A poorly run scheme with bad financials will lower the potential selling price for individual owners in a building or complex.
I want to tackle a couple of issues on this matter and how they can affect the price of a property and the chances of getting a buyer.
Before a bond can be approved, banks often require a copy of the last audit report and current financial statement before granting a bond.
If the auditing is out of date or the current financials show lots of outstanding levies, it is possible that your buyer will not be granted a loan to buy your unit.
Just because you are up to date with your levies does not mean that the building or complex is financially sound.
Banks are becoming more influenced by poorly run schemes not to give loans as they feel the risk is too high.
Don’t let your building get into a financial nightmare – take action before it gets into that state.
But quite often, the red tape involved with body corporate management can be quite considerable.
It would seem this has been worsened by some new requirements in the Sectional Titles Schemes Management Act.
The Act, in my view, is obsessed with having resolutions before work can be done or serious money paid out.
But many trustees are not playing ball, and this has a negative effect on many owners in their buildings or complexes.
For instance, a resolution is now required to allow the managing agents to hand over owners for collection to the Community Schemes Ombudsman Service (CSOS) or an attorney.
Outstanding levies are a major problem, but trustees often seem reluctant to do so.
Without the return of the signed resolution, the managing agent’s hands are tied.
Where trustees are in arrears the situation is even worse.
Defaulting trustees are unlikely to send the signed resolution back.
They are often reluctant to do so because they don’t want to offend their friends.
And having online meetings does not really help matters and many simple things such as having trustees sign off on the approved budget is a real problem.
CSOS requires a copy of the meeting where the budget was approved and a copy of the signed budget when handing over a defaulter.
No signed resolution or budget means that owner cannot be handed over.
Getting approved contracts back from trustees is also a big problem.
Trustees, please help the management of your scheme by returning resolutions on the turn and giving your managing agents your approval for payment and projects as soon as possible.
- Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.