 Hello, private property family. Rupert Ilea Mulrini, good evening, and welcome to the show. For our new friends who are probably thinking they are in the wrong podcast, don't worry, you are not lost. For those who know me, of course, my name is Martha Shingange, and I'm one of the top friend gang members who keep the private property streets very busy with our comments and our questions. It really is only such a pleasure for me to guest host the show. As you know, Zama is getting some education, so she's away on Thursdays, and we are really looking forward to her coming back with some of the learnings. And of course, she's preparing herself to make some boss moves. So a big shout out to our entire social media fam. I know my crew on Facebook are doing the most. I was on YouTube last night for the podcast to see how things are going on that side of the neighborhood. It was rather too quiet until I learned that everyone is now gathering here on Facebook. And of course, it's because of the competition that we have going on. And of course, we're also on Instagram, so whichever platform you are connecting from this evening, welcome, welcome. Now, fam, as you know, that private property brings us great shows every weekday at 7 or 12, and again at 8 p.m. So if you are in the market for a new property or you just want to admire some of the most beautiful and luxurious properties in South Africa, you can catch the home buyer's show with Chad on Mondays and Fridays, right after this podcast. And for those with green fingers or are interested in agriculture and farming, Bali is on your screens on Tuesdays and Thursdays. You will never know, you might just start your own veggie garden with six garlic plants like I did. Yeah, there's only just six of them. Small beginnings, fam, small beginnings. And of course, if you need some inspiration or want to hear how others have started on their property investment journeys, the first time home buyer's show is on Wednesdays with AST. And believe me, there's no way that you wouldn't want to start something after watching that show. So do catch them on Wednesdays. Fam, how awesome is it that private property has extended the competition? They are really pushing the envelope while giving more fans the opportunity to get some cash. And of course, you know about the competition that has been running for a few weeks now. And now the new goal is to get to 20,000 comments and 10,000 shares. And remember that all you need to do to enter into the drone is to share our Facebook page. You can write a review, you can comment on the pinned post on Facebook. So don't forget the major words that you need to use. And that is hashtag one million followers, hashtag 20,000 comments and hashtag 10,000 shares. As I always say, impossible is nothing. Let's do it, fam. And you would note that our biggest winner so far has walked away with a whole 4,500 rent. And this evening, the money bag is back at 500 rents after Seleni, who is one of the top fans, took the price of 1,500 rents last night. So do stay tuned because we will be revealing tonight's winner a bit later in the show. Remember, you have to be watching the podcast live to claim your prize. Now, first things first, let's take some valuable notes. I know I'm ready with my notebook and my pen ready for this evening's show. Now, this evening, our guest is Leanne Harrison and she is the portfolio manager at RPA Property Administrators. And of course, we're talking about managing agents in community schemes. This topic, honestly, is really something that is very close to my heart because my smalling and portfolio of properties are all sitting in sectional title. So I really am looking forward to this. So welcome, Leanne. Welcome to the show. Thank you so much, Martha. I'm happy to be here. I really appreciate it. Great stuff. How are you doing this evening? Very well. Thank you. And yourself? I'm awesome. I'm awesome. Thank you so much for really taking the time to be with us to talk about the issue of managing agents. They are the glue, if you can call them, the glue that holds the body corporates together, right? Yeah, I think as we were speaking earlier, a lot of the times, owners and trustees don't know what we actually do behind the scenes. So this is about creating awareness as to what a day in the life of a managing agent, what we do every day, what you don't see us doing and to realize that we don't only manage one scheme, we manage a portfolio generally. Yeah, absolutely. So yeah, I'm excited about it. So let's really just find out what value you are actually bringing. Before we get to that Leanne, I think maybe let's start with a little bit of education because you have your sectional title schemes and you also have your home owners association, right? So can we just explain to us as to what are these two different schemes and how are they different from each other? Thanks, Martha. So the biggest difference and the most sort of common difference is a sectional title scheme is your complex where there's different units on either individually or top of each other in a building. And your home owners association is where it's an individual urban and usually a small estate or the like. That's a massive difference. And the other big difference is what they are, the legislation or the rules they are bound by. The sectional title scheme is bound by the sectional title scheme management act and other legislation. And then your home owners association is bound by the constitution that they incorporate when the home owners association gets created. So those are the major differences when it comes to the two. And I think a lot of the times that does the lines get blurred a bit because you'll find someone whose own sectional title or purchase in an HLA and they would think that the same rules apply when they were living in a sectional title scheme and isn't the case. So whenever I always say whenever you're purchasing in either always look to see and what rules apply because for me that's probably the biggest difference. It's generally very different sometimes the same but there's always different rules applicable. Okay, great for that explanation. So you are looking at an estate right where you might have different complexes. So those are now sectional title schemes but in the bigger scheme of things if my understanding is correct you can also then all of those schemes the smaller ones, the smaller complexes they now form what you will then called the home owners