ADVOKS GLOBAL · KENYA
The Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations
56. Duties of a REIT manager
Edition: 2023-10-06 · In force
56. Duties of a REIT manager
(1)The scheme documents shall set out the obligations and duties of the REIT manager in accordance with these Regulations.(2)The REIT manager shall, subject to the terms of the scheme documents and any directions in writing received from the trustee—(a)acquire, manage, maintain and dispose assets of the scheme and where authorized by the scheme documents conduct development and construction activities—(i)in accordance with the provisions of the scheme documents, these Regulations and the law applicable to trusts; and(ii)to give effect to the objectives of the scheme;(b)take all reasonable steps and exercise due diligence to ensure that the assets of the scheme are invested in accordance with the scheme documents;(c)while acting in the capacity as a fiduciary on behalf of the REIT securities holders–(i)exercise the degree of care and diligence that a reasonable and skilled person would exercise in the position of a management company;(ii)act in the best interests of the REIT securities holders and where there is a conflict between the interests of the REIT securities holders and that of the REIT manager, give priority to the interests of REIT securities holders;(iii)observe high standards of integrity and fair dealing in managing the fund to the best and exclusive interests of the REIT securities holders;(iv)not use information acquired in his capacity as REIT manager to gain an unfair advantage for itself or other persons, or to the detriment of the REIT securities holders;(v)ensure that the property of the fund is clearly identified and held separately from the assets of the REIT manager or any other person; and(vi)establish and maintain risk management systems and controls and ensure that it has adequate resources and systems, including suitably qualified and equipped human resources to fulfil the functions and obligations of a REIT manager;(d)account to the trustee and the REIT securities holders for any loss suffered by the scheme as a result of failure by the REIT manager, any director of the REIT manager, any officer, employee or agent appointed by the REIT manager to exercise the required standard of care and diligence necessary to operate and manage the fund;(e)maintain on behalf of the trustee, proper accounting records and other record to enable an accurate view of the fund to be formed;(f)prepare accounts in accordance with regulation 101;(g)provide all assistance necessary to enable an audit of the accounts prepared under subparagraph (f) to be carried out in accordance with Regulation 97;(h)take all reasonable steps and exercise due diligence to assist and ensure that the assets of the trust are valued as required under regulation 113;(i)obtain tenants and manage tenancy arrangements;(j)carry out or cause to be carried out all property management functions in compliance with Estate Agents Act (Cap. 533);(k)obtain quotations for insurance of the assets of the trust and make recommendations to the trustee;(l)prepare budgets for capital works and maintenance of the assets of the trust;(m)recommend to the trustee for approval, the budgets for capital works and maintenance prepared under subparagraph (l);(n)implement approved budgets, capital works and maintenance programmes;(o)prepare budgets and work programmes, negotiate contracts for recommendation to the trustee for approval in relation to the development and construction works including the appointment of contractors and professional and expert advisors;(p)implement any budgets, work programmes and contracts approved by the trustee in relation to development and construction works, update budgets and work, programmes as required and recommend changes to the trustee;(q)prepare and submit to the trustee recommendations on distributions;(r)undertake all calculations including calculations of net asset values and ratios required to comply with the terms of the scheme documents and these Regulations;(s)arrange and recommend to the trustee for approval any borrowings or other financing arrangements and the entering into of any risk management products or strategies;(t)make recommendations to the trustee and manage repayment and compliance with the terms of any borrowing arrangement under subparagraph (r);(u)in the case of an unlisted trust, take all reasonable steps and exercise due diligence to ensure that the REIT securities are correctly priced and the provisions of the scheme documents on redemption are complied with;(v)prepare and lodge with the Authority, and circulate to the trustee and REIT securities holders, periodic reports as required under the Regulations;(w)in the case of an unrestricted issue l-REIT, ensure that the scheme documents are made available for inspection by the public, free of charge, at all times during official working hours and make copies of such documents available upon the payment of a reasonable fee; and(x)in the case of a D-REIT, ensure that the scheme documents are available to any REIT securities holder or person who is potentially qualified to be a REIT securities holder.(3)A REIT manager shall, in the performance of its duties, act in the best interests of REIT securities holders as beneficiaries of the real estate investment trust and take reasonable care to protect those interests.