Trustees or Managing Agent: Who Is Actually Responsible for What?
Understanding the distinction between trustees and managing agents is essential for effective governance. It helps owners know where to direct concerns, reduces unrealistic expectations and ensures accountability remains where the law intends it to be.
PPSP Team
Professional Property Solutions Provider
01
Sound Familiar?
I’ve reported the leaking roof three times to the managing agent. Why hasn’t it been fixed?
The trustees keep asking owners for approval. Isn’t that the managing agent’s job?
These are among the most common frustrations in sectional title schemes, and they usually arise from a simple misunderstanding: many owners are unclear about who makes decisions, who performs the work and who is ultimately accountable when things go wrong.
02
The Short Answer
- Trustees govern, make decisions and carry legal responsibility
- Managing agents provide professional administration and implement those decisions
- Owners elect trustees and retain decision-making powers on matters reserved for members of the body corporate
Understanding these roles helps prevent confusion and allows owners to hold the correct people accountable when issues arise.
03
How a Sectional Title Scheme Is Governed
Every sectional title scheme operates through three key groups:
Owners
Owners collectively form the body corporate and exercise certain powers through Annual General Meetings (AGMs) and general meetings.
Trustees
Trustees are elected by owners to manage and govern the scheme on behalf of the body corporate.
Managing Agent
The managing agent is a professional service provider appointed by the body corporate to assist the trustees with administration, financial management and operational matters.
Each plays a distinct role, and many disputes arise when those roles are misunderstood.
04
The Role of Owners
Every owner automatically becomes a member of the body corporate when purchasing a section within a scheme.
Although owners do not normally manage the day-to-day affairs of the scheme, they retain important governance powers.
Owners generally:
- Elect trustees
- Vote at AGMs and general meetings
- Consider annual financial statements
- Review and approve budgets
- Vote on management and conduct rule amendments
- Approve matters requiring ordinary, special or unanimous resolutions
- Hold trustees accountable for their performance
Trustees govern the scheme, but they do so on behalf of the owners.
05
What Trustees Are Responsible For
In terms of the Sectional Titles Schemes Management Act 8 of 2011 (STSMA) and Prescribed Management Rule (PMR) 9, trustees exercise the powers and perform the functions of the body corporate, except where legislation, the rules or valid owner resolutions require decisions to be made directly by members.
Trustees therefore carry significant governance and fiduciary responsibilities.
Their fundamental role is to make decisions and oversee the affairs of the scheme.
Financial Management
Trustees are responsible for overseeing the financial affairs of the body corporate. This includes:
- Preparing annual budgets
- Reviewing financial statements
- Monitoring income and expenditure
- Managing reserve fund planning
- Reviewing arrears reports
- Ensuring levies are collected
- Maintaining financial sustainability
Although a managing agent may perform much of the administration, trustees remain responsible for financial oversight.
Maintenance and Repairs
Trustees must ensure that common property is properly maintained. Their responsibilities include:
- Approving maintenance projects
- Prioritising repairs
- Reviewing contractor quotations
- Implementing the Maintenance, Repair and Replacement (MRR) Plan
- Managing maintenance budgets
For example: a managing agent may obtain quotations for roof repairs, but trustees generally decide which quotation to accept and whether the work should proceed.
Governance and Compliance
Trustees are responsible for ensuring compliance with:
- The STSMA
- The Prescribed Management Rules
- Registered scheme rules
- Applicable legal and regulatory requirements
This includes:
- Enforcing conduct and management rules
- Maintaining governance documentation
- Ensuring meetings are properly convened
- Keeping accurate records
- Implementing valid resolutions
Insurance and Risk Management
Trustees must ensure that appropriate insurance is maintained for the scheme. This typically includes:
- Building insurance
- Fidelity insurance
- Public liability insurance where appropriate
- Other scheme-specific cover
Managing agents often obtain quotations and assist with claims, but trustees remain responsible for ensuring that suitable cover exists.
Levy Collection and Arrears
Trustees must take reasonable steps to recover outstanding levies. Their responsibilities include:
- Monitoring arrears
- Approving collection processes
- Reviewing payment arrangements
- Authorising legal proceedings where necessary
Failure to manage arrears effectively can have serious consequences for the financial health of the scheme.
Read more: What Happens When an Owner Falls Into Levy Arrears?.
06
Trustees Have Fiduciary Duties
One of the most important aspects of trusteeship is the fiduciary obligation imposed by Section 8 of the STSMA.
Trustees must:
- Act honestly
- Act in good faith
- Avoid material conflicts of interest
- Exercise reasonable care and diligence
- Act in the best interests of the body corporate
- Exercise their powers only for proper purposes
Trustees who breach these fiduciary obligations may be held liable to the body corporate for losses suffered or benefits improperly obtained as a result of that breach.
These duties cannot simply be delegated to a managing agent.
Even where a managing agent performs administrative functions, trustees remain accountable for governance and oversight.
Read more: Trustee Duties and Liabilities: What You’re Signing Up For.
