Choosing an agent who handles levies and the reserve fund properly

When a managing agent handles levies and reserve funds carelessly, schemes suffer — unpaid contributions pile up, maintenance gets deferred, and sudden shortfalls force emergency special levies on owners. The right agent makes this invisible: levies collected on time, reserve funds properly invested and accounted for, and owners confident their money is secure.

This choice matters more than agent personality or marketing polish. Levies and reserves are the spine of every scheme's health. You need someone who treats them as the core responsibility, not a side task.

Track record with collection and arrears

Ask candidates directly: what is their average collection rate, and how do they handle owners who don't pay? A credible agent will tell you their rate and explain their process — whether they issue statements monthly, escalate to attorneys after agreed notice periods, or use other mechanisms. They should have a written policy they can share.

Don't accept vague answers. Collection rates above 95% are realistic in well-run schemes; if an agent quotes 80%, that's a warning. Persistent arrears don't just hurt cash flow — they breed resentment between owners and undermine scheme morale. Ask for references from two or three current schemes and contact those bodies corporate directly. Trustee-to-trustee, you'll hear the truth about collection discipline.

Also ask how they notify owners of amounts due and payment deadlines. Some agents use WhatsApp or email reminders; others rely on formal statements alone. The best combine methods. And ask what happens to money as it arrives — does it sit in a general account or go to a dedicated scheme trust account?

Reserve fund management and transparency

A reserve fund exists to pay for major repairs and replacements without shocking owners with emergency levies. But it only works if the agent invests it strategically and reports it honestly.

Ask candidates: do they conduct a reserve fund study every few years, and if so, how often? Do they hold reserve funds in a separate, interest-bearing account, or pool them with operational money? What is their typical reserve-fund return, and can they show you statements from schemes they manage? A good agent will provide quarterly or annual reserve reports that break down what's been set aside, what's been spent, and what's projected for upcoming years.

Also ask whether they've ever had to short-change a reserve fund to cover operational shortfalls. If they say yes, dig deeper — it means they didn't manage cash flow properly. If they say no, ask how they'd handle a scenario where operational levies fall short. Their answer tells you whether they think reserves are a safety net to raid or a true long-term fund.

Compliance and financial controls

Several regulatory and professional frameworks apply to managing agents. Ask candidates whether they are registered with PPRA, and request their registration number. Ask whether they hold Professional Indemnity Insurance and whether their trust accounts are audited annually. These aren't optional luxuries — they protect your scheme if things go wrong.

For financial controls, ask:

• Do they reconcile trust accounts monthly and provide owners with reconciliations?
• Are invoices and receipts kept for every expense?
• Does an external auditor or accountant review their books annually?
• How do they separate owner funds from their own operational accounts?

An agent who resists these questions or seems vague is a red flag. Ask to see a sample set of financial statements from one of their current schemes (anonymised if necessary). You should be able to understand where every rand went.

Communication and responsiveness

Even the best reserve strategy fails if owners don't understand it. Ask how candidates communicate financial matters to the scheme. Do they hold annual financial meetings? Do they answer owner queries within a set timeframe? Can owners access balances or levy statements online, or must they request them manually?

Responsiveness to trustee queries matters too. Levies and reserves generate constant questions — about payment plans for owners in hardship, about whether a reserve study is overdue, about why a particular expense came through. You need an agent who answers these within a working day or two, not weeks.

The right agent won't just collect money and file paperwork. They'll make it their job to keep your scheme solvent, reserves healthy, and owners informed. When you're vetting candidates, spend most of your time on these four areas. Everything else flows from competence here.

On Strove, you can find managing agents with verified reviews and compare their experience with levy collection and reserve fund management before you shortlist anyone to interview.