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Special Levy

By Nikki Bexzuidenhoudt on Wed, 06 Dec 2017 at 13:08

Hi All
In need of some advice. Im a newly elected trustee. We need to raise a special levy as out building is in such a bad state so we need to upgrade. However the building has not been maintained in that way in the past 18 years,The upgrade is going to cost over a million rand . We have 72 units + a few garages. The special levy to be raised per unit is roughly R19 000. Most owners are not in agreement of this levy as a few years ago the was a special raised for the same thing and managing agent ran away with the money. Each unit paid R14 000. And nothing came of this. We are in a catch 22 situation because if we dnt improve our building the people who are funding our building have stated they may need to rethink finding the complex. My question can we somehow try to get some of money from that managing agent even though its been years. As that is roughly R800 000 which would lessen the levy that most people cannot afford.

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RE: Special Levy

Anne Greening replied on Thu, 07 Dec 2017 at 15:58

Hi, Nikki, I should imagine that, if not efforts have been made to recover the funds, you are now too late. Did previous trustees make no effort to get the money back?
As such a large sum of money is involved, it might be worth you while getting your Attorney's advice on the likelihood of success.
Another way to raise the money would be to take out a loan. This would of course involve the payment of interest, but at least the repayment would be spread out over a few years.
Your trustees might also consider spreading the work required over a few years - budgeting for the most pressing items first.
From the sound of your message, I assume that your complex has no funds in your Reserve Fund?

RE: RE: Special Levy

Nikki Bexzuidenhoudt replied on Fri, 08 Dec 2017 at 09:02

HI Anne
Nobody tried to recover the funds and now that a huge special levy is being raised again for the same thing now everyone is up in arms. We do not have much in the reserve fund as we are still paying arrears from a previous managing agent from last year who do not pay bills at complex so we having to pay additional cost on all the arrears. Another issue that was also not tackled by previous trustees as the managing agent got paid a fee but never made payments on the bills for a whole year and now the complex is in arrears.

Regards
Nikki

RE: RE: RE: Special Levy

Anne Greening replied on Fri, 08 Dec 2017 at 14:00

Hi, Nikki, you seem to have a dire situation! What action (if any) was taken against the MA?
Are all the owners aware of the mismanagement which has been going on?
The reason for my questions is that - if it has not yet been done - I would suggest it is advisable to report the full extent of the problems to the owners, together with an estimate of what needs to be spent to put things right.
Should the owners object to paying large amounts towards a special levy (after whatever funds are available are exhausted), the alternative would be to apply for the appointment of an Administrator (see Section 16 of the STSM Act). The BC would then lose control of the management of the scheme, and owners would be required to pay such special levies as the Administrator deems necessary. This course would obviously be a last resort, if the BC is unable to manage the situation.

RE: Special Levy

andrew church replied on Sat, 09 Dec 2017 at 10:37

Nikki...Im a newly elected trustee
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A few years ago there was a special (levy) raised for the same thing and managing agent ran away with the money
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Nobody tried to recover the funds
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From the information you have given, it seems it might still be possible to recover the funds ? As you indicate that this only happened a (few years ago)? If as you say,(Nobody tried to recover the funds)you now have the power to quickly examine what happened. As you are now the (newly elected trustee) ?
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A super fast method would be to call for the minutes and establish who the AUDITOR was at the time. Then phone the Auditor and establish, was it true that that (Nobody tried to recover the funds) ? If you are lucky the Auditor might be able to shed some light on any INSURANCE policy or fidelity fund certificate that might have been in place at the time ? (See further info below on how to protect the Body Corporate)
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What can trustees do to ensure their interests are protected?
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Confirm with the EAAB that your managing agent has a current fidelity fund certificate, which will provide insurance to the body corporate in the event of loss of scheme funds held in a trust account. Confirm with the managing agent’s insurer that they have professional indemnity cover ?
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RE: Special Levy

andrew church replied on Mon, 11 Dec 2017 at 18:46

In a recent newspaper article. Disappointment was expressed at the lack of auditor rotation because that issue had been raised several times ?
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Members present at any A.G.M could now consider changing the auditor from time to time. So as to not allow an increase in risk as we are now reading in the newspaper ? This can be done by appointing the Auditor for the year, as seen on the A.G.M AGENDA ?

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