A Property24 reader asks:
I have just a few questions relating to complex living, which I hope you may be able to help with.
We live in a sectional title complex where management is falling apart due to non-payment of levies, resulting in huge arrear problems, which are exacerbated by unexplained spiked City Council accounts.
It appears the managing agent doesn’t really have the muscle to collect from people. Non-payers contest every plan from debt collectors to attachment orders while they remain in the property – banks don’t want to touch our complex due to unhealthy financials, which makes it difficult to sell.
In my personal opinion we are insolvent and it doesn’t look like there’s anything we can do to encourage cash flow.
Is there a body that we can seek advice from –that can come and assess the current status quo? I have lost confidence in our managing agent. Their plans always involve raising expensive loans that we cannot afford as a result of cash flow challenges.
Johan le Roux, Executive Director of Propell, advises:
The crux of the matter is that the owners of a Body Corporate once a year select a set of trustees at an Annual General Meeting (AGM). The trustees are mandated to act on behalf of the Body Corporate.
Very often trustees appoint a managing agent and discuss with them the schemes requirements and their expectations. Most managing agents are part of NAMA (National Association of Managing Agents) - www.namasa.co.za.
The contract with a managing agent is normally one year and service delivery can therefore be reviewed annually.
If a managing agent is not performing, the trustees can give them notice and opt to appoint a different company.
Collections of levies are complicated and it can unfortunately take a very long time for arrear levies to be collected. Legal fees need to be paid and this can lead to significant cash flow drains and deterioration of the scheme.
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