How to deal with arrear levies and improvements on common property

With more owners defaulting on their levy payments, the scheme's finances are under unnecessary strain. Defaulters continue to enjoy the benefits of a secure environment without contributing to the services that provide it. To ensure owners pay their levies and avoid the need for raising special levies or seeking external funding for services, we will explore the best strategies.

This training session covered what scheme trustees or owners need to do to make improvements to common areas and distinguish between essential and non-essential improvements.

 Leigh Maingard, CEO of Intersect Sectional Title Services, was joined by Zerlinda van der Merwe of TVDM Consultants and Nicola Schaefer of ZDFin, who will help us understand the practical and legal aspects of these topics

 This training session took place on Tuesday 30 July 2024.

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Clarifying responsibilities of trustees and managing agents

In sectional title schemes and homeowners’ associations, multiple stakeholders play crucial roles. Each stakeholder has specific responsibilities that contribute to the scheme's success. However, misunderstandings or failures to fulfill these responsibilities can lead to communication breakdowns and ineffective management.

This training session clarified the respective roles and responsibilities of trustees, owners, and managing agents. By exploring how these roles are interconnected, we aimed to ensure that each participant understands their holistic contribution to the management of the scheme.

This training session took place on Monday 24 June 2024.

 Leigh Maingard, CEO of Intersect Sectional Title Services, presented the webinar.

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Responsibility of maintenance in schemes and voting disqualifications

Maintenance in sectional title schemes sometimes involves the body corporate having to maintain infrastructure that requires access to units to do so. In this training session, we looked at lesser common reasons for maintenance and how to address it. We also briefly reviewed situations where voting at meetings of a body corporate must be disqualified and the reasons for it.

This training session took place on Tuesday 28 May 2024.

 Leigh Maingard, CEO of Intersect Sectional Title Services, presented the webinar.

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Maintenance responsibilities and how to deal with solar installations

Bodies corporate, trustees, and property owners frequently encounter the dilemma of determining maintenance responsibilities for items like doors, windows, and garage doors. This matter remains highly contentious and often results in dissatisfaction and occasionally, inequitable treatment.

Requests for installing solar panels, fireplaces, and skylights are not uncommon among property owners in various schemes. In this training session, we explored strategies for integrating these requests into scheme rules, examining available options for both schemes and owners, and outlining necessary steps before undertaking such installations.

This training session took place on Monday 25 March 2024.

The webinar was presented by Leigh Maingard, CEO of Intersect Sectional Title Services.

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How to navigate extensions to sections and EUAs

Expanding your property within a development scheme can be quite complex. Determining whether the area you wish to expand into is designated as common property, an exclusive use area, or already part of your section can present a significant challenge. Additionally, it's crucial to grasp the permissible activities allowed in the proposed extension area.

In our training session, we delved into the distinctions between extending sections, exclusive use areas, changes of use, and alterations. We enlisted the expertise of Zerlinda van der Merwe from TVDM Consultants, who offered insightful guidelines and highlighted potential pitfalls that property owners should be mindful of.

This training session took place on Wednesday 28 February 2024.

The webinar was presented by Leigh Maingard, CEO of Intersect Sectional Title Services.

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Discontinuing power supply and recouping legal expenses

Bodies corporate often encounter challenges that might seem straightforward to address but become significantly complex when legal considerations come into play.

During this training session, we delved into the matter of discontinuing electricity service to units whose owners fail to fulfil their levy and electricity consumption payments. Additionally, we explored the reasons why legal fees cannot be directly charged to an owner's account that has been transferred to an attorney for subsequent collection purposes.

This training session took place on Monday 29 January 2024 at 17h30.

The webinar was presented by Leigh Maingard, CEO of Intersect Sectional Title Services, along with our guest for this session, Willie Roos from Stratafin.

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Why resolutions are important and the role of CSOS in sectional title living

Daily decisions are made in the management of a sectional title scheme, with some falling under the authority of trustees, while others may necessitate the involvement of scheme members. The significance of resolutions in this process cannot be understated. This training session explores various resolution types, delving into the responsible parties for implementing decisions and signing resolutions.

 In October 2016, new legislation within the sectional title industry set the stage for the establishment of the Community Schemes Ombud Service (CSOS). The CSOS plays a crucial role in aiding schemes, owners, and trustees in resolving disputes within schemes. We examined the role of CSOS and how this cost-effective dispute resolution solution can be utilised by those engaged in community schemes.

 This training session took place on Monday 27 November 2023.

The webinar was presented by Leigh Maingard, CEO of Intersect Sectional Title Services. Training is free and exclusive to Intersect clients.

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How trustees can effectively navigate daily challenges in scheme management

Trustees encounter daily management challenges in handling scheme affairs. Alongside their trustee responsibilities, many trustees juggle daily work commitments, striving to allocate time for scheme-related matters.

At this training session, we delved into the myriad challenges faced by trustees. These include striking the right balance of responsibilities among trustees, authorising invoices, and payments, overseeing contractor work, addressing resident grievances, and ensuring the equitable and accurate application of the scheme's rules, among others. 

