Andrew Schaefer, MD of residential letting, insurance and property management group Trafalgar, sheds some light on the matter.
“This means each owner contributes towards insuring the buildings and other improvements on the land; keeping the common property in a good state of repair; ensuring the obligations under sectional title laws are met and maintaining sufficient funding to allow the BC to fulfil its obligations.”
He says residential properties are frequently held to ransom by a handful of owners defaulting on their levy payments – in no way assisted by the legal system which appears to be getting progressively less efficient – further exacerbating this very real problem.
“Arrear levies results in a visible deterioration in the property or complex as repairs and general maintenance go unattended; municipal and creditors’ accounts falling into arrears causing a possible interruption to services; decreasing returns on the owner’s investment; poor resale values; difficulties in selling units as bonds are declined; compounding debts that may trigger special levies; refused insurance claims – and lastly, a stressed and unhappy community of home owners,” he concludes.
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