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Directing an estate may seem like a daunting task, but it can be done with the right mindset and preparation. To determine how hard directing an estate really is, Estate Living had a chat with the President of the Association of Residential Communities, Jeff Gilmour.
‘The easy answer to that is, well, it must be hard, but that’s not true,’ Gilmour said.
The role of a director
Gilmour explained: “In essence, directing an estate means setting the overall goals and vision for the community, ensuring that the day-to-day operations are running smoothly, and adhering to legal requirements.” He added that it involves hiring qualified staff to handle finances and budgets, mentoring the estate management team, developing policies, and ensuring that the governing documents are in order.
Gilmour explained that different types of communities or estates have their own unique rules and regulations: “Some have directors, while others have trustees, but all require someone to lead and make decisions.”
He adds: “Being a director or trustee of an estate is not necessarily hard, as long as you are prepared, inducted properly, there for the right reasons, comply with the rules, and act responsibly.”
When asked if directing an estate is hard, Estate Manager, Marius Nel said: “It’s impossible to please everyone.”
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The importance of well-rounded board of directors
Having a well-rounded board of directors with diverse skills is ideal for directing an estate. The board should have members who can think strategically, manage finances, analyse data, and communicate effectively with the community.
‘It’s not necessary for a board member to micromanage the estate manager; rather, they should delegate tasks appropriately and focus on setting the overall vision and direction for the estate,’ said Gilmour.
Nel spoke on the importance of trying to do the right thing: ‘You’ve got to try to do the right thing, and you have to be consistent in your decision-making process,’ he said.
Legal obligations
Estate managers and directors have a legal obligation to act in the best interests of the estate and its members, known as fiduciary duty. They face numerous challenges, both external and internal, such as infrastructure issues and conflicts between residents. They must navigate these challenges and work to resolve conflicts in a way that benefits the estate as a whole.
Directors of estates must comply with the Companies Act when running their Home Owners Association (HOA). This Act sets out various requirements that HOAs must meet, such as holding annual general meetings and filing annual returns. HOAs must also comply with other laws, such as the Protection of Personal Information Act (POPIA) and the Community Schemes Ombud Service (CSOS) Act.
Meeting the right criteria
According to Gilmour, one of the biggest challenges faced by the industry is ensuring that directors and trustees meet certain criteria to serve on boards. He added: ‘This lack of requirements can lead to a disparity between successful and unsuccessful estates, depending on the quality of the board.’
To combat this challenge, many estates outsource certain requirements, such as audits or finances, to qualified third-party companies.
Gilmour adds: ‘While there are numerous challenges, being prepared, complying with the rules and acting responsibly can make directing an estate a rewarding experience.’
