Trustees of body corporates that fail to maintain communal areas are contravening their responsibilities in terms of the Sectional Title Act according to Propell’s Catherine Cockcroft.
“The Section Title Act makes it clear that the body corporate is compelled to maintain the common property can to keep it in a good and serviceable condition,” she says.
In terms of the Act, any major maintenance that is required for a sectional title property can be paid for through a special levy raised against the owners in the scheme.
“Where repairs are crucial and have not been budgeted for, such as repairing an elevator, the owners will each have to pay a portion of the costs in a lump sum or the body corporate can allow owners to pay off the amount due in smaller instalments,” says Cockcroft.
“However, the body corporate should be in a position to finance these costs and if it is unable to do so then essential work might be delayed while the necessary funding is secured”, she says.
According to Cockcroft banks will generally not provide loans for the body corporate as this entity does not actually own assets and can provide no security for a substantial loan.
“However, Propell can provide a substantial loan for a body corporate or a homeowners’ association to finance major repairs or maintenance work that is urgently needed at a particular complex,” she says.
She says the company will provide a loan over a five-year term at reasonable interest rates that can then be repaid in instalments.
“This allows maintenance work to be done in time and saves owners the cost of paying a substantial special levy to get the work done,” she says.
She says that a due diligence process is carried out by the company prior to granting the loan and this establishes if the body corporate is complying with the Sectional Title Act. After the due diligence, and if the application is approved, the funds are available to the trustees within a matter of days.
“Loans can be anything from R50k upwards and the repayment times are variable depending on the size of the loan,” she says.
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