Advancing Standards: The Quest For Professionalism in Community Schemes Management

Elevating the professional status of our industry demands a robust framework. Such a framework must be built on a uniform standard of education, and will require not only technical skills and experience from those tasked with managing schemes, but also an ethical and standards-based commitment from the industry as a whole, which should be embodied through a comprehensive code of conduct and a backed by a functioning professional body with the competence to ensure the enforcement of such a code and its standards.

Going back to basics to build a solid foundation for professionalism

But where do we start, in pioneering greater professionalism in the community schemes management industry? Achieving such a lofty goal might seem overwhelming, but when we break it down into practical, manageable steps and go back to the fundamentals, the desire to improve our industry as a whole provides the momentum necessary to start.

Plotting out a course to professionalism: facing the future, starting today

Every journey to greatness begins with a single step, and here are ten of the first steps that we need to be taking, collectively:

Every journey to greatness begins with a single step, and here are ten of the first steps that we need to be taking, collectively:

1.  Standardising education and certification of managing agents:

It is essential to establish a well-structured training curriculum for community scheme managers that covers diverse aspects such as financial management, property law, building and maintenance skills, labour law, occupational health and safety law, insurance law, conflict resolution and so forth, at a graduate standard. This curriculum should culminate in a professional certification after serving a learnership of two years by sitting for an admission exam that evidences the necessary practical knowledge and skills, in order to guarantee the expertise of the manager in community scheme operations.

2. Implementing a license to practice and appointing a body to govern:

A licensing system should be put in place, not one that falls under the scope of the Estate Agency Profession, but a distinct profession that stands with its own requirements and standards. Under such a system, only those who are certified can practice as community scheme managers. This will build credibility for practitioners and reinforce a professional image for the industry.

Realistically speaking, it is unlikely that either the PPRA or CSOS is the correct body for this enormous task, given that the PPRA’s focus has traditionally been – when it was still the EAAB or its successor – on estate agents. They have failed the industry on so many occasions through a lack of insight and understanding into the differences between MAs and estate agents. Furthermore, the CSOS can not function as both the regulator and the impartial adjudicator of disputes, and then still act as the court of first instance for collections, in addition to performing as their own appellate division. While the CSOS wants to be everything to everybody, that simply dilutes their authority and effectiveness. There needs to be a stronger division of powers in order to create the necessary checks and balances to uphold the standards we put in place for our industry.

3. Crafting a code of ethics and professional conduct:

It is critical to develop a code of ethics and conduct that aligns with international best practices while being fine-tuned for local South African nuances. This code should govern the behaviour of professionals in the industry and provide guidelines for addressing issues such as corruption, conflicts of interest, while promoting transparency, communication, and ethical handling of money belonging to schemes, and should tackle pressing issues such as the banning of secret commissions, and sharing of invoices of other service providers, for example.

4. Appointing a fit-for-purpose, custom regulatory body:

Establishing a regulatory body to oversee industry operations is paramount. This body must be vested with powers to certify, license and discipline its members in cases of misconduct. It should also be responsible for updating industry standards and practices as necessitated by trends and technologies, to ensure the relevance and effectiveness of the industry as a whole.

Creating such a governing entity will allow the CSOS to focus on serving as a genuine Ombud, and acting purely as intervening body when the public is not satisfied with the outcome lodged at the Regulatory Body, instead of diluting its mandate.

5. Continuing Professional Development (CPD):

Encouraging lifelong learning and professional growth through mandatory CPD milestone points, which can be earned through webinars, workshops, seminars, and other educational activities. Fortunately, in the aftermath of Covid-19, industry leaders have become more amenable to providing webinars on a regular basis with content aimed at improving knowledge, sharing expertise and guidance for exploring new fields of development, such as the solar conundrum currently perplexing the industry.  Discussing these issues by engaging different role players can drastically improve the general understanding of the issues, giving clear insight into why it is necessary to act only once we have a clear plan in place, and not before.

6. Enhancing and nurturing cross-industry collaboration:

The accounting, legal and engineering professions along with the construction and trade industries need to collaborate and work together to improve standards in general.  MAs should be encouraged to join relevant industry associations in order to promote networking, boost cooperation and enable mutual learning between peers. Ultimately, this will strengthen the voice of the industry in policy making and advocacy spaces, when it comes to regulation and lawmaking.

7. Raising public awareness and speaking up for legislative change:

Running public awareness campaigns about what professional community scheme management should entail, is pivotal to raising the bar on professionalism. Such campaigns should address topics such as, for example, the importance of open and transparent accounting, the risks of pooled or trust accounting, and tackle conflict resolution in schemes while highlighting owner rights and obligations in schemes, as well as the necessity to pay their levies. This helps to promote the industry and its benefits, both to participants and to potential clients.

Furthering the professional status of our industry requires that we actively seek necessary legislative changes as discussed at length on this platform. We have noted a lengthy list of current problems and regulatory shortfalls and must come together to  legitimise the solutions and processes presented, in order to ensure compliance.

8. Prioritise insurance and liability cover:

Mitigate risks accordingly by ensuring that all registered and licensed professionals have adequate insurance cover. This protects both the managers and their clients in case of professional errors or oversights.

9.  Redefine our contractual relationships:

Update the contractual relationship between a scheme and MA to move away from master and servant dynamic, to that of a professional service agreement. This will place an obligation on MAs to comply with and enforce the law as it stands, without the option of hiding behind the “instruction received from the Board of Trustees” scapegoat. This can be done by obligating the MAs to act on behalf of the scheme as a whole, empowering them to report to owners any irregularities taken by scheme executives, while providing protection for MAs when they have acted in accordance with their professional duty.

10.  Embrace the game-changing potential of technology:

The widespread use of tools such as management software, online meeting platforms, and financial tools are straightforward, effective steps that can be taken to immediately improve service delivery and instill transparency in operations.

Laying the groundwork: standardisation, ethics and collaboration

Advancing the professional status of the community scheme management industry in South Africa is a formidable task that necessitates concerted effort and collaboration among all stakeholders, including existing practitioners, regulatory bodies, universities, and government entities. This cooperative approach is vital to elevate industry standards, enhance service delivery, and foster trust among property owners.

Establishing a solid foundation for professionalism involves implementing a comprehensive framework built upon standardised education, ethical commitments, and effective enforcement mechanisms. To achieve this, returning to fundamental principles must be the starting point on our journey toward greater professionalism in the community schemes management industry.

Written by Willie Roos