessons learned to your advice there as well. I see Polina and Kossi left a message to say that she's learned that you should always be available when tenants need you. Have a relationship with them and be close. That way you will learn a lot of things from them. Thank you so much Polina for sharing your insights with us. It is absolutely very, very much appreciated. Now I'm looking within the comment section to see has Porsche shown up family? Has Porsche shown up? Let me know within the comment section. Have any of you been able to tag Porsche? Is she appearing? I see that a lot of you are sharing with us what you would do with the 3000 brand. Kuzo says she'd buy a laptop on Black Friday. I see that various other people say that they would go Christmas shopping for the holidays. I love Eetu's answer who says she'd buy a few novels for the upcoming holidays. As an average reader myself, novels sound like a really fantastic idea. So that is really, really awesome. All right, so just looking at the final question for you this evening Vincent. We've spoken a lot about executive managing agents. We now understand the benefits of having an executive managing agent, particularly to relieve the stress and the drama of being a trustee and getting a really professional third party to come in. If one wants to take the next step of perhaps looking to a point one or to get further information, what would they need to do? How can Zedfin play a role in assisting them in that process? I think realistically, a large part of the time, trustees or ever looking to EMA services likely go through their managing agent. We obviously managing agents have know-how of the industry and who's involved and who could potentially help. So a lot of our involvement on an EMA space and assisting body corporates spaces is through the managing agents. But realistically, anyone can get in touch with us. We will obviously do kind of not a background check on the scheme, but in line with what the current trustees find out as much as we can in terms of what's required and where the gaps are. And we're probably the most leaders in terms of our assistance. And then realistically, that's quite a streamlined process in the sense of it starts with that quote because obviously there's a fee related to appointing an EMA service and then engagements with the trustees. We've in fact, just to give you an example of how these things work, we've just had one now where effectively we've had three separate meetings with the current trustees and chairperson. And those meetings were crucial in the sense of understanding what they need from us and for us to understand what they need to better run the scheme and to better guard the asset value. And those conversations have been great. And effectively, it means that we've got off on the right foot in that there's already a relationship with the outgoing trustees. So anyone looking for the assistance of an EMA can gladly get in contact with us at Zedfin and realistically approach the managing agents in the sense that most schemes do in fact have managing agents. So a lot of schemes are self-run, but yeah, those are pretty much the gateway. So contact us directly or perhaps you're a managing agent or get into to advise on who can potentially assist them with EMA services. Excellent. Thank you very much, Vincent. This has been highly informative. We really appreciate the knowledge and insights that you shared with us this evening. Ladies and gentlemen, if you're interested in learning more about executive managing agents, then be sure to contact Zedfin and they would be more than happy to assist you and guide you in the process. Well, this brings us to the end of the show and Portia has not claimed the 3,000 rand. That means we have another rollover to 3,500 rand. So that is bad luck for Portia, but it could potentially be good luck for you. Perhaps you will be the winner of the rollover of 3,500 rand. In order to find out, make sure that you show up here for the private property podcast show tomorrow at 7 p.m. In order to find out if you are the winner. Thank you so much for joining us this evening. I hope that you have thoroughly enjoyed it and do stay tuned for 8 p.m. where Mvali Norku is going to be coming with the farming podcast. On that particular note, my name is Heti, the entrepreneur and I have thoroughly enjoyed being your guest host for this evening. Have a fantastic evening. Good night.