Can trustees appoint a managing agent without owner consent?

In community schemes, the appointment of a managing agent can spark debate, especially when owners feel they weren’t consulted or informed. We often receive queries from owners asking whether trustees are allowed to appoint a managing agent without engaging the owners.

The answer? Yes — but only if done correctly.

Let’s unpack who holds the power to appoint a managing agent, what process must be followed, and what owners can do if they believe proper procedure wasn’t observed.

Under the Sectional Titles Schemes Management Act^[1] (“the STSMA”) and Prescribed Management Rules (PMRs), trustees are empowered to appoint and contract with a managing agent to assist in the administration of the scheme.

This means they don’t need to seek prior owner approval to appoint a managing agent — unless the rules of the scheme, or the restrictions and directives given to trustees at a general meeting, say otherwise.

However, trustees must:

• Act within the authority of the scheme’s rules, restrictions and directives given to them at general meetings;
• Follow proper meeting procedures and record decisions in minutes;
• Act in the best interests of the body corporate;
• Ensure the agent’s contract reflects fair, reasonable, and lawful terms.

If those steps are followed, consultation with owners is considered good practice, but not a strict legal requirement.

Owners aren’t without power. The PMRs allow for owners, by ordinary resolution, to:

• Appoint a managing agent themselves (if one is not already appointed); or
• Remove or replace an existing managing agent, or refuse to renew the management agreement (in accordance with the terms of the management agreement).

An ordinary resolution requires a simple majority of votes (by value) at a general meeting.

This means that if owners are unhappy with how a managing agent was appointed, or with the current agent’s performance, they can take formal steps to address it — by calling for a vote for a special resolution at a general meeting to cancel the management agreement on two months’ notice.

If the managing agent was appointed:

• In contradiction to the scheme’s rules or restrictions and directives given to trustees;
• Without a proper trustee resolution;
• Without recording the decision in the minutes;
• Or if there are signs of conflict of interest or irregularities…

… then the appointment could be challenged — either internally by the owners or externally through the Community Schemes Ombud Service (CSOS), or the courts, if necessary. There may be personal delictual liability for trustees if they acted outside their powers, unofficially, and the innocent managing agent has suffered a loss (damages).

You may wish to:

• Request the minutes of the trustee meeting where the appointment was made;
• Review the contract between the body corporate and the managing agent;
• Check your scheme’s management rules for any clauses relating to appointment procedures, or take note of any general meeting minutes in which specific directions and restrictions are recorded for the trustees to comply with.

If irregularities are confirmed, owners may request the trustees to revisit the decision — or escalate it through CSOS for appropriate relief.

The managing agent plays a critical role in:

• Levy collections and budgeting;
• Coordinating maintenance and service providers;
• Ensuring compliance with the STSMA and scheme rules;
• Supporting the trustees in operational duties.

When their appointment lacks transparency or appears rushed, it can erode trust, even if legally permissible. That’s why clear, documented processes and communication with the owners are essential.

Trustees do have the authority to appoint a managing agent. But that authority must be exercised in line with the rules, recorded properly, and carried out with the scheme’s best interests in mind.

If you’re an owner unsure about how the appointment was handled, start by asking for transparency. Review the minutes. Check the rules, restrictions and directives. Raise concerns respectfully. And if necessary, take formal steps through an ordinary resolution or the CSOS, or speak to a legal practitioner.

Because while trustees may act on behalf of owners, they’re always accountable to them.

Got more questions? Our legal advisory specialists are standing by to guide you. Reach out today!

FOOTNOTES:

^[1] Act 8 of 2011.