association, right? That manages the entire estate. So you call that probably a property owners association. So there'll be five or six schemes within a PAA a property owners association. And then you look at the role of the property owners association which is just to manage the common area for those body corporates. And within those body corporates then you have specific rules that apply to discussing body corporate itself. So definitely very common as well. You get bigger, bigger estates where you've got smaller body corporates inside. You also get estates where it's body corporates and they've got individual urban as well within that PAA as well. I think that sums it up quite nicely. Let me take a bit of time just to say a few shout outs to some of our fans. I can see we've got Michelle Volmerans. I've seen happiness, Martina Manoleca. I see in learning Kuta. So it's really quite hitting up there in the comment section. All of our fans are really just having a great time interacting and sending a lot of love. They're sending us green hearts and just welcoming you as well to the show. So now that we understand the structures that actually exist in these properties can we delve into the roles of the managing agent which is probably the biggest part of our discussion this evening. Yes, thank you Martha. So I like to split it up into three categories. Mainly administrative, financial and compliance. And generally when we're dealing with trustees and owners they only really see the administrative side. Behind the scenes it's the financial aspect and then also the compliance aspect which is very important because behind the scenes we're the ones that are insuring that the body corporate or the HRA is compliant with all legislation, any other regulations that they are bound by even their own rules. So I like to break it up into those three categories. And that's quite important because you play a very important role when it comes to supporting the body corporate. Because there's quite a lot of rules that govern how sectional titles are ran and all of that. So maybe can you just get into what probably happens on a day to day basis? The behind the scenes like you're saying it's quite administratively heavy. I know I am a chairperson of the trustees body corporate. So I know there's quite a lot of like the invoices that are coming in every now and then. Please approve this, please approve that. Someone has beaten, someone's dog has beaten somebody. And a whole lot of things of those are even bombarded with things that you're not even sure whether that is actually your responsibility. What goes on behind the scenes? So I'll run you through a typical day which I'm actually gonna run you through what I did today. So I get to work generally before we start. So I can get a handle on my emails especially because a lot of the times a lot of our queries on the administrative side is via email from our owners, trustees, contractors, other service providers. So, you know, we've got to manage that and prioritize what's important on a daily basis. You know, I had a site inspection this morning at nine o'clock with a security company. So on that aspect, I'm managing the service provider. You know, there was site inspection to see, you know, where are the gaps in the security. So as a managing agent or a portfolio manager for the specific body corporate, my job is to ensure that the security is functioning correctly at any site at any given time. So we had a meeting with the security because we had a few concerns. So that's one aspect. We then discussed the financial aspect. So in this instance, we looked at, you know, what are you paying us? What are we paying you every month and what value can you add? So in that way, I'm helping the body corporate manage their funds as well. And that way also ties them with their budget. So on any given day, any given month, you know, for us as managing agents have to ensure that the budget that we prepare for the body corporate is being utilized correctly. We're collecting levies, so then paying service providers and contractors, that's one aspect. And I got back to the office and then you have the owner or trustee queries. And it can be anything from, you know, levy queries, if an owner is querying interest charged or the, again, there's an issue with the rule, infringement of the conduct rules, then my job is to ensure that whatever rule is being breached, I advise the trustees thereof, they instruct me as to what we should do. I first advise them that, okay, let's say for instance, refuse is being disposed of incorrectly. I tell the trustees, they instruct me to send out a warning letter or issue a fine whenever the rules may state. And, you know, then next thing, you know, we look at, we run meetings weekly, daily. So I had to review some financial statements. So in that way, when I'm looking at the budget, the next aspect is looking at the financial statements, seeing at their time with the budget, advising trustees why they are variances. We budgeted 5,000 rand for cleaning, but we spent 10,000. I have to answer to them as to why we spend so much. Why is there a variance? What the reason for that was. And as a good portfolio manager or managing agent, you should be able to tell your trustees and your owners why there's a variance, why we spent for money on X, Y and Z. So there's another financial asset we have to deal with. On the other side, we're dealing with compliance. So making sure that the body corporate is compliant in terms of any income tax regulations, any tax we have to pay, any compliance with, you know, insurance, making sure the body corporate is insured correctly. We deal with the brokers on that aspect. So that's definitely a typical day. Everything is mostly behind the scenes and we deal with our trustees and owners once or twice, but the race is purely behind the scenes. Wow, it sounds like a very, very busy day and you're probably a hundred in one because it's compliance, it's administrative. I'm really interested in what qualifications would one need to be a portfolio manager because you are just doing a whole lot of things. And obviously you need to know your way around the relevant rules, the legal aspect of things because you've got the important role of actually advising the body corporate, which is quite huge because now the body corporate is actually relying on you to ensure that they are doing things the right way. So that is quite hectic. So, but before we continue, Leanne, we have to go