This training session took place on Monday 23 October 2023 and was presented by Leigh Maingard, CEO of Intersect Sectional Title Services. Training is free and exclusive to Intersect clients.

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How different levies are calculated in a scheme

The management of scheme finances forms the backbone of a financially sound scheme. Trustees are required to manage the scheme's affairs, including its finances. The scheme members must understand how the finances are managed and what they are responsible for when they pay their levies.

This training session examines how levies are calculated, the impact of participation quotas (PQ), and the differences between section levies, exclusive use levies and maintenance reserve levies. We further consider the effects of PQs when special levies are imposed and alternative financing options for schemes needing funds.

This training session took place on Tuesday 26 September 2023.

The webinar is presented by Leigh Maingard, CEO of Intersect Sectional Title Services. Training is free and exclusive to Intersect clients.

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Understanding the 10-year maintenance plan

Amendments to the sectional title legislation in 2016 require all sectional title schemes to prepare an annual maintenance plan that makes provision for future maintenance over a 10-year period. These maintenance items must be of a capital nature, unlike the general daily or monthly maintenance items a scheme must budget for in its administrative budget.

In this training session, we unpacked the basic requirements of the 10-year plan to understand how it must be prepared and how the levies contributions towards it are calculated.

We invited Bjorn Laubscher of Mirfin Valuation Services, a specialist company providing valuations and maintenance plans to sectional title schemes, who shared his insights and knowledge on the 10-year plan and the correct way to calculate related levies, as well as the pitfalls when schemes do not use a specialist to prepare their plans.    

This training session took place on Monday 28 August 2023.

The webinar was presented by Leigh Maingard, CEO of Intersect Sectional Title Services.

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Exclusive use areas: What you need to know

The concept of exclusive use areas in sectional title schemes can be confusing especially when these areas are not always easily identifiable. Ownership and maintenance of exclusive use areas are topics of frequent dispute between owners and the body corporate.

In this training session, we considered how exclusive use areas are allocated to scheme owners, and who is responsible for their upkeep and maintenance. What happens when an owner sells their unit with an attached exclusive use area and how must this be treated in the transfer of the unit?

This training session took place on Monday 24 July 2023 and was presented by Leigh Maingard, CEO of Intersect Sectional Title Services.

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Insurance basics for sectional title schemes

A body corporate – via its trustees - is responsible to ensure that their scheme is sufficiently insured against possible risks. Regular valuations of the scheme (every three years) are vital to establish the correct replacement values of the sections and common property making up the scheme. With updated information from its most recent valuation, the body corporate can make an informed decision at the AGM on whether the scheme is covered sufficiently.

In this training session, we considered the importance of insurance to protect the scheme against unforeseen events and everyday risks. We had an insurance expert on hand to answer some important questions about insurance cover and to explain how insurance companies insure sectional title schemes.

This training session took place on Monday 26 June 2023.

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To receive notifications of future training dates, you can sign up here.

Financial insights for sectional title owners

For our May webinar, we focused on the financial aspects of managing a scheme, including reading financial statements and preparing an administrative budget.

Trustees found this session very empowering. It included valuable insights into the financial management of a sectional title scheme:

• Reading and understanding annual financial statements

• Special levies: What is it, and how is it imposed on scheme members?

• How a reserve fund is calculated

• Maintenance plans: Why it is essential and how it impacts levies

• Why regular valuations are necessary for a body corporate

• How to prepare an administrative budget

• How to calculate a levy and why you should know this

Training is free and exclusive to Intersect clients, and was conducted by Leigh Maingard, CEO of Intersect Sectional Title Services.

WATCH THE RECORDING BELOW

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What you need to know about the different sectional title meetings

Meetings are critical to sectional title schemes as they facilitate decision-making and direct trustees in the scheme's management.

Trustee meetings, annual general meetings and special general meetings leave a record for current and future trustees and owners of the management decisions based on the scheme's unique requirements and the relevant Acts.

In this training session, we looked at the fundamentals of different types of meetings and how these meetings should be conducted.

The webinar was presented by Leigh Maingard, CEO of Intersect Sectional Title Services, on Monday 24 April 2023.

 To receive notifications of future training dates, you can sign up here.

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CSOS, Reserve Funds and Fidelity Insurance

The Community Schemes Ombud Service (CSOS) plays a pivotal and strategic role in the mediation of disputes in community schemes. In this training session, we reviewed the types of disputes that can be lodged with CSOS for mediation and how to lodge it correctly.

In addition, we looked at how to calculate and budget for reserve funds, and how fidelity insurance cover is calculated.

The webinar was presented by Leigh Maingard, CEO of Intersect Sectional Title Services, on Tuesday 28 March 2023.

 To receive notifications of future training dates, you can sign up here.

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The role and responsibilities of trustees

When an owner takes on the role of a trustee, they have a fiduciary duty to act in the best interest of the body corporate. They also have responsibilities with regards to the maintenance and financial management of the scheme. What does that involve and what are the limits to their authority?

