Trustees of bodies corporate who neglect to maintain the communal areas of their schemes are causing them to lose value and are contravening their responsibilities as set out in the Sectional Title Act, says Catherine Cockcroft, sales manager of Propell levy funding and collection company.
“The Sectional Title Act makes it clear that a body corporate is compelled to maintain the common property and keep it in a good and serviceable condition. The trustees, who are the elected managers of a scheme, therefore have a fiduciary responsibility to ensure the upkeep of all shared areas and should make allowance for this in the annual budget,” says Cockcroft.
“The act lays it down that if a major maintenance task is needed, trustees may call a special general meeting at which they should outline to their members what repairs are needed, what the alternatives are and the costs involved in carrying out the work. Where repairs become crucial but have not been budgeted for, the trustees will need to raise a special levy to cover the costs – especially if these are expensive, for instance to replace lifts or roofs.
“Owners will then have to pay their portions of the special levy and this is based on their participation quota. The trustees can then decide whether to make the owners’ portions payable in a lump sum or allow them to be paid in instalments.”
She says this can lead to difficulties if some members don’t pay their portions within the required period, and preventing the work from going ahead as planned.
“This is why raising loans from funds like Propell can often provide a solution. Banks generally don’t offer loans to bodies corporate as they have no assets to offer as collateral. Propell, however, over and above its monthly levy funding and collection services, can also provide standalone project loans to bodies corporate and homeowners’ associations.
“The required amount is advanced in a lump sum and repayments are made in instalments over a period of up to five years with interest. This allows maintenance work to be instituted timeously and owners who are not in a position to pay their portions of the levies immediately can pay smaller instalments over a period determined by the trustees.”
Cockcroft says Propell’s assistance is always given with minimal or no interference in the general running of the scheme. A due diligence process is carried out at the outset, which establishes whether the body corporate complies with the standards set out by the Sectional Title Act. After approving the application and the signing of relevant agreements by the trustees, the funds will be made available within a matter of days.
Loans can be anything from R50 000 upwards and repayment periods are variable, depending on the scheme’s financial position and the size of the loan.
I am a co-owner of a unit in a complex. We are experiencing leaking problems(in heavy rains) in the concrete hosting the elctricity cable for the light on the balcony. It is either due to a problem with the unit above or neglect by the developer. Is this us owners’ responsibilty to sort it out or the body corporate?
Regards
Dear Martin,
Thanks for your email. It depends. If it is poor workmanship then either you as the owner or the body corporate (only in case of common property) have to pay for the repairs. If the owner above is responsible for the damage, then you need to recover the cost of the repairs from him and if necessary through the legal route or arbitration.
Hope this helps.
Michael