If there is a scenario in sectional title management which body corporate members find distressing, says Catherine Cockcroft, sales manager of the levy collection and funding company, Propell, it is that in which those owners who religiously pay their levies on time find themselves carrying expenses for serial non-payers.
The situation, says Cockcroft, is then likely to become even more “prickly” if and when the trustees are forced to raise a special levy to cover municipal debts to avoid suspension of services, to carry out essential repairs or to fund legal proceedings against non-payers.
“The loyalty of the regular payers is then likely to reach breaking point. We have experienced a fair number of cases in which a ‘climate of apathy’ has set in.
This, although understandable, said Cockcroft, is short-term, illogical thinking on the part of the good payers.
“It has to be accepted,” she said, “that the ship must be kept afloat and it has to be realised that, once legal processes to recover unpaid levies are initiated, they may take time to run their course, but are usually effective in the end if attended to competently.”
Paying owners, said Cockcroft, may not be aware of how involved and lengthy SA’s recovery processes are but, although this can lead to frustration, owners should not stop paying their levies, as this could lead to the financial ruin of the body corporate.
Problems do arise, she said, where the already distressed body corporate cannot successfully continue to lay out legal fees, which have to be carried by them for the duration of the recovery process and the legal action may then be forced to a halt.
“Propell has recognised this as a huge problem which can seriously threaten the liquidity of schemes – which is why the service we provide of funding legal fees to the body corporate and collecting back from the defaulting owners is invaluable to many sectional title schemes.”
“These measures have again and again saved schemes from financial collapse and in time ensured that justice prevails and the owner’s valuable asset once again increases in value.”