In this training session, we reviewed the role and responsibilities of trustees to ensure compliant management of the scheme. Training was conducted by Leigh Maingard, CEO of Intersect Sectional Title Services.

To receive notifications of future training dates, you can sign up here.

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What you need to know about AGMs

This training session was presented on 23 January 2023 as the first monthly trustee training session for the year. To receive notifications of future training dates, you can sign up here.

Download the presentation here.

WHAT YOU NEED TO KNOW ABOUT AGMs:

AGM requirements for a body corporate including the following: When must it take place, who must attend, what notice period is required, how to deal with a quorum, proxies, and voting, and what you need to know about trustee nominations.

Understanding the fiduciary relationship of Trustees

All sectional title schemes are managed, controlled and administered by a body corporate, the members of which are all owners within the scheme, and the applicable functions and powers are performed and exercised, on a day to day basis, by the Trustees.

Trustees are elected at each annual general meeting by the members, and must operate within the provisions of the Sectional Titles Schemes Management Act. Trustees are also subject to any restrictions and or directions imposed at a general meeting of the owners as well as in the registered rules of the scheme.

The management rules, which regulate the management and administration of a scheme and which sets out the powers and responsibilities of the trustees, may be added to, amended or repealed by unanimous resolution of the members, but one critical element thereof is the fiduciary relationship with the body corporate that every trustee stands in, once appointed to hold office until the next annual general meeting.

This relationship demands that every trustee acts honestly, in good faith and may not exceed the powers granted by the sectional titles schemes management act, the rules and/or the owners at a general meeting, and must exercise these powers in the interests and for the benefit of the body corporate as a whole.

Moreover, a trustee must avoid any and all material conflicts between his or her own interests and those of the body corporate. In particular, a trustee may not derive any personal benefit from the body corporate or from any other person if such benefit is obtained in conflict with the interests of the body corporate.

Should any possible or suspected conflict exist, the trustee is obliged to notify all other trustees of the nature and extent thereof.

If a trustee breaches his or her fiduciary duties by an act or omission that is grossly negligent or performed in bad faith, he or she may be liable to the body corporate for any resultant loss suffered by the body corporate or any economic benefit derived by the trustee.

The sectional titles schemes management act, however, does provide indemnity, for trustees, for acts or omissions that result in a loss for which the body corporate becomes lawfully liable, where gross negligence or bad faith is not proven. Moreover, and on a similar basis, the insurance policy of the body corporate should hold cover for trustees’ indemnity as well.

Property Practitioners Act

On 1 February 2022, the Estate Agency Affairs Act, was replaced by the Property Practitioners Act (PPA) and its regulations. At the same time, the Estate Agency Affairs Board (EAAB) will equally be replaced by the Property Practitioners Regulatory Authority (PPRA).

In essence, from a managing agent’s perspective, this doesn’t represent much in the way of changes from an operational point of view, however, there are a few changes that managing agents, and client’s alike, should be aware of.

The first is that the 2022 Fidelity fund Certificates (FFC), issued by the EAAB, will remain in force for the 2022 calendar year. However, all property practitioners must register with the PPRA on or before 31 October 2022, to prepare for the 2023 fidelity fund certificates to be issued.

In order to obtain the new FFC’s, which will be valid for 3 years, as opposed to the hitherto 1 year, the property practitioner must provide a letter of good standing from SARS, as well as a current BBBEE certificate.

Compliance with the prescribed educational requirements, code of conduct, accounting, auditing and record keeping remain much the same as before.

The property practitioner will cause to have conducted, within 6 months of its financial year-end, including the audit of all trust accounts operated by the property practitioner, an audit of its accounts for submission to the PPRA.

Intersect launches revolutionary management package

Intersect, a Western Cape based property management services company of 50 years standing, has heeded the call from many enquiries for an essential services package, aimed at community schemes located in remote areas and or in schemes where the scheme executives manage all aspects of the scheme’s affairs, but simply require a solid partner to assist with administration and finance.

Due to the intelligent use of technology, Intersect has developed a revolutionary administration model for community schemes, regardless of size, nature and even location.

“Our online system provides for clients to log in, obtain information and review management reports, including budgets, cash books, debtors and creditors analyses and bank account balances and statements.” says Martin Bester, Managing Director of Intersect.

Bester continues, “It further provides for the scheme executives to approve payments online. As a result, we are offering to those schemes in remote or hitherto un-serviced areas, a cost-effective online solution.”

Now, it must be noted that this offering does not include attendance at meetings, dealings with complaints, disputes and or queries (other than queries around the services provided), or any involvement in insurance claims, maintenance, compliance and or human resources, but it does provide the scheme executives with a feasible and viable alternative to the conventional managing agent’s service offering.

These services all form part of Intersect’s full management package.

For more information, please visit www.intersect.co.za or contact them on 021 659 5965 or at infoct@intersect.co.za