A Management Agreement in the context of sectional properties is a legally binding document executed between the corporation (often a body corporate formed by unit owners) and a manager (an individual or company responsible for managing the property).
This agreement outlines the responsibilities, terms, and conditions under which the manager will oversee and maintain the common areas. Sectional properties, as governed by the Sectional Properties Act 2020, include developments where individual ownership of units is combined with shared ownership of common property.
Key aspects of the agreement include:-
Definitions and General Terms
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Common Areas: These refer to shared spaces within the property, like lobbies, hallways, parking lots, recreational areas, and other facilities that are maintained for the collective benefit of all unit owners.
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Unit Factor: This term denotes a proportionate factor of ownership in the corporation, determining the extent of each member’s rights and responsibilities in the common property.
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Service Charge: Levies and assessments imposed on unit owners for the maintenance and operation of the property.
Responsibilities of the Manager
The manager is tasked with ensuring the property is well-maintained, secure, and efficiently run. This includes general management and maintenance of common areas, financial management like preparing annual budgets, collecting service charges, maintaining accurate financial records, and ensuring compliance with the by-laws and regulations of the corporation.
Corporation’s Obligations
The corporation must support the manager by providing necessary information, documentation, and access to the property. It is also responsible for maintaining a register of members, holding meetings, and keeping proper financial records related to service charges.
Financial Matters
The agreement outlines the manager’s remuneration, typically a fixed rate paid monthly, and reimbursement for reasonable expenses incurred during the management of the property. It also specifies the process for preparing and approving the property’s annual budget.
Insurance, Leasing, and Maintenance
The manager, in consultation with the corporation, may place insurance on common areas and is involved in leasing and granting easements or restrictive covenants as per the Act and by-laws.
Dispute Resolution
The agreement provides a framework for resolving disputes, favouring mediation and arbitration before litigation, in line with Kenyan law.
This agreement embodies the principles of the Sectional Properties Act 2020, aiming to ensure that common property is managed efficiently and to the benefit of all stakeholders. It emphasizes transparency, accountability, and cooperation between the corporation and the manager, underscoring the importance of clear communication and shared responsibility in the governance of sectional properties.
Disclaimer:
Please note that the information provided in this article is for general informational purposes only and should not be construed as legal advice. It is always advisable to consult with a qualified legal professional to discuss your specific circumstances and obtain tailored legal counsel.
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