for a short break because we need to reveal tonight's winner of the 500 Rends Cash Prize. I know our random picker is on now and this evening we are saying congratulations to... Let's find out who is walking away with the 500 Rends this evening. Who is it going to be? Is someone going to take it? Is it going to be a roll over? Let's find out. And the winner is Zintle Lirato Nolo. You have until the end of the show to raise your hand and claim the prize. Congratulations, Zintle Lirato. Guys, please combine Zintle Lirato with love until she reveals herself on the comment section. Well done and congratulations. Now, Leanne, let's get back to it. We're just talking about the role that you play as a managing agent. Now, let's look at how should body corporates or trustees oversee the work that a managing agent does to make sure that they have got all their aspects covered to make sure that you are actually doing the right thing. What should we be looking out for? Thank you, Martha. So, generally what I like to start off with is always work back with your management agreement you have with the managing agent to see what the actual mandate is. A lot of the times the managing agent has a specific role to play and the management agreement will then prescribe those functions. And I think it's important for trustees when they take over as trustee or they become a trustee of a body corporate to understand that they take on a massive responsibility. So if I do show you duty in terms of the applicable legislation and it's not only about letting the managing agent just run wild and make all the rules and enforce the rules, it's about it's a collaborative process whereby we work together on a daily basis or whatever the case may be, we have trustee meetings. I need to tell you that, okay, the rules say X how do you think we should go about it? Or we've received three quotations for the replacement of a gate. Who do you think is the best service provider? I mean, for my experience I can tell you that contractor A, I work with them quite a bit. Maybe you work with contractor B and it's about working together to find solutions for the body corporate so that they can run properly. The managing agent's role sometimes is a bit more labor intensive but that is why you appoint us for that position and you pay us a monthly fee so we can advise you correctly. But when I say that I also state that trustees should make sure that when they're taking on this responsibility they know exactly what's going into it. They should be able to understand that when we submit financial statements, don't just sign them because you're signing something and if you don't understand what you're signing you shouldn't be signing it. So it's important that you have a good relationship with your managing agent in terms of all the functions they or all the roles they fulfill that you have understanding as well because ultimately you're answering to the owners you are appointed by the owners to manage it along with the managing agent. And I think that's quite important that at the end of the day body corporates are actually or rather the trustees are accountable to the body corporate. So it's also important that they rather the body corporate ensures that they have appointed people who have some kind of a skill because you need to know what are the things that you should be looking out for probably some basic financial management corporate governance because it all just really comes together at the end of the day. So now how do we what must we look out for in terms of getting a good managing agent? So now we just want to appoint a new managing agent. What are some of those key things that we should look out for? If the body corporate or HRA is looking at appointing a managing agent or looking at changing managing agents it's always important to highlight what do you think you are lacking in a managing agent or what you feel that isn't happening for you and then make sure that that is what you advise a new managing agent. But for me look out for a company that the good references a good portfolio manager generally isn't overloaded with too many buildings. So for me it's about 15 to 20 to 25 buildings. If you go over 25 buildings as a managing agent or portfolio manager managed in 25 it becomes a conveyor belt situation where we're not actually providing a service or we're not adding value and generally cost is always an issue because at the end of the day how much can the body corporate afford and also the resources that a managing agent can provide. So it's myself you know my team is not only me I brought myself it's good that a portfolio manager has an assistant or somebody working with them past their accounts team now you've got an accountant that's joining that's busy helping you a creditors clock, a jitters clock what's the team that supports the portfolio manager at the end of the day because you want a managing agent with the best possible resources so that the body corporate can function properly with that. That's so it's quite important that you ensure that you get value for the money that you are actually paying. Yeah, that's quite interesting and I like the fact that you are talking about the number of buildings that they actually should you know the cap that you must be looking out for because some of these games are quite huge and you ask yourself how is the managing agent actually managing with all the issues that come in from just one building so I can only imagine now when it's all these issues coming from every angle must be quite interesting I see there's quite a lot of love in the comments section we are still trying to find Zintle I hope we are really going to find her before the end of the show because we are slowly but wrapping up and so please let us know if we are finding Zintle we really, really need to find her so that she can claim her prize otherwise it's a roll over to tomorrow. So Leanne, let's maybe take a few questions now and I really have to throw this one in. Can body corporates run their schemes without a managing agent and what would be the pros and cons of doing that? Thanks Martha, a very good question and very applicable you know a lot of the times now especially with body corporates at the end of the day when you're collecting levies to pay your expenses of the running of the body corporates and one of them is a managing agent's fee so it's an important consideration where a lot of body corporates decided okay we're going to run it ourselves