Bad managing agent - what to do?

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21 Dec 2012

A Property24 reader asks:

A reader says she is a trustee and owner in a townhouse complex where the managing agent is guilty of mismanagement and dishonesty.

I am a trustee and owner of in a townhouse complex. 

The current managing agent has been managing (or lack thereof) the complex for over 6 years. With endless problems regarding security issues (armed robberies and one murder case), mismanaging and non-transparency of funds, dishonesty and deterioration of the complex etc, many owners have voiced their dissatisfaction with the current state of affairs run by our managing agent and would like to give notice and terminate the contract. 

As a trustee, I have requested a copy of the contract from the owner of our managing agent company, but he has failed to provide me with the contract copy. This only gives me an impression that the managing agent has a hidden agenda with skeletons in the cupboard and can sense that their time is up. 

Please advise on how we can proceed further as a body corporate/board of trustees. Do we need the actual contract to provide notice of termination or is there another way? 

Phil Calothi, owner and Managing Director of a leading Cape Town based managing agent company, Land and Sea Development Services (Pty) Ltd, advises:

The Act provides that, in the first instance, the Trustees may appoint a managing agent in terms of a written contract for an initial period of one year which appointment shall be automatically renewed from year to year until the trustees notify the agent to the contrary. 

Should a contract exist to the above effect, then, in order to terminate the contract, the trustees would have to formally resolve to advise the managing agent that his contract would be terminated at the end of the current financial year of the body corporate provided that the notice is given at least one month before the end of the current year. 

In the absence of a contract, I am of the opinion that notice of one month can be given at any point in time. I would, however, recommend that prior advice from an attorney should be obtained in this instance. 

In the event that the managing agent is in breach of any provisions in his contract or if he is guilty of any conduct which at common law would justify the termination of a contract between master and servant, the trustees would be in a position to cancel his contract prior to the end of the current year. 

Readers may submit questions to Property24’s Guest Expert panel and/or comment below. We may not be able to answer all questions received, but all will be considered. 

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