Executive Managing Agent (EMA)

The establishment of the Executive Managing Agent (EMA) role originates from the Sectional Titles Schemes Management Act (STSMA), which was enacted into law on 7 October 2016. The primary purpose of an EMA is to professionalize the functions traditionally undertaken by trustees, thereby shifting the governance model from a voluntary role with indemnification to a full-time position with direct liability.

Upon appointment, the EMA assumes all duties and responsibilities that would otherwise vest in the board of trustees. These responsibilities include, but are not limited to, financial management such as budgeting and levy collection, maintenance oversight, enforcement of conduct rules, and general administration of the scheme. The execution of these functions is critical to ensuring optimal value preservation for all owners, for which trustees would otherwise bear ultimate responsibility.

The role of a trustee has become increasingly complex, often demanding expertise that exceeds the capacity of part-time, non-professional volunteers. Although trustees benefit from a degree of indemnification under the STSMA, their obligations remain substantial and, in many instances, burdensome. The increasing reluctance of unit owners to serve as trustees, due in part to the thankless nature of the position and its associated risks, has necessitated alternative governance solutions.

In recognition of these challenges, the STSMA, through prescribed Management Rule 28(1), empowers a body corporate to appoint an EMA by way of a special resolution. The appointment of an EMA offers several advantages, including:

Impartiality in Decision-Making – The EMA ensures objective governance, mitigating conflicts of interest that may arise when trustees are required to adjudicate matters involving fellow owners, including legal disputes, renovation approvals, and conduct rule violations.
Professional Full-Time Management – Unlike trustees, who often serve in a voluntary and part-time capacity, the EMA is a qualified professional with the requisite expertise and experience to manage the scheme effectively. Furthermore, the EMA does not benefit from the indemnification afforded to trustees under the STSMA and is personally liable for all decisions and omissions.

By appointing an EMA, a body corporate can ensure professional, accountable, and continuous management of the scheme, thereby enhancing compliance, governance, and overall operational efficiency.

Executive Managing Agent (EMA) – Q&A

What does an Executive Managing Agent (EMA) do?
An Executive Managing Agent (EMA) is an external individual or entity appointed by a community scheme to perform the functions and exercise the powers that would ordinarily be vested in the trustees. Upon appointment, the EMA assumes full responsibility for the day-to-day governance and decision-making of the scheme, effectively replacing the board of trustees. It is critical to note that once an EMA is appointed, the scheme will no longer have trustees.
What is the process for appointing an Executive Managing Agent (EMA)?
An EMA is appointed by way of a special resolution of the members of the scheme, as prescribed by Prescribed Management Rule (PMR) 28 of the Sectional Titles Schemes Management Act (STSMA). As all unit owners are members of the body corporate, the appointment is ultimately a decision of the owners. Additionally, members who collectively hold at least 25% of the total participation quota within the scheme may apply to the Community Schemes Ombud Service (CSOS) to appoint an EMA.
Whom does the Executive Managing Agent (EMA) report?
In accordance with PMR 28, and specifically PMR 28(3)(f), the EMA is required to report to all members of the scheme on a quarterly basis regarding the administration and management of the scheme. In practice, the EMA works closely with the scheme’s Managing Agent (MA), much like trustees would. Given the importance of transparency and effective governance, it is advisable for the EMA to provide monthly reports, rather than only quarterly, as this enhances communication and reduces the volume of queries from members.
What are the pros and cons of appointing an Executive Managing Agent (EMA)?
The role of a trustee is often time-consuming, demanding, and undertaken without remuneration. Trustees are required to make critical decisions on a regular basis, and not all owners have the willingness or capacity to dedicate the necessary time to the governance of the scheme. For schemes struggling to secure volunteer trustees, the appointment of an EMA is a practical solution. An EMA possesses the necessary expertise and experience to perform the functions of trustees effectively and efficiently.

Furthermore, unlike trustees who benefit from indemnification under the STSMA, an EMA assumes full liability for all acts and omissions. This ensures a heightened level of accountability, which is often a key consideration for schemes seeking professional governance.
Are the Executive Managing Agent (EMA) and the Managing Agent (MA) the same?
No. The roles of the EMA and MA are distinct and should not be conflated. While a Managing Agent (MA) may technically be appointed as an EMA, best practice dictates that these functions remain separate. The MA operates under the instruction of the trustees, whereas the EMA assumes the roles and responsibilities of the trustees upon appointment. Maintaining this distinction serves to reinforce transparency and governance best practices within the scheme.
What steps can members take to verify that the Executive Managing Agent (EMA) is performing its responsibilities?
In compliance with the STSMA, an EMA must report to members at least once every four months regarding the administration of the scheme. Additionally, the EMA is required to conduct an inspection of the common property at least every six months. While these are the statutory minimum requirements, industry best practices suggest that monthly reporting and bi-monthly inspections of common property significantly enhance accountability, governance, and transparency.
What fiduciary responsibilities does an Executive Managing Agent (EMA) have?
An EMA is held to the same standard of care and skill as trustees and is obligated to manage the scheme in a professional and diligent manner. Furthermore, the EMA is personally liable for any losses suffered by the scheme as a result of its failure to exercise due skill and care. Unlike trustees, however, the EMA does not benefit from indemnification under the STSMA. This distinction is significant, as many trustees are not fully aware that indemnification does not extend to an EMA.
What recourse do members have if they are dissatisfied with the Executive Managing Agent (EMA)?
The process for removing an EMA mirrors the process for its appointment—by way of a special resolution passed by the members of the scheme. This ensures that an EMA can be dismissed as easily as it was appointed, thereby preventing the scheme from being subjected to the same risks associated with schemes that are placed under administration, where administrators have been known to abuse their powers to the detriment of the scheme.

Should members elect to terminate the services of an EMA, they must pass a special resolution to remove the EMA and subsequently elect trustees to resume governance of the scheme. While it is advisable for an EMA and MA to maintain a collaborative working relationship, it is recommended from a transparency and governance perspective that these roles be fulfilled by separate entities.
Summary
Rule 28(1) of the STSMA, provides for Bodies Corporate, by way of a special resolution, to appoint an Executive Managing Agent (EMA).

Time frame: 30 days’ notice.
Quorum: 33.33% of the total vote value (participation quota) must be present,
Special Resolution: 75% calculated both in value and in number, of the votes of the members of a body corporate.