Thursday 08 December 2016

Managing agent : A demanding profession

Managing agent : A demanding profession

 

A demanding profession
Managing agent

The importance of training and skills

 
 
Over the years, the professional work of the co-ownership property managing agent has become considerably more complex. This activity continues however to suffer from an image problem, and the managing agent is not necessarily seen as the ideal partner for the co-ownership property, having a mandate to act under all circumstances solely in the best interests of the joint owners. In respect of the increasing complexity of the activity, professionals and public authorities are in the process of establishing a training programme leading to a higher technical diploma [BTS] in this field.

The managing agent is called upon to ensure the optimum level of conservation of the joint owners’ property through proper maintenance, in order, amongst other things, to retain its value, and also to ensure a residence of quality either for the joint owners themselves or for their tenants. Access to the profession is contingent upon a trading permit that is issued on the basis of a formal qualification held by the applicant. Generally, this qualification is obtained following attendance on, and a certificate of successful completion of specific courses run for this purpose by the House of Training, hosted with the Chamber of Commerce.

Qualification is the key


In order to support the growing complexity of this activity, professionals and public authorities are in the process of establishing a training programme that leads to a higher technical diploma [BTS] in this field. This qualification enables the reinforcement of the level of qualification of employees in a company or the opening up of the route to freelance working. “It is rapidly becoming essential to introduce the requirement for a minimum continued and regular development. By way of example, the provision, every 2 or 3 years of a number of hours for the required skills updating, particularly for the sake of the consumer, says Claudine Speltz, vice-president of the Association européenne des professions immobilières (CEPI-CEI) [European Association of Real Estate Professions], honorary president of the Conseil européen des professions immobilières (CEPI) [European Council of Real Estate Professions] and of the Confédération européenne des administrateurs de biens (CEAB) [European Confederation of Property Managers] and president of the Chambre immobilière du Grand-duché de Luxembourg (CIGDL) [Real Estate Chamber of the Grand Duchy of Luxembourg].

“We know where the beginning is, but never where we will finish”

The managing agent must have a very broad range of skills: technical, accounting and legal associated with building and construction sector, as well as soft skills (social skills, empathy, the ability to deal with multicultural issues, mediation, conflict avoidance and resolution, etc.)  While often acting discreetly in the background to ensure a good level of cohesiveness and quality of life in a co-ownership property, their actions are, by definition, liable to go unnoticed, and yet… “The management agent is like a company manager. They manage, constantly alert to potential problems and taking action to deal with them”.

Two types of owner with distinct interests


“People want value for money”: the service must meet the expectations of the growing demands of the owners, if possible at a constant price. The level of fees of the managing agent remains a thorny issue. Often the fees generated by the lifetime of a building and the total amount of the managing agent’s fees are merged together. At this stage one is reminded that “the distribution of the management agent’s fees is by 1/1000ths and not by unit”. Achieving recognition of the value of their work by the general public is very difficult. However, “the legislation still requires the appointment of a managing agent for the management of a co-ownership property: a professional managing agent above 9 lots for residential use, or a joint owner below this threshold “.
Amongst the various profiles of the owner, two are characterised, with divergent interests. “The landlord owner wishes to generate the maximum possible rental income from their property, and at the lowest cost, and thus, as far as possible will want to limit their investments. The occupant owner, on the other hand, is generally mindful of the quality of life that their property should be able to achieve, and is therefore more disposed to make a regular investment in order to maintain the standard of the building”.  

Creation of a reserve fund


A decision that has not been taken in a timely manner can prove very costly later on. In the same way, unexpectedly having to replace equipment can cause financial worries for joint owners in respect of their financial capacity at that given moment. “Given that the financial capacities of the various joint owners can be very divergent, it is necessary to establish a mandatory reserve fund”. In fact, sudden financial incapacities can prevent necessary, even urgent works from being carried out in the building “to avoid major damage and to ensure that the building remains viable. For example, the replacement of a boiler in winter, or roof repairs to avoid damaging leaks”. Beyond urgent repairs, one must anticipate regular renewal of installations and plan for a sufficient reserve to fund this. “This fund would be created in the form of a separate account which could only be used by the managing agent upon the decision of the general meeting”. The obligation to have such a fund is in the course of negotiation; “its political acceptance would significantly facilitate the good management of co-ownership properties”.         .
 

A finger has also been pointed at the current regime of the requirement of majority decisions.

 

At the moment, an enhanced majority is obligatory for certain decisions that need to be taken in the general meeting. “This generally involves supplementary equipment investment expenditures, such as the initial installation of a water softener, or a lift, the creation of an access ramp for a disabled person, etc.” However, this type of vote can sometimes be inappropriate. “For example, if a lift needs to be made safe to meet legal requirements, and the enhanced majority is not achieved so that the necessary works can be carried out, the managing agent is obliged to decommission it, which penalises the residents”. For all issues related to safety, new technologies and health, the management agency expert favours the establishment of different types of majority and the position that: “it is essential to initiate the work of serious examination of the types of majority required, case by case, in order to make management more efficient and more equitable for the different needs of the occupants of a building”.

A requirement at all levels


The function of the managing agent is governed by an unconditional adherence to co-ownership regulations and the obligation to remain neutral. “One can never go wrong by adhering to a rule, but one inevitably does if favouritism creeps in”.   

Clients are becoming increasingly particular and “this expectation entails a new personal requirement for us too”. And the key to this lies in adherence to a code of ethics, to a quality charter, The CIGDL is working tirelessly to convince property professionals of the importance of adhering to an ethical code that also applies to managing agents. The profession of the managing agent, like that of the estate agent, suffers from an image problem, and the only way to improve this is to place the emphasis firmly on the code of ethics and to encourage professionals to avail themselves of the training that is available. “Serious minded professional will always be able to make a difference and to ensure the sustainability of their professional activity.

Finally, the main objective lies in the protection of consumers. “I do not like to talk in terms of aggressive, ruthless competition. Instead one should seek to create an ethos that is propitious to exchanges. We should not forget that our profession is also working for the preservation of a right to a decent standard of housing, and that we need to earn the respect of our clients who entrust to us the management of their investment”.
 
Emilie Di Vincenzo