Resolving Managing Agent Contract Disputes

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This content discusses issues related to cancelling managing agent contracts, addressing scenarios where disputes arise, and highlighting common excuses used to prevent contract termination.

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Uploaded on Apr 23, 2025 | 0 Views

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Cancellation of Cancellation of the Managing the Managing Agents Contract Agents Contract By: J Wasserman

Scenario: Scenario: MY CURRENT MANAGING AGENT REFUSES TO ACCEPT THE LAWFUL TERMINATION OF THEIR Contract) . What to do

There are two ways in which to cancel a Managing Agent agreement REGARDLESS of any provision in the contract to the contrary. A Body Corporate may cancel by giving two months' written notice to the Managing Agent, provided that it has been passed at an Annual or Special MEETING RESOLUTION 75% - of members or their respective proxies has been obtained AND A SPECIAL Or By the Managing Agent on a two months notice

This is when the contract is still valid, meaning the contract has not expired. But this is not the scenario we want to discuss in depth. Myth: The Managing Agent s contract supersedes the provisions of the Sectional Titles Schemes Management Act and Prescribed Management Rule 28 and a Body Corporate IS NOT ALLOWED to terminate the agreement if there is an automatic renewal clause. Fact: WRONG! Scenario: Happy Days Body Corporate wishes to cancel the contract of its Managing Agents, which it entered into a few years ago. They then proceed to cancel the contract giving two months' notice. Crumpy Managing Agency says NO. There is a renewal clause binding the Body Corporate until the end of 2028, and you can't give two months' notice; you can only do so when it's time for renewal again. Sorry, see you in 2028. We want to discuss the matter in which the Managing Agents give the below excuses for why the contract cannot be cancelled .

Sorry, the contract cannot be cancelled as there is a renewal clause; Or We have loaned the Body Corporate money loan facility, and they must first pay it back before the contract can be cancelled. Remember, the Managing Agent will sign a contract with the Body Corporate. The loan agreement will also include a provision stating that you may not cancel the Managing Agent's services until the loan is repaid to the Managing Agent. We ask, is this provision fair?

Say, for instance, the Body Corporate took a loan from the Managing Agent. However, they are not happy with the Managing Agent's services; what then? Remember, we want to make it absolutely clear that the loan must be paid back to the Managing Agent, the body corporate cannot cancel a Managing Agents contact simply because they want to default on their obligations towards the Managing Agents and the Managing Agent is perfectly entitled to institute legal proceedings against such a Body Corporate and they However, withholding books of account and not transferring them to the newly appointed Managing Agent is not allowed in law unless we can be provided with case law stating the contrary BTW, there is none .). should! So, if you have been cancelled, how do you actually transfer the books of account you transfer them digitally, of course, and ensure you PDF them to make sure nobody tampers with your signature or places anything on your letterhead. Yes, and we know one can convert almost all PDF documents into Word; however, at least you can prove that you have transferred them PDF style; if later on somebody uses your signature and letterhead, that would be a fraud! (Thanks, Hendrik, for this practical information!) If there is a loan facility in place Managing Agents, make sure that you have signed an Acknowledgement of Debt with the Body Corporate! Why do we so often cancel a Managing Agents agreement simply because there is a clash of personalities?

If your Managing Agent is a reputable, hardworking, honest company, why cancel them simply because your personalities are different? Or, be honest, Bodies Corporates, you cancel your Managing Agents' agreement because they advise you on the provisions of the law, and you do not like that, as you are the Trustee now and you make the decisions. It's your scheme!!! What about factions between owners and even between Trustees? How can you expect the Managing Agent to take sides? The Managing Agent will never take sides; rather, they will address a letter to the entire scheme stating the facts and the circumstances. It is your legal obligation to advise members of this remember there is a risk that you will be cancelled, but at least other schemes will know you as an honest, reputable Managing Agent! But say the previous Managing Agent refuses to hand over any books of account what then?

When the Managing Agents contract has expired or is about to expire, then the Body Corporate can cancel via Ordinary Resolution (51% of members or their respective proxies) Or Body Corporate can cancel a Managing Agent's agreement that has an automatic renewal clause without being penalised or held liable for damages for early termination. Please read that again. Did we make it up? No, the law says so PMR 28(8). In the case of The Body Corporate of Brushwood v Whitfields Property Management (Pty) Ltd, the Court stated that: It is trite that under common law, a mandate is in general terminable at the will of the principal and that it is against public policy to coerce a principal into retaining an individual as an agent when he no longer wishes to have him as such . You may also apply c (1708/2021) [2022] ZAGPJHC.

MATTERS BROUGHT AGAINST MANAGING AGENTS AT THE CSOS. REMEMBER: A member of a Scheme, a Trustee or any other party CANNOT lodge a complaint against a MA (as Respondent) and not cite the BC, Trustees etc.. The Adjudicator will not grant the relief!! A Managing Agent can bring an application to CSOS on behalf of the Trustees PROVIDED there is a resolution signed authorising this!!! (2 trustees ) The Managing Agent is then duly authorised to represent the Scheme Executives .. Remember to add the applicable fee to your agreement (MA Agreement )