Housing in Southern Africa September 2016

Housing

A ccording to Mandi Hanekom, Operations Manager of sec- tional title finance company Propell, “Trustees do not get paid for the hours that they put into manag- ing their scheme and often have to fit the necessary tasks into an already busy work schedule. Managing agents are experienced in dealing with all sectional title matters. If trustees decide to employ a managing agent, they must ensure that they have written contract stating all the conditions of the ap- pointment. Prescribed management rules (PMR) deal with the appointment of a managing agent, and the cancel- lation of the contract. These rules deal with authority to employ an agent, and it is up to the trustees to ensure that the contract com- plies with the rules. The term of the contract: PMR rules state that a managing agent’s contract must run for one year and is renewed auto- matically unless the body corporate When it comes to management of a sectional title scheme, the majority of trustees will do an excellent job, but it sometimes makes sense to emp l oy a managing agent. Appointing a managing agent T he giant construction com- pany, Group Five aims to be Africa’s leading infrastructure and project development, construc- tion and concession group. Group Five has set its sights on becoming Southern Africa’s leading lightweight dry building materi- als manufacturer and the leading African specialist toll motorway development, investment and op- erating company. CEO, Eric Verner, says that this strategy has boosted profits in the latest financials. “We are focused on optimising our use of capital and generating returns

or damages for loss of income. Before deciding to appoint a manag- ing agent, trustees should ascertain specifically the responsibilities of the managing agent. For example these duties could include: preparing the annual budget; preparing a schedule of insurance for the scheme; dealing with insurance claims; maintaining the common property; accounting and payment of accounts; minutes of meetings and notices to own- ers; dealing with complaints from owners, and enforcing rules of the scheme. “The key to a successful relation- ship is to find a good managing agent, one with contactable refer- ences and a good track record, to ensure the work being carried out is done by a professional. In turn, the performance of the body corporate should improve and the financial situation of the scheme will remain healthy,” says Hanekom. ■ enhancing shareholder value. Our portfolio of assets is therefore tested for its strategic fit and ability to create acceptable return on investment.” Vemer adds that the group’s over- all order book currently stands at R17,3 billion. However, building and housing revenue in the coun- try remained flat at R4,9 billion. The segment reported a 18,5% de- crease in core operating profit from R91,4 million last year to R74,5 mil- lion. This resulted in the overall core operating margin decreasing from 1,9% to 1,5%. The total secured order book stands at R5,6 billion. ■

notifies the management. There is no notice period specified and the trustees must ensure that this is included in the contract. Cancellation : the contract should include the provision to cancel the contract without notice if themanag- ing agent is found to be non-perform- ing of his duties or is in breach of the terms of the contract. The condition should state that he will have no claim against the body corporate should there be a cancellation. Revocation : there are circum- stances whereby the contract could be revoked – liquidation or busi- ness rescue of the managing agent or his company; if any member of staff have been found to have been convicted of an offense, or involved in fraud; or if the body corporate has taken a special resolution to revoke the appointment. In the last case, however, the managing agent could claim compensation on capital employed that are value- enhancing to shareholders. These results bear testimony to our strategy of investing and operating across the infrastructure value chain, which en- ables the generation of an improved blended group operatingmargin and the delivery of annuity income to deliver sustained returns. During the year, our Investments & Concessions business especially proved its value in our portfolio. As a management team, we are continually reviewing our strategy to ensure it remains rel- evant to changingmarket landscapes and client requirements, as well as

Group Five boosts earnings

September 2016