07
What a Managing Agent Is Responsible For
A managing agent is a professional service provider appointed by the body corporate.
Their authority comes primarily from:
- The management agreement
- Instructions received from the trustees
- Applicable legislation
Managing agents provide expertise and administration, but they do not generally replace trustees as decision-makers.
Financial Administration
Managing agents commonly assist with:
- Levy billing
- Allocation of owner payments
- Creditor payments
- Bank reconciliations
- Financial reporting
- Accounting records
- Liaison with auditors and accountants
These functions support the trustees in managing the scheme’s finances.
Maintenance Administration
Managing agents often:
- Obtain quotations
- Liaise with contractors
- Schedule inspections
- Arrange maintenance visits
- Coordinate approved projects
- Monitor contractor progress
However, they do not ordinarily decide whether maintenance work should proceed unless specific authority has been delegated.
The decision-making responsibility generally remains with the trustees.
Meeting Administration
Managing agents frequently:
- Prepare meeting notices
- Compile agendas
- Distribute meeting documentation
- Attend meetings
- Record minutes
- Maintain governance records
These functions assist trustees in fulfilling their statutory obligations.
Communication With Owners
Managing agents often act as the first point of contact for:
- Maintenance concerns
- Levy queries
- Administrative requests
- Rule-related questions
This does not mean they are authorised to make governance decisions independently. Many matters still require trustee approval before action can be taken.
Read more: Delegating to a Managing Agent: What Trustees Can and Can’t Outsource.
08
The Difference Between Decision-Making and Administration
A simple way to understand the distinction is:
Trustees
- Decide
- Approve
- Govern
- Authorise
- Remain accountable
Managing Agents
- Implement
- Coordinate
- Administer
- Communicate
- Report
Trustees govern the scheme. Managing agents support the governance process.
09
The Exception: Executive Managing Agents
There is one important exception to the ordinary governance structure.
In terms of PMR 28, members may appoint an Executive Managing Agent by special resolution. Members holding at least 25% of the total participation quotas may also apply to the Community Schemes Ombud Service (CSOS) for such an appointment.
Unlike an ordinary managing agent, an Executive Managing Agent may assume many of the powers and functions ordinarily exercised by trustees.
An Executive Managing Agent:
- Performs trustee functions
- Is subject to the same duties and obligations as a trustee
- Owes fiduciary duties to the body corporate and its members
- Must manage the scheme with professional skill and care
- Must inspect common property at least every six months
- Must report to members at least every four months on the administration of the scheme
The reports must include information regarding:
- Proposed repairs and maintenance
- The condition of common property and scheme assets
- Administrative and reserve fund balances
- Expenditure incurred by the body corporate
Executive Managing Agents are relatively uncommon but may be appropriate where specialised management is required.
10
Who Does What? At a Glance
Budgeting
Maintenance
Levy Collection
Rule Enforcement
Insurance
Meetings
11
Getting the Most Out of the Relationship
The most successful schemes have a strong working relationship between trustees and the managing agent.
Best practice includes:
- Clearly defining responsibilities in the management agreement
- Maintaining written instructions and approvals
- Setting service standards and response times
- Reviewing managing agent performance annually
- Ensuring trustees receive regular reporting
- Holding trustees accountable for governance outcomes
When everyone understands their role, communication improves and problems are resolved more efficiently.
12
Questions Owners Should Ask
If you are unsure who should deal with a specific issue, ask:
- Does this require a trustee decision?
- Has the managing agent been instructed?
- Has expenditure been authorised?
- Who approved the action?
- What does the management agreement provide?
These questions often clarify responsibility very quickly.
13
Frequently Asked Questions
If the managing agent fails to act, who is ultimately responsible?
The trustees. While managing agents perform many administrative functions, trustees remain responsible for oversight and governance.
Can a managing agent approve major expenditure?
Generally not, unless specific authority has been delegated through the management agreement or a trustee resolution.
Who decides whether repairs should proceed?
Trustees generally make that decision. The managing agent assists by obtaining quotations and coordinating contractors.
Can owners instruct the managing agent directly?
Owners can report issues and request assistance, but the managing agent typically acts under the authority of the trustees.
What is the difference between a managing agent and an Executive Managing Agent?
A managing agent provides administrative support. An Executive Managing Agent may assume many powers and functions ordinarily exercised by trustees.
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Conclusion
One of the most important principles of sectional title governance is understanding who is responsible for what.
Trustees govern, make decisions and remain accountable to owners. Managing agents provide professional expertise, administration and operational support. Owners elect trustees, approve key decisions and exercise oversight through participation in meetings.
When each party understands their role, communication improves, accountability becomes clearer and schemes operate more efficiently.
A well-managed sectional title scheme depends on owners, trustees and managing agents working together within the framework established by the Sectional Titles Schemes Management Act and the Prescribed Management Rules.
Clear Roles, Better Governance
PPSP supports trustees with clear reporting, written approvals and defined service standards, so everyone knows who is responsible for what.
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