and save some money and yes that's possible you can do it unfortunately the problem comes in that any managing agent even you know myself and the company that I work for our resources allow us to ensure compliance with all relevant legislation including financial aspects and if you're a body corporate where you want to run it yourself that's perfect but it comes down to do you have the resources to do so and a typical example would be levy collection so the act requires that there's a separate bank account for the body corporates and there's specific requirements for insurance to cover any loss of funds so in that instance when a group of trustees are wanting to establish or manage the body corporate themselves they have to ensure they've got that in place how the levy is not collected how are they raised have they got a system in place to send levy statements up on a monthly basis have they got a separate bank account opened who's going to reconcile the bank account at the end of every month who is going to collect levy arrears or follow up on arrear levies because that'll ultimately affect your cash flow which affects payment to service providers so it's about the resources that the body corporate has at their disposal and the pro of having a managing agent is that we have those resources behind us and if you've got a group of five trustees who already have their most likely day jobs or they are fully employed to manage that as well could be quite time consuming and also it might end up I've seen it where the non-compliance comes in where they don't have the necessary insurance in place for the bank account but they haven't got the necessary insurance specifically for the body corporate they haven't received the necessary advice that a managing agent could give them in terms of who to appoint, et cetera so it's definitely about resources and a managing agent can provide that as opposed to self-managed scheme I think we've got a good business case for body corporates not to try and cut the corners and save the money because really I mean there's also the sectional Titles Act that they need to comply with and it's quite extensive in terms of their requirements so if our fans who are watching they are part of body corporates and they have been thinking how we can save it back and try and do it ourselves I don't think you might want to do that unless there's probably just two buildings there but yeah, it is quite intensive it sounds very, very intensive so Femm, I'm not sure it doesn't look like Zindle has shown herself it looks like we might be holding over that 500 rents to tomorrow just the last one from my side, Eliane and really this has been a very insightful discussion what would you say are some of the common challenges that body corporates encounter as they manage their managing agents? Thanks, Martha so I actually made a note here and I've always tried to live by this now as managing agents we have to we always tend to over promise under deliver not myself specifically but when it comes to response times on queries transparency on financials that is what makes a good managing agent if you are able to answer something or at least provide a quick response time on a question it creates confidence in the managing agent and if a managing agent isn't providing you with a feedback I require in terms of where the levies are going, what they're being spent on not answering a query on a rule for instance what led to me wait seven days it's something that makes an unsatisfied client so I think it's all about when we promise something to one of our trustees or one of our owners it's important that we deliver on that promise whether it be something small or something big because I see it as for those owners now it's your property it's something that you've invested in so you want the best value for what you are paying the managing agent so for me I think it's different a quick response time and if that's a problem then you have to highlight it to a managing agent and transparency on every aspect of running on the body corporate transparency is very important and we see it a lot when we myself when we take over and other buildings and I'll give you an example today we took over, I've taken on a new building in the CBD and the main issue for the trustees was lack of transparency and no responses on their queries so it makes them, then there's no confidence in what the managing agent is doing and you've appointed me to run your scheme ultimately for you and that confidence has to be present or else that communicate or that break down or that lack of trust if it's broken down then the relationship isn't going to work No, that's absolutely true because it's a relationship that we need to manage but at the end of the day the managing agent needs to understand that the body corporate is actually paying for a service and most of the time the service doesn't come cheap so they really need to get the best value for that kind of investment so I think those are quite important issues that we should be looking for transparency, your integrity, communication because we are interesting with the whole bank account with all of our ladies in there and sometimes it can really go up to millions so it really is quite important that we manage a good relationship between the two parties at the end, I think we are much wiser this evening thanks to all the insights that you have really shared thank you so much really for being with us I really appreciate that you took the time to just come and educate us and just engage with us and share your knowledge about how we can better manage our managing agents but also just to understand what role that you play in helping us to manage our investments thank you so very much, I really appreciate it Thank you Martha, lovely being on the show and I look forward to further evenings with you Absolutely, I think we do need a follow up because it looks like there's quite a lot that we can cover on this one subject alone thank you so much Leanne Thank you Thank you and that of course was Leanne Harrison who is the portfolio manager at RPA Property Administrators chatting to us this evening about the role of managing agents and I now have to laugh and leave you it doesn't look like Zindle has claimed her price so tomorrow the price will roll over to 1,000 rents so summer is back tomorrow evening so for me and the entire private property team it's good night, loads of green hearts are your way Michele, please stay safe, good night