Trustees should remain informed and in control without becoming the scheme’s day-to-day operating team.
A managing agent cannot remove every difficult decision from trustees. Budgets still need to be considered. Maintenance work still requires approval. Owners will raise complaints, contractors will sometimes disappoint and unexpected problems will occur.
The value of a managing agent is not that these responsibilities disappear. It is that the work surrounding them is organised: information is made clear, actions are followed through and trustees can make informed decisions without coordinating every step themselves.
Poor service rarely begins with one dramatic failure. It usually appears gradually: important emails require repeated follow-ups; maintenance matters remain unresolved; financial reports create more questions than answers; meeting actions carry over month after month; scheme records are scattered across inboxes; and trustees begin doing work they expected the managing agent to handle.
Any managing agent can experience a demanding week, a delayed contractor or an unusually complicated matter. These warning signs become meaningful when they form a repeated pattern. Although the statutory examples below focus mainly on sectional-title bodies corporate, the operational warning signs are equally relevant to homeowners’ associations and estates, subject to their own governance documents and management agreements.
Start with the management agreement
Before assessing performance, trustees should confirm what the managing agent was appointed to handle. The management agreement should clearly define the services, responsibilities, reporting standards and limits of authority agreed between the parties.
For sectional-title schemes, Prescribed Management Rule 28(5) provides for a managing agent to perform specified financial, secretarial, administrative or other management services under the supervision of the trustees. This differs from an executive managing agent appointed under Rule 28(1), which performs the functions and exercises the powers that would otherwise belong to the trustees.
The body corporate and trustees retain their statutory responsibilities unless the applicable legislation or rules provide otherwise. The managing agent’s role is determined by its appointment and management agreement. An unclear scope is itself a management risk.
1. Communication provides updates but little clarity
Slow communication is not only about how long it takes to receive a reply. The greater problem is uncertainty. A trustee raises an issue but cannot tell whether anyone is actively dealing with it, who is responsible for the next step, what information or approval is still required, when progress can reasonably be expected or when another update will be provided.
A reply that says ‘noted’ or ‘we are looking into it’ acknowledges the message, but it does not necessarily reduce the trustee’s workload. If the trustee must repeatedly ask what happened afterwards, responsibility for driving the matter has effectively shifted back to the trustee.
Good communication does not require an immediate final answer to every request. It requires a dependable process. Where a matter cannot be resolved immediately, the response should ordinarily explain the current position, the next action, who is responsible, any outstanding information or approval and the expected timeframe. Urgent matters should also be distinguishable from routine requests.
The practical test: can trustees understand the status and next step of an important matter without searching through a long email chain or sending another reminder? If not, communication may be occurring without creating clarity.
2. Actions are acknowledged but not closed
There is an important difference between responding to a task and completing it. A maintenance request may be forwarded to a contractor. A financial query may be sent to the accounting team. A quotation may be requested, and an owner’s complaint may be acknowledged. None of those actions means the matter has been resolved.
Weak follow-through becomes visible when contractors are contacted but not actively followed up; quotations are received but never compared or submitted for a decision; trustee decisions are not implemented; owner queries move between departments without resolution; or the same task appears on successive meeting agendas with little progress.
A managing agent cannot control every contractor, municipality, insurer, professional adviser or owner. It should, however, control the follow-up process. Each open matter should have a clear description, a responsible person, a next action, a target date, a visible status and an escalation route if progress stalls.
These are practical management controls, not a claim that every scheme uses a portal, automated reminders or the same reporting format.
An action register should not create unnecessary administration. Its purpose is to prevent important matters from depending on memory, inboxes and repeated trustee intervention. The practical test: when another party causes a delay, does the managing agent actively manage and escalate it—or simply report that it is still waiting?
3. Financial reports create more questions than answers
Sending trustees a large set of financial reports does not automatically create financial transparency. Trustees should not require accounting expertise to identify the scheme’s most important financial risks.
Depending on the agreed financial mandate, useful regular reporting may include:
- The administrative- and reserve-fund positions.
- Actual expenditure compared with budget.
- Material variances and their causes.
- Levy arrears and how they are changing.
- Cash-flow pressures and upcoming commitments.
- Significant unpaid suppliers or liabilities.
- Decisions or corrective action required from the trustees.
Warning signs include reports issued without commentary, material variances remaining unexplained, arrears shown without their movement or collection status and owner-account adjustments appearing without supporting information. Another common problem is presenting the bank balance as if it were the amount freely available to spend. A balance without the scheme’s outstanding liabilities and approved future commitments can create a misleading impression.
For sectional-title schemes, Prescribed Management Rule 26 requires the body corporate to maintain proper financial records covering income, expenditure, assets, liabilities and individual member accounts, with separate accounting for its administrative and reserve funds. Where financial administration and reporting have been assigned to the managing agent, its service should help trustees meet those obligations and understand the resulting information.
The practical test: after reviewing the monthly reports, can trustees explain the scheme’s financial position, its major variances and the immediate decisions required? If the reports provide figures without understanding, they are not yet decision-ready.
4. Important records are incomplete or scattered
A community scheme creates a substantial record over time. This can include governance documents, owner and resident information, meeting records, financial statements, insurance documents, maintenance plans, supplier agreements, professional reports, approvals, warranties and important correspondence.
Poor recordkeeping often remains hidden until information is urgently needed. Trustees may discover that the latest approved rules cannot be located, signed minutes differ from the version on file, owner information is incomplete or outdated, contractor warranties remain in a former trustee’s inbox, there is no complete history of a recurring defect or nobody can confirm whether an important decision was formally approved.
A scheme’s records should not depend on the continued availability of one portfolio manager, trustee or email account. Prescribed Management Rule 27 requires a sectional-title body corporate to prepare and update specified governance records, including meeting minutes and records of trustees, members, tenants, sections, participation quotas, bondholders and future development rights.
Good recordkeeping means information is current, complete, protected and retrievable by authorised people when required. The practical test: if the current portfolio manager or chairperson became unavailable tomorrow, could the scheme continue operating from its records?
5. Maintenance is mostly reactive
Unexpected failures will occur in every property. Reactive management becomes a warning sign when almost all maintenance begins with an urgent complaint.
- The same leak is repaired repeatedly without investigating the underlying cause.
- Preventive inspections and recurring services are not tracked.
- Quotations are requested before the scope of work is properly defined.
- Trustees cannot see which defects are open, recurring or becoming more serious.
- Long-term maintenance planning is disconnected from the reserve budget.
A managing agent is not expected to replace engineers, architects, quantity surveyors or specialist contractors. Its role is to help ensure that problems are recorded properly, the right information reaches the right people, decisions are obtained, work is followed through and the resulting records are retained.
A useful maintenance system should distinguish between emergencies, routine repairs, recurring defects, preventive maintenance, compliance work and planned capital projects. It should also preserve the history of a problem—not merely the details of the latest contractor visit.
For sectional-title schemes, Prescribed Management Rule 22 requires a written maintenance, repair and replacement plan covering major capital items expected to require work during the following ten years. Section 3(1)(b) of the Sectional Titles Schemes Management Act also requires the body corporate to establish and maintain a reserve fund for future common-property maintenance and repairs.
The practical test: is the scheme reducing the likelihood and cost of future failures—or only responding once something has already gone wrong?
6. Meetings produce minutes but no momentum
A meeting can be properly convened, well attended and accurately minuted without producing meaningful progress. Warning signs include supporting information arriving too late for proper review, discussions ending without a clear decision, resolutions recorded vaguely, actions without responsible people or deadlines, and the same matters returning to the agenda without meaningful progress.
Good meeting management begins before the meeting. The agenda should identify the decisions required, supporting information should be circulated early enough for review and the available options should be clearly framed. It continues after the meeting: decisions must be recorded accurately, actions assigned, deadlines agreed and progress tracked between meetings. Minutes create the official record. An action register drives implementation. Both are necessary.
The practical test: does each meeting reduce the number of unresolved matters—or merely create another record of them?
7. Trustees have become the operating team
This is often the clearest warning sign because it reflects the combined effect of all the others. Trustees begin drafting routine owner communications, chasing contractors and quotations, following up on approved payments, maintaining their own action registers, searching for documents the scheme should already have and reminding the managing agent about earlier commitments.
Trustees remain responsible for governance and oversight. They should review information, make decisions, authorise work where required and challenge poor recommendations. That does not mean they should become an unpaid administrative layer between the managing agent, owners, contractors and financial team.
Some trustees prefer to be highly involved, and this is not necessarily evidence of poor service. The warning sign is dependency: matters do not progress unless a trustee personally drives them. A managing agent should strengthen trustee decision-making—not depend on trustees to hold the management process together.
The seven-question trustee check
Can the trustees answer ‘yes’ to each of these questions?
- Can we see the status and next step for important matters?
- Does every significant open action have a responsible person and target date?
- Do our financial reports explain material risks and variances?
- Can approved and current scheme records be found easily?
- Is maintenance becoming more planned and less reactive?
- Do meeting decisions result in tracked actions?
- Would important matters continue progressing if one active trustee became unavailable?
One isolated ‘no’ may identify a specific weakness that can be corrected. A repeated pattern of ‘no’ answers suggests that the management process requires a structured review.
Before deciding to change managing agents
Not every service problem requires an immediate change. A scheme may be dealing with an unclear management agreement, poorly defined responsibilities, a temporary staffing problem, a difficult handover or historic records that were never properly transferred.
Before making a decision, trustees can conduct a structured performance review: review the management agreement and agreed scope; identify recurring problems using specific examples; separate isolated mistakes from persistent patterns; define the information, response standards and reporting required; assign corrective actions and realistic deadlines; review progress after an agreed improvement period; and decide whether the service is improving sufficiently.
The purpose is not to build a case against the managing agent. It is to determine objectively whether the relationship can deliver the level of management the scheme requires. If expectations have been made clear but the same problems continue, trustees may need to consider whether the current appointment remains suitable. Any review of the appointment, termination requirements or replacement process should be conducted with reference to the management agreement, the scheme’s rules and appropriate professional advice where required.
The real measure of a managing agent
The clearest measure of a managing agent is whether trustees can see what is happening, understand the risks and make decisions without personally driving every follow-up. PropAI’s management approach is built around clear information, named responsibility and organised records. The exact reporting, action-management and communication methods are confirmed in the management proposal.
Are your trustees governing the scheme—or managing the managing agent? Request a management proposal from PropAI.